💥New Chapter 11 Bankruptcy Filing - Anthology Inc.💥
"Power of together" edtech company file chapter 11 to split up
Sharpen your pencils, boys and girls, because, on September 29, 2025, the Boca Raton, Florida-based education technology aka “edtech” company Anthology Inc. and 26 affiliates (collectively, the “debtors” and, together with their non-debtor affiliates, the “company”) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Perez).
If you were in school at any point over the past two-odd decades, you should be familiar with the company’s flagship product, Blackboard Learn (“Blackboard”) …
… which “… facilitates course delivery and management … with tools for course design, assessments, grading, performance analysis and improvement, and cross-product integration (including academic integrity and plagiarism tools).” Lotta words for, 🙄, “education-focused CMS.”
And folks really love the platform too. Why, here’s just one glowing review courtesy of X.
Anyway, in FY25, Blackboard generated ~$240mm in revenue and lives in the debtors’ Teaching & Learning (“T&L”) business segment, but there are three other complementary segments: (i) Enterprise Operations (“EO”), (ii) Lifecycle Engagement (“LE”), and (iii) Student Success (“SS”) …
… which generate the balance of the debtors’ $450mm revenue total.
However, after taking costs and expenses into account, the company only banked ~$33mm in EBITDA in FY23, which didn’t even come close to serving its then ~$1.5b debt stack, consisting of a revolver and 1L and 2L term loans, which the company had taken on to fuel expansion and M&A activity over the prior years.
So, in April and May ‘24, the company bought time by LME’ing into a superpriority credit facility with the support of 100% of its revolving lenders,* 99% of its 1L lenders, and “certain” of its 2L lenders.
But the business, of course, still sucked a$$. Per the CRO and first day declarant, FTI Consulting, Inc. ($FCN)’s Heath Gray, “[o]ver the last two years, the Company’s annual revenue has declined by nearly $80 million,”** EBITDA fell ~88% to $4mm in FY25, and the debtors merrily skipped …
… on by interest payments in December ‘24 (and then again in March ‘25), leading to standstills and yet further negotiations.
So the LME really only resulted in this unwieldy, petition-date debt stack:
But hey, what a “success” — the company and its lenders coalesced around the former’s “Power of Together” slogan, leaving only $1.5mm of the pre-LME facility outstanding, 💪.
While we’re on the topic of togetherness though, we should talk about the debtors’ bankruptcy strategy: there are very few “together” vibes as the debtors intend to cash off the non-L&T segments. Perhaps it’s, lol, time for a new motto; feel free to test this one out:
The debtors intend to dispose of EO to Ellucian Company LLC (“Ellucian”), which submitted a $70mm cash stalking horse bid, and LE and SS to Encoura, LLC (“Encoura”), which submitted a $50mm cash stalking horse bid. Here’s the proposed timeline:
But, backed by an ad hoc group holding ~87% and 68% of the tranche A and B superpriority loans (the “ad hoc group”), including the ever-busy Oaktree Capital Management, L.P. and Nexus Capital Management LP (“Nexus”), and a restructuring support agreement (the “RSA”) signed by the ad hoc group and sponsor Veritas Capital Fund Management LLC, the T&L segment will be “staying in the family.” Well sort-of. There’ll be a chapter 11 plan that equitizes the tranche A and B loans (to receive 99% and 1% of the reorg equity, respectively), raises at least $50mm in new capital through the issuance of pref equity, and, most likely, serves up a 🍩 to everyone else. All set to happen by December 23, 2025, the confirmation milestone under the RSA. Merry Christmas “everyone else”!
To fund the cases through then, the ad hoc group is providing a backstopped, headline $100mm DIP term loan, composed of (i) $50mm in new money ($10mm interim) and (ii) a 1:1 roll-up of the prepetition superpriority tranche A term loans. Participation in the DIP will be available to all 1L lenders who sign the RSA and “… have not breached their obligations under the Prepetition Superpriority First Lien Credit Agreement,” which we suppose rules out Vector Capital Credit Opportunity Master Fund LP and Vector Investment Partners I LLC. Those yokels didn’t fund $18.5mm when the debtors drew down on the revolver back in March ‘25 and bought themselves a happy little lawsuit.**** Womp womp. Anyway, the DIP carries interest at 8.75% and features a 9.5% PIK backstop fee on interim order.
The court held a one-hour first-day hearing on September 30, 2025, at which 19th century tech (☎️) defeated pretty much every participant and Kirkland & Ellis LLP’s Chad Husnick dryly showed everyone why his partner Josh Sussberg is the schtick reigning world champ …
Judge Perez: “… we were wondering collectively whether you would pierce your ears?”
Mr. Husnick: “Your Honor, no, but I’ll take some college courses.”
That weak sh*t ain’t getting in People magazine.
All relief was granted otherwise unceremoniously, and the court scheduled the second-day and bidding procedures hearings for November 3, 2025 at 9am CT.
