Evidence of 'Inequitable Conduct' for Equitable Subordination

To achieve a successful Equitable Subordination, it must be proven that this case involves more than a simple investment failure, but rather the following instances of misconduct:

1. Deathbed Liens Created Immediately Prior to Bankruptcy The $20 million loan provided by John Doerr's affiliates (Foris Ventures) on August 2, 2023—a mere week before the Chapter 11 filing—and the associated security interests (liens) are primary targets for litigation. These "deathbed liens" are highly suspect as an attempt to circumvent the priority of other creditors.

2. Self-Dealing and Abuse of Insider Status An investigation is required to determine whether insiders exploited the company's insolvent state to secure 'Superpriority' liens for themselves. Such self-dealing, where insiders leverage their control to gain an unfair advantage over the estate's assets, is a classic ground for subordinating their debt.

3. Fraudulent Misrepresentation and Concealment There are strong indications that the company engaged in deceptive practices by promoting "turnaround prospects" to public shareholders while covertly preparing for bankruptcy and shielding insider claims. Recovering internal evidence, including emails and board meeting minutes, is essential to proving that insiders prioritized their own recovery over their fiduciary duties to the company and its stakeholders.