Tilson aims to sell its business at a bankruptcy fire sale auction, leaving creditors on the hook

RUG PULLED, TRUST SHATTERED — As Tilson Technology Management accelerates its bankruptcy-driven asset sale, contractors and suppliers are left reeling. The company’s motion to sell substantially all of its assets under Section 363 of the Bankruptcy Code could strip vendors of payment while transferring valuable contracts and equipment to a new buyer, leaving behind the very businesses that helped build Tilson’s growth. Review the full list of creditors below.

Tilson Technology Management, once confident in its ability to emerge stronger from its recent financial struggles, has made a dramatic shift in course. After announcing a restructuring bankruptcy plan just weeks ago, the company has now decided to sell all of its assets, marking a stark contrast to the optimistic outlook shared in its May 29, 2025, announcement that the company was taking steps to “position the company for long-term success.”

The abrupt cancellation of a major client’s contracts, which caused significant disruption to Tilson’s revenue stream, ultimately led to this unexpected decision. Tilson’s planned Chapter 11 bankruptcy restructuring, once seen as a path to recovery, has now given way to the liquidation of its assets, signaling the end of the company’s ambitious vision for its future. In its filing, Tilson stated that it owed between $100 million and $500 million to creditors.

In a motion filed in the U.S. Bankruptcy Court for the District of Delaware, Tilson and affiliated debtors Boundless Broadband, LLC and Tilson Middle Street Holding, LLC requested court approval to sell substantially all of their assets. The proposed sale would be conducted under Section 363 of the Bankruptcy Code, allowing assets to be transferred “free and clear” of existing liens, claims, and other encumbrances. The buyer would acquire and run the business free from any complications associated with the bankruptcy or the seller’s pre-bankruptcy operations.

An aggressive timeline with few protections for creditors

Tilson’s proposal includes a fast-tracked sale process, with a court hearing scheduled for July 24 and a bid deadline of September 5. If approved, an auction will be held on September 11, and the winning bid could be closed by the end of that month.

To jumpstart interest, the company is seeking permission to name a stalking horse bidder and offer customary bid protections, including a breakup fee of up to 3% of the purchase price and $100,000 in expense reimbursements. Tilson will set a minimum price for other potential  buyers, which acts as a floor, encouraging other buyers to bid higher and ensuring Tilson receives a fair market price for its assets. 

But the plan offers little comfort to the long list of creditors below who helped build Tilson’s now-unstable foundation. If the court signs off, the successful buyer could walk away with key contracts, equipment, and customer relationships. At the same time, Tilson’s unsecured debts and vendor obligations are left behind in the bankruptcy estate.

A collapse sparked by Gigapower’s exit

Tilson filed for Chapter 11 on May 29 after a string of setbacks, most notably the abrupt termination of contracts by AT&T-backed Gigapower, LLC. According to court filings, the loss of that business triggered a liquidity crisis that left the Portland, Maine-based company unable to cover payroll or continue normal operations.

The company has since obtained debtor-in-possession financing to support its operations during the restructuring, but this funding is contingent upon meeting specific milestones, including the expedited sale of assets.

Contractors left in the cold

For many of Tilson’s vendors and subcontractors, the proposed sale offers a bleak outlook.

“This is a playbook we’ve seen before,” said one industry creditor. “Sell the company’s value, shed the debt, and leave those who actually built the business holding an empty bag.”

If approved, Tilson’s auction would finalize yet another example of how the bankruptcy code can be used to sever liabilities from value — even in an industry that depends on labor-intensive deployments and contractor trust.

Tilson’s motion requests court approval of its sale procedures at the July 24 hearing. Objections must be filed by July 17.

Tilson opposes fleet vendor’s push for emergency hearing

Tilson objected to a motion by Automotive Rentals, Inc. (ARI) seeking an expedited court hearing to force the company to either assume or reject its vehicle lease agreement or begin making assurance payments.

Tilson argues that there is no actual emergency; the 60-day lease grace period under bankruptcy law still applies, and the company is financially capable of meeting its current obligations under its DIP financing. The debtors argue that granting ARI’s request would unnecessarily divert attention from their broader restructuring efforts and request that the matter be heard on regular notice in July.

Will there be a white knight?

Tilson has engaged Woodward Park Partners LLC to facilitate the sale process, aiming to attract interest from private equity groups familiar with Tilson’s operations.

Potential buyers might find value in Tilson’s existing contracts, which could provide immediate revenue streams and operational continuity. However, the company’s asset base is primarily service-oriented, with limited tangible assets, such as mostly leased vehicles, which may not significantly enhance the appeal to infrastructure contractors.

Tilson, founded in 1996, employs about 600 people nationwide. It stated that it plans to pay vendors in full for post-filing work and has filed motions to ensure that employee pay continues uninterrupted.

However, it is questionable whether venture capital funding will become available. Notably, SDC Capital Partners, LLC invested up to $100 million in Tilson in 2019 to support its expansion in network infrastructure services and the capitalization of its asset-ownership affiliate, SQF, LLC.

Additionally, VC firm Rand Capital Corporation invested in the company which constituted a notable portion of its net assets and total investments, and according to court filings, Joshua Broder, former CEO of Tilson and now head of Tilson Infrastructure, personally loaned the company $10 million earlier this year to cover financing gaps caused by delayed payments from Gigapower. However, this financial infusion was ultimately inadequate as contract terminations mounted.

As a potential auction bidder for Tilson, MasTec Network Solutions could find value in acquiring Tilson’s existing contracts and workforce, particularly if Tilson’s client relationships, such as those with major telecom providers, are intact. Much like its strategic acquisition of Nexius’s construction subsidiary, Velex, which included a trained workforce and key client relationships, MasTec could leverage Tilson’s contracts and operational assets to expand its network deployment capabilities and service offerings.

Given MasTec’s track record of securing favorable acquisitions in distressed situations, such a deal could provide a quick pathway to strengthen its infrastructure portfolio while maintaining continuity with key clients.

There’s no assurance of continued insurance

Tilson owed Liberty Mutual insurance $715,169 as an unsecured creditor in their bankruptcy, with the debt likely tied to workers’ compensation coverage for its employees.

Given the circumstances, it seems unlikely that Liberty Mutual, or any other insurance carrier, would be eager to continue providing coverage for a company in such a fragile financial state, even though Tilson issued positive press releases about their restructuring efforts.

Insurance companies are generally cautious, and with Tilson’s uncertain future, there’s a strong possibility that coverage will be canceled, or they will face significant premium increases. This creates an additional challenge for any potential buyer, as acquiring Tilson’s assets could come with the headache of finding a new insurer, potentially at much higher rates or with more restrictive terms, unless the company acquiring Tilson’s assets was already a self-performing contractor with insurance in place.

Legal counsel for Tilson includes Saul Ewing, LLP, and Bernstein, Shur, Sawyer & Nelson, P.A.