SiFi Networks America - Chapter 11 Case Summary

Business Description

SiFi Networks America, LLC (the "Debtor" or the "Company") is a specialized telecommunications infrastructure project management and deployment services provider. The Debtor is the U.S.-based subsidiary of SiFi Networks America Ltd. ("SNA Ltd." or the "Parent," and together with its affiliates and the Debtor, "SiFi"), a United Kingdom private limited company.

• The Debtor originates contracts with municipalities and local governments, which it operationally executes through its U.S.-based employees.

Established in 2013, SiFi is an open-access developer, operator, and wholesaler of fiber-to-the-premises ("FTTP") networks in California and the Midwest region of the United States. Under its FiberCity® brand, SiFi constructs citywide open-access networks (the "Networks") through long-term access agreements to municipal public rights-of-way, covering the private finance, construction, operation, and maintenance of the Networks.

• The Networks are leased to internet service providers, offering an expedited route to mass-market expansion without the associated capital cost of entry.
• The Networks are constructed in urban and suburban communities of approximately 20,000 to 75,000 homes that generally lack comparable high-speed service offerings and are typically served by a single telephone company and cable company.

Institutional Funding Model

SiFi has secured substantial funding from institutional investors to finance delivery of the Networks, with approximately $1 billion committed to date — primarily through Future Fiber Networks LLC and the Smart City Infrastructure Fund ("SCIF"), which is controlled by Europe's largest pension fund, APG.

• The investments are funded through non-recourse, special purpose vehicles, or "City LLCs" (the "Project Companies"), which are owned by the investors themselves.
• The Debtor secures contracts and prepares analysis for presentation to the investors for approval; if approved, the investor forms the Project Company and provides the equity required to build a Network.

The Debtor generates approximately $10 million in annualized revenue, primarily through management fees earned for developing and managing the Networks. As of the filing, the Debtor employed a skilled workforce of approximately 33 individuals.

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Corporate History

SiFi was established in 2013 by Roland Pickstock and Mike Harris as an open-access developer, operator, and wholesaler of FTTP networks. SiFi previously developed projects in East Hartford, Conn., and Saratoga Springs, N.Y., both of which were abandoned, while a project in Rancho Cordova, Calif., is currently suspended.

• In April 2026, SNA Ltd. was acquired by PATRIZIA, a German infrastructure investment manager, and APG/SCIF.

Corporate Structure

The Debtor is a Delaware limited liability company and a wholly owned subsidiary of SNA Ltd., which holds all of the Debtor's equity.

• The Debtor is manager-managed, with Michael Wyse of Wyse Advisors, LLC serving as the current independent manager.
• Ian Wade serves as the Debtor's chief executive officer, and Jacen Dinoff serves as chief restructuring officer.

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Operations Overview

The Debtor primarily supports fiber network deployment initiatives within SiFi's business, providing network deployment planning, permitting process tracking, jurisdictional coordination, vendor and subcontractor management, construction management, program management, delivery coordination, stakeholder reporting, and compliance support. Through this work, the Debtor has developed substantial expertise in managing complex, multi-phase telecommunications infrastructure development projects.

Network Portfolio

The Debtor, in conjunction with its Parent, provides project management services for nine Networks:

• Complete (2): Placentia, CA, and Kenosha, WI
• Operational but still under construction (5): Farmington, MI; Rockford, IL; Simi Valley, CA; Oceanside, CA; and Palmdale, CA
• Under construction (1): Fullerton, CA
• Due to become operational shortly (1): Escondido, CA

Revenue Model

The Debtor's approximately $10 million in annualized revenue is derived primarily from management fees, which are fixed — with some variability based on targets — and paid monthly by the Project Companies based on the size of the applicable project.

• Due to increased resources and complexity, management fees are higher during construction than during operations.
• The Debtor also has the potential to earn development fees, subject to meeting key milestones, paid at a rate of 2% of CapEx.

Workforce

The Debtor employs approximately 33 individuals, consisting of project managers, coordinators, and operational leadership personnel.

• These employees have expertise in network pre-construction management, fiber deployment project management, construction management, project coordination, and operational leadership.

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Prepetition Obligations

The Debtor's prepetition capital structure consists of a single secured term loan and approximately $26.4 million in unsecured obligations, summarized below:

Prepetition Term Loan

• On May 6, 2026, ArcLink Fiber LLC, an affiliate of PATRIZIA, extended a $2.2 million loan to the Debtor under a Secured Promissory Term Note.
  • Interest accrues at 13% per annum, increasing by 5% upon the occurrence and during the continuance of an event of default.
  • The note is secured by a first-priority lien on substantially all of the Debtor's assets and matures on Aug. 6, 2026.
  • Prior to obtaining the loan, the Debtor's working capital was funded entirely by SNA Ltd.

Unsecured Debt

• As of April 30, 2026, the Debtor carried approximately $26.4 million in unsecured debt, consisting of accounts payable, accrued liabilities, and other liabilities.

Cash Position

• As of the Petition Date, the Debtor held approximately $206,000 in cash and cash equivalents, excluding professional retainers paid to assist in preparing and prosecuting the Chapter 11 case.

