WILMINGTON — iRobot Corp., the Massachusetts-based maker of consumer robots, filed for Chapter 11 bankruptcy protection after reaching a restructuring support agreement that will hand control of the company to Shenzhen PICEA Robotics Co. and Santrum Hong Kong Co.
Under the plan, Shenzhen PICEA — iRobot’s main supplier and lender — will receive the entire equity stake in the reorganized company. The company’s common stock will be wiped out. The restructuring will allow iRobot to continue operating as a going concern, meeting commitments to employees and making timely payments to vendors and other creditors, according to a company statement.
“Today’s announcement marks a pivotal milestone in securing iRobot’s long-term future,” Chief Executive Officer Gary Cohen said.
The company had warned of potential bankruptcy in December after years of declining earnings. Shenzhen PICEA acquired a major portion of iRobot’s debt from U.S. investor Carlyle Group Inc., and iRobot said it was seeking new capital to address its obligations.
Founded in 1990 by three MIT engineers, iRobot rose to prominence with its Roomba robotic vacuum and has sold more than 50 million robots, according to its website. Earnings began to decline in 2021 amid supply chain disruptions and growing competition in the consumer robotics market.