Apple Tree Partners Lawsuit: Chancery Ruling and Chapter 11 Filing

The Apple Tree Partners lawsuit is a contract fight between the life sciences venture firm Apple Tree Partners (ATP) and its dominant investor, entities tied to Russian billionaire Dmitry Rybolovlev, over roughly $97 million in unpaid capital calls. ATP sued in Delaware in May 2025, won a post-trial ruling in December 2025 ordering the Rigmora entities to pay, and four days later filed for Chapter 11 bankruptcy to keep cash flowing to about 30 portfolio biotechs while the fight continues in a parallel Cayman Islands proceeding.

Who Is Suing Whom

ATP, founded in 1999 by Dr. Seth Harrison, sued Rigmora Biotech Investor One LP and Rigmora Biotech Investor Two LP in the Delaware Court of Chancery on May 30, 2025 (Case No. 2025-0607-KSJM).¹ The two Rigmora entities are vehicles for a Rybolovlev family trust that has funded roughly 98% of ATP Life Science Ventures, L.P., a Cayman Islands limited partnership formed in 2012.² By the end of 2024, total contributions reached about $2.309 billion, with Rybolovlev personally responsible for roughly $2.30 billion of that. The fund’s combined distributions and holdings stood at about $6.2 billion as of December 31, 2024.

ATP’s complaint alleged that Rigmora breached the limited partnership agreement by refusing to honor valid capital calls. It asked the court to order the overdue payments, authorize the default remedies written into the partnership agreement, and declare that Rigmora had forfeited its voting and budget-approval rights.³

What Each Side Says Happened

ATP traces the breakdown to Russia’s invasion of Ukraine in early 2022. After that, according to ATP, Rigmora’s enthusiasm for the partnership disappeared, and the family office began withholding funds and refusing to approve new budgets. ATP said the freeze lasted about 18 months and forced layoffs across the portfolio.³

Rigmora tells a different story. The family office said it made “legitimate requests for information” about how ATP was managing its money and that ATP dodged those requests.³ Rigmora accused ATP of mismanagement and a “lack of probity,” and said ATP was attempting to seize 50% of Rigmora’s stake in the fund, which Rigmora called an “obvious conflict of interest.” It labeled at least seven portfolio companies, including Deep Apple Therapeutics and Aethon Therapeutics, “hopeless investments.”¹

An earlier skirmish over distributions from Braeburn, a Rigmora-funded ATP company generating roughly $300 million a year from an opioid-addiction drug, was settled in December 2024, with the parties waiving the remaining $21.3 million in commitments to that investment pool.² The broader funding standoff continued.

The Delaware Chancery Ruling

Rigmora responded to the Delaware suit by opening its own action in the Cayman Islands in June 2025, seeking a “just and equitable winding up” of the fund, and moved to stay the Delaware case in favor of that forum. On June 27, 2025, the Chancellor denied the stay, describing Rigmora’s Cayman filings as “properly viewed as…reactionary filing(s).”¹

After an expedited trial, Vice Chancellor Kathaleen St. Jude McCormick issued a post-trial opinion on December 5, 2025 that largely sided with ATP. The court held that Rigmora was contractually obligated to honor funding pledges for portfolio companies where ATP had established budgets and ordered Rigmora to pay approximately $96.9 million in outstanding capital calls.⁴⁵ Judge McCormick wrote that “the public interest strongly favors preserving potentially life-saving research programs.”

ATP did not get everything it asked for. The court declined to strip Rigmora of its contractual approval rights, one of ATP’s central requests, and deferred several declarations touching on Cayman Islands law to the parallel proceedings there.² Rigmora said publicly that the capital-call ruling would be “subject to appeal.”⁵

Why ATP Filed Chapter 11 After Winning

Four days after the ruling, on December 9, 2025, Apple Tree Life Sciences, Inc. and affiliates filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware (Case No. 1:25-bk-12177). Thirteen portfolio companies were identified in filings as affected by the dispute.⁶⁵ ATP said the filing was necessary to “ensure its portfolio companies have the funding and resources required to continue their critical missions to research and develop novel breakthrough treatments for cancer, neurological disorders, infectious diseases, and other serious diseases.”

