Sonata Software Seeks Bankruptcy Protection Against US Retail Client for Outstanding $10.65 Million Debt

Sonata Software Seeks $10.65 Million from US Client in Bankruptcy Petition

Sonata Software Ltd, an Indian software services company, has filed an involuntary bankruptcy petition against OBSA Operating Company LLC, a Minnesota-based retail and financial services company, in a US court. The petition seeks $10.65 million in damages for non-payment of dues.

The move highlights the financial exposure of Sonata Software from a client ramp-down in its retail segment, which contributes approximately $100 million, or 8% of the company's revenue. The retail segment accounts for a significant portion of the company's revenue, with $1.2 billion in revenue last year, a 15.5% increase on a yearly basis.

Delaware district bankruptcy court will decide the validity of the petition. If the court finds merit in Sonata Software's case, a trustee will likely be appointed to oversee the sale and distribution of OBSA's assets to creditors. However, if the court dismisses the petition, Sonata Software may not receive the $10.64 million in damages and dues.

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Sonata Software has factored both scenarios into its financial projections. The company expects its Q4 26 PAT to be accretive compared to Q3 26 due to certain one-time offsetting factors, and revenues are expected to be in line with the guidance provided during the February 6, 2026 earnings call.

Peter Bendor-Samuel, founder of Everest Group, stated that the case could take time to resolve, and the legal action may be seen as a structural blip.