Volvo's "cut off" deal a fatal blow! Laser radar giant Luminar (LAZR.US) goes bankrupt, owing a staggering $1 billion.

Following the termination of its contract with Swedish car manufacturer Volvo, Luminar (LAZR.US), a company producing laser sensors for cars, has filed for bankruptcy protection. At its peak, Luminar was valued at up to $5 billion. The company, based in Orlando, United States, filed for Chapter 11 bankruptcy protection in the Southern District of Texas court this Monday. In its bankruptcy filing, the company listed its assets between $100 million and $500 million, and liabilities between $500 million and $1 billion. In a statement, Luminar said it had reached an agreement with Quantum Computing to sell its subsidiary Luminar/Semiconductor for $110 million in cash. The company stated that the sale may change due to higher or better offers under section 363 of the Bankruptcy Code. The company is also seeking to sell its laser radar business, which produces sensors for autonomous driving systems. The statement mentioned that to facilitate these transactions, provide funding for the Chapter 11 bankruptcy process, and support operations during the sale, a group of temporary creditors has agreed to allow Luminar to use approximately $25 million in cash under an agreed cash collateral order. This group represents 91.3% of the company's first priority notes and approximately 85.9% of the second priority notes. Luminar stated in the announcement that it expects to continue operating its business during the Chapter 11 bankruptcy process and will work with suppliers and partners to minimize disruptions and maintain delivery of its laser radar hardware and software. Early Signs The auto parts manufacturer stated in a document on November 17 that it had received notice that Volvo had terminated its supply chain relationship with its laser radar products. The document showed that Luminar had previously made significant loss claims to Volvo and had suspended its supply commitments to the car manufacturer. According to a financial report, Luminar reached a grace period agreement with a majority of bondholders on October 30, after defaults occurred in its senior bonds and 2030 convertible bonds. Luminar had already experienced internal disputes in May this year, with the CEO leaving due to "business ethics" issues, exposing the difficulties faced by the once high-flying global top 2 laser radar company to the public. Following this, Luminar was rumored to be laying off large numbers of employees, and the cash flow was getting closer to "going bankrupt". Even the CFO resigned at the end of last month, citing the reason as "seeking other career opportunities" and "not due to any disagreements with the company's financial condition or audit firm". This can be seen as a subtle way of announcing to the outside world that Luminar is facing insurmountable financial and business challenges. Now that Luminar has gone bankrupt, it has only been a little over two years since its peak market value of $5 billion.