Sonder Holdings Inc., which operates a global brand of premium apartments and boutique hotels, announced that it will complete winding down operations immediately and expects to initiate a Chapter 7 liquidation of its US business. The company also intends to initiate insolvency proceedings in the international countries in which it operates.
Sonder has faced severe financial constraints arising from, among other things, prolonged challenges in the integration of the company’s systems and booking arrangements with Marriott International. On Sunday, Marriott announced that it terminated its licensing agreement with Sonder, deeming it no longer in effect.
According to a statement, Sonder made comprehensive efforts to evaluate all financing and other strategic alternatives, including a sale of its business and operations, to improve its financial condition. As part of those efforts, the company engaged numerous strategic and financial parties but ultimately was unable to execute a viable going concern transaction for its business and operations or obtain additional liquidity.
Janice Sears, interim CEO, said of Sonder. “We are devastated to reach a point where a liquidation is the only viable path forward.” Unfortunately, she said, “our integration with Marriott International was substantially delayed due to unexpected challenges in aligning our technology frameworks, resulting in significant, unanticipated integration costs, as well as a sharp decline in revenue arising from Sonder’s participation in Marriott’s Bonvoy reservation system.”
These issues, said Sears, “persisted and contributed to a substantial and material loss in working capital.” The company, she said, “explored all viable alternatives to avoid this outcome, but we are left with no choice other than to proceed with an immediate wind-down of our operations and liquidation of our assets.”
Additional information regarding the court proceedings and wind-down, including the status of the company’s operations outside the U.S., will be made available by the Chapter 7 Trustee or the company’s international subsidiaries in due course.
