Casa Systems filed for Chapter 11 bankruptcy protection with plans to sell off its main business units, which includes a 5G core system used by Verizon to power that carrier’s private network offering. The bankruptcy filing also comes just months after Casa Systems’ management told SDxCentral it was making progress toward financial stability.

As part of its Chapter 11 filing, Casa Systems entered into an agreement to sell its 5G mobile core and radio access network (RAN) business to Lumine Group. That deal will include Casa System’s Axyom cloud-native 5G core software and RAN assets.

Financial terms of the sale to The Lumine Group were not released, with Casa Systems looking to close the deal by the end of the month.

The Lumine Group paints itself as “a global buy-and-hold forever acquirer of communications and media software businesses.” Late last year it struck a deal to buy Nokia’s Device Management and Service Management Platform businesses for $200 million. That deal included approximately 500 Nokia employees moving to Lumine.

Verizon has been using some of Casa Systems' 5G core components to power its private network offerings, which was part of a broader investment Verizon made into Casa Systems. That deal included Verizon purchasing a nearly 10% equity stake in Casa Systems for $140 million and signing a purchasing agreement valued at up to $140 million over the entire term.

Adam Koeppe, SVP for technology strategy and planning at Verizon, said at the time that the carrier was going to plow Casa System’s cloud-native 5G core platform into the carrier’s private network efforts. He explained that Verizon would use Casa Systems’ platform to deploy a 5G core or multi-access edge computing (MEC) system onto just about any infrastructure environment an enterprise customer might be running. This includes a customer’s private cloud or on-premises bare metal system.

“When we look at new functions that are coming onto our core network, our 5G core capabilities are all cloud native,” Koeppe told SDxCentral. “So it was really important for us to ensure that Casa provides us with the solutions that we’re working with them on are all cloud native so they fit right into our architecture very seamlessly, and the private network with MEC is a tremendous growth area.”

Casa Systems last September also struck a deal with regional wireless carrier UScellular to provide its AurusLINK fixed-wireless access (FWA) outdoor modem to support the carrier’s FWA business. The device allows UScellular customers to self-install the modem in an outdoor location that can receive a signal from UScellular’s network to provide Wi-Fi connectivity within a home.

Casa Systems as part of the bankruptcy process has also entered into an agreement to sell its cable business to Vecima Networks. That deal includes a base amount Vecima will pay, with Casa Systems then able to conduct an auction process beginning in mid-May to solicit higher potential bids.

Dell’Oro Group analyst Jeff Heynen noted in a blog post that Casa Systems’ cable assets had gained a significant footprint at a number of tier-1 cable providers like Charter Communications, Claro and Rogers. However, it was excluded from a major Charter upgrade program and was losing revenues due to license changes.

Heynen did note that “Casa’s cable products are well-regarded in the industry for their architecture and reliability. We regularly hear from cable operators that the C100G platform continues to serve as the core of their broadband offering.”

Casa Systems added that its international subsidiaries are not debtors in the Chapter 11 filing, but that some of those assets will be included in the two pending sales. It also noted that its Netcomm business in Australia started its own reorganization proceeding last month in that country and is not part of the U.S. process.

Casa Systems bankruptcy filing comes just months after CEO Michael Glickman told SDxCentral that the vendor was working toward more financial stability, highlighting that it has been able to pay down about $100 million of its long-term debt position, which at that time stood at around $180 million. Glickman added that focus would continue as the vendor looked to narrow its focus into areas where it saw revenue-generating opportunities that would allow it to further solidify its financial position.

“The good news is we do have a really strong platform, which enables us to continue to get really good support both from our equity investors as well as our lenders,” Glickman said.

That support never materialized as Glickman in a statement tied the asset sales to an unsustainable business model. The vendor last posted quarterly earnings for the third quarter of 2023, which showed a year-over-year uptick in revenues and a slight improvement in net losses for the vendor.

“Like many in our sector, Casa has experienced a significant decline in revenue and profits due in large part to industry-wide downward capital investment and procurement trends in the cable and telco markets,” Glickman noted in a statement. “We also have incurred significant investments to bring our 5G mobile core and RAN products to market. We believe the sales of our businesses through a Chapter 11 process will maximize value, preserve jobs and minimize disruption for our customers.”

Glickman took over as head of Casa Systems last July, taking over for former President and CEO Jerry Guo who abruptly announced plans to resign from those two positions earlier last year.

Glickman previously spent more than 21 years at Cisco where he last held an SVP title for Cisco’s global service provider segment. Glickman most recently spent two-and-a-half years as president at PacketFabric. Shortly after his arrival at Casa Systems, he brought on former Cisco executive Colin Kincaid as the vendor’s new chief product officer.

Glickman said that he took on the leadership role at Casa Systems because of the vendor’s strong engineering team and overall reputation.

“I can remember competing against Casa in the past and the things that I always heard from those customers, and now that I have visited all of our major customers around the world over my first 90 days, really resonates, which is an incredibly strong engineering team, very innovative and also very nimble,” Glickman said. “We are very much willing to work with customers to try to find solutions on how they want to use our technology. And those are great things. Those are foundational, in my experience, to a great technology company.”

Casa Systems is now working with customers on supporting them through its asset sale process.