More than two decades after Roomba vacuums first started gliding around homes, the company that makes them has announced it is going into Chapter 11 bankruptcy. According to a report, tariffs have played a role in the company’s fate.
In a Sunday press release, iRobot revealed that it entered into a Restructuring Support Agreement with Picea, its secured lender. Pica is a collective name for Shenzhen PICEA Robotics Co., Ltd. and Santrum Hong Kong Co., Limited, and it is expected to acquire Massachusetts-based iRobot, a company with 274 employees, through a court supervised process.
“This agreement represents a critical step toward strengthening iRobot’s financial foundation and positioning the Company for long-term growth and innovation,” said the press release. It also added that iRobot would voluntarily commence a pre-packaged chapter 11 process that should be complete by February 2026.
According to the United States Courts, debtors usually remain “in possession,” with a Chapter 11 filing, have the powers and duties of a trustee, may continue to operate business, and may, with court approval, borrow new money. Per the iRobot press release, Picea will receive 100% of the equity interests in the company, “which will delever the Company’s balance sheet and enable iRobot to continue operating in the ordinary course, pursue its product development roadmap, and maintain its global footprint.”
Court records cited by USA Today said that iRobot owes more than $3 million in unpaid tariffs. New U.S. tariffs – many have been implemented since President Donald Trump began his second term earlier this year – have “harmed the company,” especially a 46% levy on imports from Vietnam, the outlet reported.
These tariffs have been controversial, with Audacy reporting this month that the Trump administration was sued by wholesale retailer Costco over them. However, Trump has defended the tariff policies and the administration has said they brought in revenue for the country.
“The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners,” said Gary Cohen, CEO of iRobot, of the restructuring. “Together, we will work to continue advancing the industry-leading Roomba robots and smart home technologies that have defined the iRobot brand for more than three decades. By combining iRobot’s innovation, consumer-driven design, and R&D with Picea’s history of innovation, manufacturing, and technical expertise, we believe iRobot will be well equipped to shape the next era of smart home robotics.”
What do Roomba users need to know? Well, during the Chapter 11 process, iRobot is expected to continue operating normally, with no anticipated disruption to its app functionality, consumer programs or product support, according to its press release.
“To maintain business continuity, iRobot has filed a series of customary motions with the Court that will allow the Company to operate in the ordinary course, including to meet its commitments to employees and make timely payments to vendors and other creditors in full for amounts owed before, during, and after the court-supervised process,” it explained.
Once the transaction is completed, iRobot will be a private company owned by Picea and its stock will no longer be listed in the Nasdaq.
“The Company expects that holders of the Company’s common stock will not receive any equity of the reorganized Company, and that all issued and outstanding equity interests in the Company will be cancelled and holders of common stock will experience a total loss and not receive recovery on their investment, if the chapter 11 plan is approved by the Court,” the press release continued.