A Delaware bankruptcy court Thursday gave final confirmation of a Chapter 11 plan proposed by iRobot Corp., the maker of the Roomba robot vacuum, that calls for eliminating $257 million in debt and transferring ownership of the company to its secured creditor.

During a hearing in Wilmington, U.S. Bankruptcy Judge Brendan L. Shannon approved the reorganization proposal and disclosure statement, about one month after the debtor filed for bankruptcy. Under the plan, control of the business will be handed over to its primary manufacturer and secured creditor, Shenzhen Picea Robots Co. Ltd., and its subsidiary Santrum Hong Kong Co. Ltd., also known as Picea HK.

"I place significance also on the fact that the debtors are here today on an uncontested basis, having successfully resolved issues, informally or formally raised by various stakeholders, including the United States trustee and the United States," the judge told the parties.

Counsel for the debtor cited broad support from its major stakeholders. The two voting classes, holders of first-lien claims and those holding Picea HK supply agreement claims, also voted to accept the plan.

"We are … pleased to be here today on a fully consensual basis," John T. Weber of Paul Weiss Rifkind Wharton & Garrison LLP told the court for iRobot. "Today's hearing is the culmination of the debtor's extensive efforts over the last several months, working with their key stakeholders to implement value maximizing and comprehensive restructuring."

The debtor received informal responses from Lexon Insurance Co., Oracle America Inc., Atlantic Specialty Insurance Co. and the U.S. Trustee's Office, and has resolved all related issues in the modified plan.

The U.S. Department of Justice warned late Tuesday that certain transactions contemplated in iRobot's Chapter 11 may be subject to review by the Committee on Foreign Investment in the U.S., the interagency body charged with evaluating national security risks arising from foreign investment in U.S. businesses.

"The debtors and Picea have already engaged constructively with the applicable regulators, including CFIUS agencies on data protection and security, and Picea is taking steps to ensure data security," Weber said.

He added that the Justice Department is not objecting to the confirmation and the debtor confirmed with the government that nothing in the plan limits any federal regulatory powers.

Massachusetts-based iRobot filed for Chapter 11 protection Dec. 14 with a prepackaged plan supported by a restructuring support agreement with Picea.

Best known for its robotic vacuum cleaners, of which it has sold 50 million units since launching in 2002, iRobot has struggled amid declining demand and tariffs on products manufactured in China and Vietnam, according to a first-day declaration.

A proposed merger with Amazon failed to clear regulatory hurdles in 2022, and a potential sale fell through in October, leading to the bankruptcy filing, the company said.

Under the bankruptcy plan, all of iRobot's funded debt would be converted into equity. All first-lien claims and Picea HK supply agreement claims would be equitized, giving Picea HK 100% ownership of the reorganized company's new common equity, according to a filing.

Existing equity interests would be canceled on the plan's effective date, while general unsecured claims and other priority and secured claims would remain unimpaired and be treated in the ordinary course.

Once it emerges from bankruptcy, iRobot would become privately held, delist from the Nasdaq and operate under the ownership of Picea HK.

The company's plan also calls for postbankruptcy governance changes, including creating a Delaware subsidiary, iRobot Safe Corp., to strengthen safeguards for personal and sensitive data.

The debtor is represented by Sean T. Greecher, Andrew L. Magaziner, Shella Borovinskaya and Kristin L. Cardoza of Young Conaway Stargatt & Taylor LLP and Paul M. Basta, Alice Belisle Eaton and John T. Weber of Paul Weiss Rifkind Wharton & Garrison LLP.

The government is represented by Kirk Manhardt, Rodney Morris and Dominique V. Sinesi of the U.S. Department of Justice.

The case is In re: iRobot Corp., case number 1:25-bk-12197, in the U.S. Bankruptcy Court for the District of Delaware.