Rigmora called the bankruptcy “nothing more than a delay tactic” and a “desperate” attempt “to avoid oversight” by the Cayman Islands courts, saying the filing reflected ATP’s dissatisfaction with the partnership agreement rather than actual insolvency.⁴

By March 2026, ATP moved to solicit support for a Chapter 11 exit plan, telling the bankruptcy court it needed at least $300 million to emerge.⁷ In April 2026 it sought authorization to use $7 million in funding while the broader plan remained pending.⁸

The Parallel Cayman Islands Case

Rigmora’s Cayman action, filed in June 2025, seeks the winding up and liquidation of the fund. Rigmora argued it had lost “trust and confidence” in ATP as general partner and alleged mismanagement and a lack of transparency.⁴ ATP called those filings retaliatory. The Delaware Chancery Court kept jurisdiction over the contract claims but explicitly deferred certain Cayman-law questions to the Cayman court.² That case remained pending as of mid-2026.

What’s at Stake for the Portfolio

The funding freeze put roughly 30 early-stage biotechs at risk, including preclinical companies such as Aethon Therapeutics, Apertor Pharmaceuticals, Deep Apple Therapeutics, Evercrisp Biosciences, Initial Therapeutics, Marlinspike Therapeutics, Nine Square Therapeutics, and Red Queen Therapeutics, along with clinical-stage companies including Aulos Bioscience, Ascidian Therapeutics, Marengo Therapeutics, and Replicate Bioscience.⁵

Several had lined up outside deals that cut against Rigmora’s “hopeless” characterization. Deep Apple Therapeutics announced an $812 million research and licensing collaboration with Novo Nordisk in June 2025 for oral cardiometabolic treatments.⁹¹⁰¹¹¹² Marengo Therapeutics was mid-trial on invikafusp alfa, which had FDA Fast Track designation for colorectal cancer and had cleared the safety run-in for a combination trial with Gilead’s Trodelvy by September 2025.¹³

Where the Case Stands

As of mid-2026, the dispute is playing out across three forums at once. In the Delaware bankruptcy court, ATP is pursuing an exit plan that would require at least $300 million in new funding.⁷ The Chancery Court’s December 2025 order requiring Rigmora to pay roughly $97 million stands but faces a potential appeal. And Rigmora’s Cayman Islands liquidation petition remains open. The outcome will decide the fate of billions of dollars in biotech investments and the research programs of about 30 companies working on treatments from cancer immunotherapies to RNA-based genetic medicines.

1
Apple Tree Partners. ATP Life Science Ventures Litigation Update
2
Delaware Courts. ATP III GP, Ltd. v. Rigmora Biotech Investor One LP, C.A. No. 2025-0607-KSJM
3
Fierce Biotech. Apple Tree VC Sues Key Investor, Warns Portfolio Biotechs Are on Brink of Collapse
4
BioPharma Dive. Apple Tree Partners Chapter 11 Bankruptcy Dispute With Rigmora and Rybolovlev
5
Fierce Biotech. Apple Tree Partners Files Chapter 11 Bankruptcy to Keep Cash Flowing to Portfolio Biotechs
6
PR Newswire. Apple Tree Partners Initiates Voluntary US Chapter 11 Cases in Delaware to Restructure Operations
7
Law360. VC Apple Tree Seeks at Least $300M to Exit Ch. 11
8
Law360. VC Apple Tree Seeks $7M as Judge Mulls Ch. 11 Funding Fight
9
Deep Apple Therapeutics. Deep Apple Therapeutics Announces Collaboration With Novo Nordisk
10
Aethon Therapeutics. Aethon Therapeutics Announces Collaboration With Revolution Medicines
11
Ascidian Therapeutics. In the News
12
FirstWord Pharma. Ascidian Therapeutics and Eli Lilly Collaboration
13
Apple Tree Partners. Marengo Therapeutics STARt-002 Trial Update