IronNet just filed for Chapter 11 bankruptcy

Despite ceasing operations last month, McLean, Virginia cyber company IronNet isn’t quite done yet.

The company recently announced plans to file for Chapter 11 bankruptcy, allowing it to restructure and continue operations in the hope of emerging out of bankruptcy. Around the time the company closed operations, a Securities and Exchange Commission (SEC) filing from Sept. 29 said IronNet would likely have to file for Chapter 7 bankruptcy, which would have liquidated the company.

According to a press release, on Oct. 10, IronNet inked a binding term sheet with ITC Global Advisors for a $10 million debtor-in-possession (DIP) financing facility. In the following days, the company filed motions for relief that would allow it to continue course operations throughout the restructuring, which were approved Oct. 13. The court also authorized an interim reinstatement agreement with Amazon Web Services so IronNet could reactivate its cloud computing tools.

“Against a backdrop of intense restructuring in an uncertain capital raising environment, we remain intent on stabilizing IronNet and serving our customers,” IronNet CEO Linda Zelcher said in the announcement. “With the DIP financing provided by ITC, we believe we are better positioned to act in the interests of our stakeholders through the Restructuring.”

IronNet did not respond to a request for comment on the filing.

Signs of significant trouble first emerged earlier in September, when IronNet curtailed operations and furloughed almost all of its employees, eyeing bankruptcy. A few weeks later, it officially ceased operations and terminated the remaining employees of the company and its subsidiaries.

But IronNet’s issues go even further back. In 2021, it went public via a SPAC merger with LGL Systems; it’s since been delisted. A suit filed against the company in 2022 claimed IronNet’s then-CEO Keith Alexander misled investors and falsified claims around government contracts and revenue dollars.

The company laid off approximately 35% of staff in September of last year after reporting huge losses and missing quarterly report filings, as well. In July 2023, Linda Zecher took over as CEO, although Alexander remained chair of the board.