Days after a last-ditch proposal was made to save the company from liquidation, SmileDirectClub has shuttered its operations worldwide, immediately ceasing any future sale of its clear aligners and ending its lifetime guarantee, according to the business’s website.
The telehealth orthodontics company, which filed for bankruptcy in September and started a search for a new buyer, canceled outstanding orders for clear aligners and closed its customer support for existing customers, effective December 8. Also, anyone wanting a refund will need to wait for more information, according to its Customer FAQ (frequently asked question) page.
“There will be more information to come once the bankruptcy process determines next steps and additional measures customers can take,” according to the website.
Additionally, existing clear aligner patients needing 60-day treatment check-ins will need to make arrangements with their treating or local dentists, since SmileDirectClub’s platform no longer exists. Furthermore, anyone with clear aligners who signed up for its monthly payment plan, SmilePay, must continue paying until the account is paid in full. Those with questions should contact HFD at 1-877-874-3877 or [email protected], according to the site.
After no new buyers came forward to rescue the company, SmileDirectClub founders Jordan Katzman and Alex Fenkell in early December offered to infuse new cash into the business and take it over, to save it from liquidation.
The pair proposed offering $30 million of debt to SmileDirectClub, as well as adding $25 million of new equity into the company, in exchange for the founders receiving 100% of the reorganized firm. This $30 million would be in addition to the $20 million that the founders lent to pay for the company to search for a new buyer.
For this deal to proceed, SmileDirectClub needed to get its other lenders and creditors to agree to it. When SmileDirectClub filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas on September 29, SmileDirectClub had almost $900 million in debt.
On October 4, SmileDirectClub was delisted from the Nasdaq Stock Market, and the trading of its common stock was suspended. The stock exchange delisted the company under Nasdaq rules, its use of discretionary authority, and SmileDirectClub's bankruptcy and liquidation.
SmileDirectClub’s money problems came nearly four years after it raised more than $1 billion in its initial public offering and months after facing some legal hits.
In August, a California court confirmed an order requiring the orthodontics company to pay $63 million to Align Technology, a former partner and the maker of Invisalign, over a supply agreement dispute. The Nashville, TN-based company had planned to appeal the decision. In June, it settled a suit with the Washington DC, attorney general’s office, which claimed the company made injured and dissatisfied customers sign nondisclosure agreements (NDAs) to receive refunds for their clear aligner therapy.
Under the terms of the settlement, SmileDirectClub was required to release 17,000 U.S. consumers from provisions in its NDAs. Also, the company had to change its refund policy, notify consumers who previously signed NDAs that they could now freely speak about their experiences, and stop forcing people to sign NDAs that prevented sharing information before refunds were provided.
At the time of its closing, SmileDirectClub was operating a number retail shops in more than a half-dozen locations, including the U.S., Canada, Australia, Ireland, Germany, Singapore, and the U.K.
