Another major internet company files for Chapter 11 bankruptcy

Major technology companies, facing financial distress, have been seeking bankruptcy protection in recent months.

Many of these companies are dealing with the same financial problems that retailers, restaurants, manufacturers, and service providers are suffering from, including rising costs of labor and products driven by inflation, increased interest rates on their debt, and consumers’ changing attitudes in paying for services.

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Most of these companies have blamed unsustainable debt obligations and industry headwinds as the primary reasons for their economic problems.

Related: Major internet company files for Chapter 11 bankruptcy

Debtors have also said that they filed for bankruptcy either after defaulting on their debt obligations or to prevent them from defaulting on their debt.

Struggling business internet provider Everstream Solutions LLC is one of the tech companies that filed for Chapter 11 bankruptcy protection, facing a potential default on over $1 billion in prepetition credit agreements.

The company, which filed its petition on May 28, is hoping to sell its assets in a bankruptcy auction.

Tech companies file for bankruptcy protection

In April, banking-as-a-service start-up, Solid, which at one time called itself the Amazon Web Services of fintech, filed for Chapter 11 protection in Delaware after failing to secure an additional round of funding.

Semiconductor supplier Wolfspeed has not yet filed for bankruptcy, but it is reportedly considering filing for bankruptcy, sources familiar with the matter told the Wall Street Journal on May 20.

The Durham, N.C., tech company is pursuing a prepackaged Chapter 11 plan in the coming weeks after out-of-court debt restructuring attempts failed.

And now, another major company that supports internet services is filing for bankruptcy.

Tilson Technology Management files for bankruptcy  

Tilson Technology Management, a national leader in the installation of fiber solutions and infrastructure for internet services, has filed for Chapter 11 bankruptcy protection, seeking a sale of its assets.

The Portland, Maine, debtor and two affiliates filed their petition on May 29 in the U.S. Bankruptcy Court for the District of Delaware, listing about $223 million in debt, according to a declaration by Chief Restructuring Officer Richard Arrowsmith.

Related: Huge trucking company files for Chapter 11 bankruptcy

Tilson, whose affiliate Boundless Broadband is listed as the lead debtor in the case, is seeking $37.5 million in debtor-in-possession financing with $15 million available on interim order approval.

“For nearly 20 years, Tilson has helped clients tackle their most difficult information and communications infrastructure challenges,” Tilson CEO Darrell Ingram said in a statement.

“Our core business is strong, but we need to reset after one client’s failure to manage its relationships with its host communities and pay us for the work we performed materially changed our revenue expectations,” Ingram said.

“The steps we are taking today represent a new beginning, not an end. We are fortunate that our lenders continue to believe in our business and support us financially, so we can overcome this setback and create a strong financial future for our company,” he said.

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Tilson Technology Management plans to file a bidding procedures motion for a sale of all of its assets by June 13, a stalking-horse bid motion by June 25, receive approval of its bidding procedures by Aug. 1, approve a sale order by Sept. 19, and close the sale by Sept. 26, according to the declaration

The debtor’s financial problems began after it in 2022 contracted with Gigapower, an entity owned by Blackrock and AT&T, to design and build its fiber networks in Las Vegas and in Gilbert and Chandler, Ariz.

Tilson Technology Management alleged in court papers that Gigapower failed to deliver on all of the terms it had negotiated to address cashflow risks, failed to devote sufficient resources to community communication and management of jurisdiction-imposed costs, and delayed, withheld and reduced payments without contractual basis.

The debtor alleged that a series of actions by Gigapower led to its bankruptcy filing, including withholding all payments to Tilson in March 2025 without a reasoned explanation.

Gigapower also withheld consent in March 2025 to resume construction in Las Vegas for a month before scheduling meetings with the city to resume construction; and terminated all construction in Gilbert not in progress and suspended engineering work on March 28, 2025.

It also terminated all remaining construction work in Las Vegas and Chandler on April 29, 2025.

Related: Troubled radio station company files for Chapter 15 bankruptcy

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