Nirvanix Inc., a San Diego-based cloud-based data storage company, won court approval to borrow about $1.1 million to help fund operations while in bankruptcy.
U.S. Bankruptcy Judge Brendan Linehan Shannon approved the company request at an Oct. 4 hearing, according to court documents. The judge will consider giving final approval of the bankruptcy loan at an Oct. 23 hearing.
The financing is necessary to "continue in business long enough to capitalize on the prior indications of interest received from strategic buyers with the goal of selling its assets," under a court approved auction process, Nirvanix said in court papers. The loan will also provide the company additional time to assist its customers in either returning their data or alternative cloud-storage providers.
"Nirvanix voluntarily sought Chapter 11 bankruptcy protection in order to pursue all alternatives to maximize value for its creditors while continuing its efforts to provide the best possible transition for customers," the company said in a message on its website.
It said it would assist customers in either returning their data or transferring it to similar platforms offered by International Business Machines Corp., Google Inc., Microsoft Corp. and Amazon.com Inc.
The company listed between $10 million and $50 million each in both assets and debt, according to Chapter 11 documents filed Oct. 1 in Wilmington, Del.
The company, calling itself "the leader in enterprise cloud storage" offers cloud storage solutions designed specifically for customers with security, reliability and redundancy requirements, according to company statements. Storage products are custom built for the largest media and entertainment companies, financial institutions and technology companies, according to the company.
Khosla Ventures IV LP, a venture capital firm focused on technology, owns more than 70 percent of both the Series 1 preferred stock and the junior preferred stock as well as 15.5 percent of the common stock, court papers show. A venture capital unit of Intel Corp. owns more than 20 percent of the common equity, and 17 percent of the Series 1 preferred and about 22 percent of the junior preferred. Valhalla Partners II LP owns about 25 percent of the common stock and Mission Ventures III LP owns about 24 percent.
The case is In re Nirvanix Inc., 13-bk-12595, U.S. Bankruptcy Court, District of Delaware (Wilmington).