The debtors are represented by Kirkland & Ellis LLP (Chad Husnick, Charles Sterrett, Melissa Mertz, Anna Alieksieieva, David Hackel, Jeffrey Goldfine, Joshua Greenblatt, Karra Puccia) and Haynes and Boone LLP (Charles Beckham Jr., Arsalan Muhammad, Kourtney Lyda, Re’Necia Sherald, Charles Jones II) as legal counsel, FTI Consulting Inc. ($FCN) (Heath Gray, Tom Sledjeski, Gunnar Wolfe, James Goodyear) as financial advisor, and PJT Partners LP ($PJT) (Brett Herlihy, Jitesh Jeswani, Meera Satiani, Jamal Davis) as investment banker. Their special committee is composed of Neal Goldman and Alan Carr. The ad hoc group is represented by Davis Polk & Wardwell LLP (Damian Schaible, David Schiff, Joshua Sturm, Amber Leary) and Porter Hedges LLP (John Higgins, M. Shane Johnson, Megan Young-John, Jordan Stevens) as legal counsel, Alvarez and Marsal LLC as financial advisor, and Lazard Frères & Co. LLC ($LAZ) as investment banker. Ad hoc group member Nexus is represented by Milbank LLP (Evan Fleck, Michael Price) as legal counsel. The debtors’ equity sponsor Veritas Capital Fund Management LLC is represented by Gibson, Dunn & Crutcher LLP (Jason Goldstein, Jonathan Dunworth) as legal counsel. Ellucian, as EO stalking horse bidder, is represented by Simpson Thacher & Bartlett LLP (David Zylberberg, Ian Kitts) and Fishel Law Group (Michael Fishel) as legal counsel. Encoura, as LE and SS stalking horse bidder, is represented by Milbank LLP too (Rick Presutti, Lowell Dyer) as legal counsel. JPMorgan Chase Bank, N.A. ($JPM), as prepetition superpriority and 1L agent, is represented by O’Melveny & Myers, LLP (Ana Alfonso, Jennifer Taylor, Laura Smith) as legal counsel.
*The revolver was refi’d entirely, so naturally 100% support ain’t surprising.
**Driven by customer attrition due to “… an aging product portfolio that had fallen behind competitive offerings and the Company’s declining reputation in the marketplace.”
***The ad hoc group’s members include BlackRock Financial Management, Inc. ($BLK), Morgan Stanley Investment Management Inc. ($MS), Nexus Asset Management LP, UBS Asset Management (Americas) LLC and Oaktree Capital Management, L.P.
****The debtors filed a lawsuit in April ‘25, but it wasn’t resolved ahead of the petition date.
Company Professionals:
Legal: Kirkland & Ellis LLP (Chad Husnick, Charles Sterrett, Melissa Mertz, Anna Alieksieieva, David Hackel, Jeffrey Goldfine, Joshua Greenblatt, Karra Puccia) and Haynes and Boone LLP (Charles Beckham Jr., Arsalan Muhammad, Kourtney Lyda, Re’Necia Sherald, Charles Jones II)
Financial Advisor: FTI Consulting Inc. (Heath Gray, Tom Sledjeski, Gunnar Wolfe, James Goodyear)
Investment Banker: PJT Partners LP (Brett Herlihy, Jitesh Jeswani, Meera Satiani, Jamal Davis)
Special Committee: Neal Goldman, Alan Carr
Claims Agent: Stretto (Click here for free docket access)
Other Parties in Interest:
Ad Hoc Group of Revolving and Tranche A and B Superpriority Loan Holders
Legal: Davis Polk & Wardwell LLP (Damian Schaible, David Schiff, Joshua Sturm, Amber Leary) and Porter Hedges LLP (John Higgins, M. Shane Johnson, Megan Young-John, Jordan Stevens)
Financial Advisor: Alvarez and Marsal LLC
Investment Banker: Lazard Frères & Co. LLC
Large 1L Holder & Ad Hoc Group Member: Nexus Capital Management LP (Gateway HE Loans GP LLC)
Legal: Milbank LLP (Evan Fleck, Michael Price)
Sponsor: Veritas Capital Fund Management LLC
Legal: Gibson, Dunn & Crutcher LLP (Jason Goldstein, Jonathan Dunworth)
Enterprise Operations Asset Package Stalking Horse: Ellucian Company
Legal: Simpson Thacher & Bartlett LLP (David Zylberberg, Ian Kitts) and Fishel Law Group (Michael Fishel)
Lifecycle Engagement and Student Success Asset Packages Stalking Horse: Encoura LLC
Legal: Milbank LLP (Rick Presutti, Lowell Dyer)
Prepetition Superpriority and 1L Agent: JPMorgan Chase Bank, N.A. ($JPM)
Legal: O’Melveny & Myers, LLP (Ana Alfonso, Jennifer Taylor, Laura Smith)