FOLLOW US

Edgio Inc., a digital content delivery platform formerly known as Limelight Networks, filed for Chapter 11 bankruptcy protection on Monday, listing $379 million in assets and $369 million in liabilities. The company plans to sell its assets to its primary lender, Lynrock Lake Master Fund LP, through a stalking horse agreement.

Lynrock's Stalking Horse Bid and Debt Acquisition

Lynrock Lake agreed to acquire Edgio’s assets via a $110 million credit bid, which will cancel Edgio's $94.4 million secured debt held by Lynrock in exchange for ownership of the company. The deal includes Edgio’s applications and security suite, which offers AI-driven protection for websites, and its Uplynk streaming platform, which serves major media, sports, and cable clients.

Edgio Filed for Chapter 11 : Compliance Challenges and Financial Struggles

Edgio has faced significant compliance issues since 2022, hampering its ability to realize its business potential. CEO Todd Hinders noted that liability management exercises beginning in early 2023 exacerbated the company's struggles. Edgio’s current form resulted from a 2022 merger between Limelight Networks and Edgecast, but the combination failed to meet expectations.

Further complications arose in March 2023 when Edgio announced a restatement of three years of financial reporting due to accounting errors, reducing revenues for 2020, 2021, and 2022 by $6.2 million, $16.5 million, and $23.7 million, respectively. The financial restatement and delayed 2023 reporting triggered loan defaults with Lynrock Lake, contributing to the bankruptcy filing.

Creditors and Debtor-In-Possession Financing

Edgio has approximately 5,000 creditors, with Amazon Web Services being the largest unsecured creditor, holding $8.7 million in claims. Other major creditors include Verizon Sourcing LLC ($5.8 million) and Comcast Media Center. The company has secured $15.6 million in debtor-in-possession financing from Lynrock to support its operations during bankruptcy, pending court approval.

Edgio Filed for Chapter 11 : Future Prospects

The bankruptcy case is assigned to U.S. Bankruptcy Judge John T. Dorsey, and Edgio is represented by Russell C. Silberglied of Richards Layton & Finger PA. With over 800 employees and operations in more than 60 countries, Edgio aims to restructure and streamline its business under new ownership, potentially securing its future in the competitive digital content market.