Auto financing firm Vroom (NASDAQ:VRM) filed for Chapter 11 bankruptcy protection on Wednesday in a Texas court as the cash-strapped company attempts to restructure more than $300M in debt.
The bankruptcy comes in the wake of Vroom’s (VRM) agreement with creditors to enter a Restructuring Support Agreement that would convert $290M of unsecured convertible senior notes into equity. The RSA will allow existing holders of Vroom (VRM) common stock to exchange each share for one share of new common stock and warrant to purchase a share of new common stock. The warrants will be exercisable for five years at a strike price of $12.19 per share.
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