Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 10. Income Taxes The Company’s effective tax rate was (71.5%) for the period from June 25, 2025 through June 30, 2025 (Successor), (1.8%) for the period from March 30, 2025 through June 24, 2025 (Predecessor) and 0.1% for the period from December 29, 2024 through June 24, 2025 (Predecessor). The Company’s effective tax rate was (213.0%) and (13.9%) for the three and six months ended June 29, 2024. The effective tax rate for interim periods is determined using an annualized effective tax rate (“AETR”), adjusted for discrete items. For the Successor Period, the Company estimated its AETR in recording its interim income tax provision for the various jurisdictions in which it operates. The tax effects of statutory rate changes, significant, unusual or infrequently occurring items, and certain changes in the assessment of the realizability of deferred tax assets are excluded from the determination of the Company’s estimated AETR, as such, items are recognized as discrete items in the quarter in which they occur. The Predecessor Period was also based on the Company’s AETR, including the discrete tax impacts resulting from reorganization adjustments and fresh start accounting. Any changes to its deferred tax assets and liabilities for the Predecessor Period (whether resulting from reorganization adjustments, fresh start adjustments or otherwise) were partially offset with a corresponding adjustment to its valuation allowances. As part of the Chapter 11 bankruptcy proceedings, the Company’s prepetition funded debt was extinguished. The Internal Revenue Code (the “Code”) provides that a debtor in a bankruptcy case may exclude cancellation of debt income (“CODI”) from taxable income but must reduce certain of its tax attributes by the amount of any CODI realized as a result of the consummation of a plan of reorganization. The amount of the Company’s CODI was estimated to be $951,515. As a result, the Company’s U.S. net operating loss carryforwards and tax credit carryforwards will be reduced to zero. The reductions in NOL carryforwards for the CODI are expected to be fully offset by a corresponding decrease to the Company’s valuation allowance as of December 31, 2025. The tax adjustments recorded in the Predecessor period represent the Company’s best estimate using all available information at June 30, 2025. The final tax impacts of the bankruptcy emergence, as well as the Plan of Reorganization’s overall effect on the Company’s tax attributes and tax basis in assets will be refined based on the Company’s final December 31, 2025 financial position as required under the Code. The final tax impacts on the Company’s tax attributes could change significantly from the current estimates. As a result of emergence from the Chapter 11 bankruptcy proceedings, the Company did experience an ownership change. The Company’s ability to utilize disallowed business interest carryforwards to reduce future taxable income and federal income tax is subject to various limitations under Section 382 of the Code. The utilization of such attributes will be subject to an annual limitation under Section 382 of the Code. |