The Department of Justice has notified the Delaware bankruptcy court that an evaluation of Roomba maker iRobot's proposed Chapter 11 plan transactions by the Committee on Foreign Investment in the U.S. could postpone those deals on the eve of a plan confirmation hearing.

In a notice posted to the case docket of iRobot late Tuesday, attorneys from the Commercial Litigation Branch of the Justice Department said the debtor's plan transactions that would hand the company over to Hong Kong-based secured creditor Shenzhen Picea Robots Co. Ltd. may be subject to review by CFIUS to ensure the deal isn't a threat to national security.

The government "submits this notice to inform the court that one or more transactions contemplated by the debtors may be subject to review by the Committee on Foreign Investment in the United States ..., which could affect the ability of the parties to complete the transactions, the timing of completion, or relevant terms," the notice said. "Bankruptcy courts have previously acknowledged that potential national security concerns (including CFIUS review) are relevant factors in bankruptcy proceedings."

Two members of Congress sent a letter Jan. 8 to U.S. Treasury Secretary Scott Bessent, who chairs CFIUS, that highlighted their concerns with the proposed transactions, including that it would give access to private consumer data to a company with close ties to the People's Republic of China.

U.S. Reps. Ritchie Torres, D-N.Y., and Zach Nunn, R-Iowa, said in their joint letter that modern Roomba autonomous vacuum cleaners operate with sophisticated mapping technology, cameras and sensors that have collected detailed floor plans and other spatial data from tens of millions of American homes.

"This sensitive information, in the hands of a PRC-funded entity, could be exploited for surveillance purposes or to advance the Chinese Communist Party's broader intelligence-gathering objectives," the lawmakers said.

"We must not allow our bankruptcy laws to become a back door for the CCP to acquire sensitive American technology and access to the private data of American citizens," the letter continued.

Torres and Nunn added that national security laws in China require companies to cooperate with that country's national intelligence services and share data on request. They said Picea Robotics — the parent of iRobot's largest secured creditor and recipient of 95% of the debtor's equity under the Chapter 11 plan — has been part of China's "Little Giants" program that assists small- to medium-sized businesses with direct government assistance.

The transfer of significant intellectual property assets that cover autonomous navigation, artificial intelligence and robotics with dual-use applications could aid China in its efforts to fuse military and civilian technology, according to the letter.

CFIUS review could result in several outcomes, including a finding that there are no national security risks attendant to the transaction, the DOJ said in its filing. If a determination is made that there are risks to national security, the committee and parties to the transaction can come up with mitigation strategies to address the risk. If mitigation isn't possible and the parties don't voluntarily abandon the deal, then the matter is referred to the president, who will consider whether it is appropriate to suspend or prohibit the transaction, according to the notice.

An initial review takes 45 days, with the possibility of further 45 days of investigation by the committee, the Justice Department noted. If the matter is referred to the president, he has 15 days to make a decision on taking action to stop the deal, with any decision not subject to judicial review, the filing said.

Representatives of iRobot did not immediately respond Wednesday to a request for comment.

The Massachusetts-based company filed for bankruptcy protection in December with over $250 million in debt. It has proposed a prepackaged Chapter 11 plan that would transfer control of its business to its secured creditor, primary manufacturer and senior lender.

Under the proposed plan, Picea would convert its first-lien term loans into a 95% ownership stake in iRobot once the company emerges from bankruptcy, fully resolving its roughly $74 million in general unsecured claims, according to the plan disclosure statement.

Picea and iRobot entered into a restructuring support agreement just before the bankruptcy filing with the plan expected to take effect by February 2026, iRobot's chief financial officer, Karian Wong, said in a first-day declaration. Picea is iRobot's largest secured and unsecured creditor that holds a $180 million first-lien term loan and a $74 million unsecured trade claim.

The restructuring transaction would also cancel all existing equity and stock and take the company private, delisting it from the Nasdaq, the company said in a statement last month.

U.S. Bankruptcy Judge Brendan L. Shannon is set to consider confirmation of the proposed plan beginning at 10 a.m. Thursday in Wilmington, Delaware.

Best known for its robotic vacuum cleaner, of which the company has sold 50 million units since its launch in 2002, iRobot fell on hard times in the face of declining demand and tariffs on China and Vietnam, where its products have been produced.

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