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Events Leading to Bankruptcy

Prepetition Litigation

• In the years preceding the filing, the Debtor became entangled in several significant litigation matters that strained its finances and resources:
  • Generate Litigation: In December 2023, Generate Saratoga Springs Fiber Member, LLC and Generate East Hartford Fiber Member, LLC filed a complaint in the Delaware Chancery Court against the Debtor, SNA Ltd., and certain affiliates, seeking, among other things, specific performance under agreements relating to fiber optic networks in Saratoga Springs, New York, and East Hartford, Connecticut. The dispute was later moved to arbitration before the American Arbitration Association/International Centre for Dispute Resolution.
    • The Arbitration Panel issued a Partial Final Award on January 22, 2026, and a Second Partial Final Award on May 1, 2026, finding the Debtor jointly and severally liable to Generate for approximately $16.3 million, plus approximately $1.2 million in attorneys’ fees. On April 27, 2026, the defendants filed a motion for summary judgment in the Delaware Chancery Court seeking to vacate the Partial Final Award.
  • Berkshire Litigation: The Debtor is a third-party defendant in a lawsuit filed by Berkshire Hathaway Specialty Insurance Company in the U.S. District Court for the Central District of California, alleging breach of a 2018 National Multi-City Agreement between Corbel Communications Industries LLC and the Debtor, which granted Corbel a right of first refusal on certain microtrenching projects. A jury trial is set to commence on August 25, 2026.
  • Neda Litigation: On January 21, 2025, Peter Neda, the Debtor’s former general counsel, sued the Debtor and SNA Ltd. in California Superior Court alleging, among other things, breach of contract. The parties are currently engaged in discovery.
  • Lightpath Litigation: On May 6, 2026, Cablevision Lightpath LLC filed a breach-of-contract complaint against the Debtor in the Delaware Superior Court; upon information and belief, the Debtor has not yet been served.

Loss of Parent Funding and Liquidity Pressures

• Despite a business model the Debtor views as carrying enormous monetary potential—evidenced by the confidence of its investors and contract counterparties—a series of financial and operational difficulties placed the Company’s continued existence at risk. These challenges stemmed from:
  • SNA Ltd. discontinuing funding to the Debtor, taking steps to sell substantially all of its own assets, and commencing its own insolvency proceeding in the United Kingdom (the “UK Proceeding”);
  • Adverse litigation results combined with an inability to continue paying professional advisors; and
  • Vendors and servicers threatening to commence legal action and/or cease doing business with the Debtor.
• With SNA Ltd. no longer providing working capital and no third-party financing available, the Debtor obtained the Prepetition Loan on May 6, 2026. The underlying Note, however, matures in approximately two months, and the Debtor lacks sufficient liquidity to satisfy the obligations.

Mounting Litigation Exposure and Advisor Arrears

• As the Debtor’s cash position grew tenuous, the Company learned that the Arbitration Panel might issue a final award in the Generate Litigation, potentially exposing the Debtor, on a joint and several basis, to an ultimate judgment of approximately $17.5 million that it has no ability to satisfy.
  • The Debtor also faces upcoming deadlines in the Berkshire Litigation without the financial wherewithal to fund its defense in that matter or its other pending litigation. The law firm handling the Generate Litigation is owed hundreds of thousands of dollars, while counsel in the Berkshire and Neda Litigations is owed tens of thousands of dollars.

Governance Changes and Restructuring Preparations

• Concluding that a restructuring of the Debtor’s business was inevitable, SNA Ltd. appointed Mr. Wyse as the Debtor’s sole Manager on April 22, 2026, charged with assessing the Company’s financial position and developing a comprehensive restructuring plan.
  • Mr. Wyse moved swiftly to understand the business and chart a course of action, and the Debtor retained Cole Schotz P.C. as legal counsel, KCP as financial advisor, and Sherwood Partners, Inc. as sales agent to assist with its restructuring strategy and contingency planning.

Coordination With the UK Proceeding

• The Debtor closely coordinated the timing of its Chapter 11 filing with the commencement of SNA Ltd.’s UK Proceeding:
  • To ensure ordinary-course operations could continue notwithstanding the parallel insolvency proceedings, the Debtor and SNA Ltd. entered into a detailed prepetition Master Services Agreement governing the ongoing provision of services to one another.
  • The parties’ professionals remained in constant communication so that the Chapter 11 Case would commence following SNA Ltd.’s filing of a notice of intention to appoint administrators—which occurred the night before the petition date—and the closing of SNA Ltd.’s asset sale, set to occur on the petition date.

Decision to File and Path Forward

• After carefully weighing all alternatives, the Manager made the difficult decision to file for Chapter 11 protection to preserve the Debtor’s assets and conduct a bankruptcy sale process aimed at maximizing value for creditors.
  • Early in the case, the Debtor intends to file a motion seeking approval of, among other things, sale and bidding procedures and a stalking horse asset purchase agreement with ArcLink or its designee.

Proposed Financing and Sale Process

To fund operations during the Chapter 11 case, the Debtor sought debtor-in-possession ("DIP") financing after a prepetition marketing process conducted by its sales agent revealed no third-party lenders willing to provide financing outside the Debtor's existing capital structure.

• The Debtor projects it will exhaust its own cash by the second week of the case (the week of June 14, 2026) and estimates it requires approximately $3.13 million in DIP financing to fund the case through a sale process and emergence from chapter 11.
• Following arm's-length negotiations, ArcLink agreed to serve as DIP Lender, providing a $3.13 million new-money loan together with a "roll-up" of the Debtor's outstanding indebtedness under the $2.2 million Prepetition Note, which ArcLink required as a condition of its commitment.
• The DIP facility is intended to provide working capital, fund first-day obligations and administrative costs, and give the Debtor the runway necessary to consummate a value-maximizing sale under section 363 of the Bankruptcy Code.