💥Attack Vector💥

Updates: Anthology Inc. + Ascend Performance Materials Holdings Inc. + Lodging Enterprises, LLC

Unless y’all are interested in reading about a boring, busted Orlando condo association, October ‘25 has continued to be a total in-court dud for restructuring professionals … excluding another auto-industry filing courtesy of “buy here, pay here” debtor PrimaLend, which we’ll dig into in a forthcoming a$$-kicking edition.

So, once again, we’re gonna use the mid-week update to catch up on another trio of in-court situations: edtech, hotels, and … uh … stretched-out nylon, albeit not in that order. Time to get learned 👇.

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⚡Update: Anthology Inc.⚡

Earlier this month, we edumacated y’all on “Power of Together” edtech co. Anthology Inc. and its twenty-six affiliates (collectively, the “debtors” and, together with their non-debtor affiliates, the “company”) after they kicked off the school year by filing “power of division” chapter 11 sale and reorg cases in the the Southern District of Texas (Judge Perez).

💥New Chapter 11 Bankruptcy Filing - Anthology Inc.💥

Since that 👆 coverage, the docket has been, for the most part, cold, as a newly appointed official committee of unsecured creditors (the “UCC, as of October 8, 2025) represented by Herbert Smith Freehills Kramer (US) LLP (Rachael Ringer, Natan Hamerman, Jennifer Sharret, Kelly Porcelli, Jared Borriello) and Vartabedian Hester & Haynes LLP (Jeff Prostok, Deirdre Brown, Martin Sosland) got warm. Any day now, guys: it’s October 29, and the UCC ain’t filed anything on the docket ahead of the scheduled November 3, 2025 second-day and bidding procedures hearing.

The UCC’s failure to illuminate us, however, doesn’t mean others aren’t pipin’ hot, 🥵. Enter ~18.6%-by-commitment prepetition revolving lender Vector Capital Credit Opportunity Master Fund LP and Vector Investment Partners I LLC (collectively, “Vector”). We mentioned Vector in our earlier coverage ⬆️ because, back in March ‘25, it straight-up refused to fund the debtors’ ~$18.5mm drawdown request. Whoa, what? Why? Vector was of the view that the debtors had already defaulted on the facility; therefore, it was, far as it concluded, required to do precisely jack sh*t.*

Worthy of a demerit? That ain’t entirely clear, but the debtors (i) tattled, in April, by filing a still-pending lawsuit against Vector in New York state court for, from their perspective, breaching its funding obligations and (ii) sought schoolyard justice, aided by an ad hoc group holding ~87% and 68% of the debtors’ tranche A and B superpriority loans (the “ad hoc group”) …

Source: Source: Docket 84. The revolver and tranche A claims are pari.

… by cutting Vector out of the $50mm new money, $50mm non-pro rata roll-up DIP term loan.

Source: PETITION LLC Meme Department

It was time for Vector to get in its own set of piranhas punches, and on October 17, 2025, it objected to the final DIP. Here’s the brunt of the blow that landed with us:

“Here, the selective Roll-Up Loan violates pro-rata sharing rights under Section 10.01(d) and the priming DIP violates the anti-subordination blocker under 10.01(i) of the Prepetition Credit Agreement. Under both provisions, consent from the affected lender was necessary for any deviation. No such consent was obtained, or even sought, from Vector. If the parties to the Prepetition Credit Agreement had intended to permit non-pro rata roll-ups, they would have included an express DIP exception. They did not.”

Meanwhile, this was, at best, a glancing jab:

“The proposed DIP Facility also violates the Bankruptcy Code. Excluding Vector from the Roll-Up Loan and the New Money Term Loans is neither ‘fair and reasonable,’ nor a proper exercise of the Debtors’ business judgment. Further, functioning as little more than a litigation tactic against Vector, the DIP Facility circumvents the plan confirmation requirement, serving as a ‘sub rosa’ plan.”

Honestly, “glancing” is far too generous. More like a whiff.

Source: PETITION LLC Meme Department

This is normally where we’d pour through the credit agreement to give our take, but the debtors be private investments of equity holders Veritas Capital Fund Management, L.L.C., Providence Equity Partners, and Leeds Equity Partners,** dipped from public markets in ‘11, and, worst of all, no one bothered to send us the debt docs 😞.

But that doesn’t stop us from speculating where the objection lands, which is, in all likelihood, a hodgepodge deal that welcomes Vector back into the fold per a settlement or language reserving rights pending the results of the lawsuit.

Or perhaps a la American Tire, where after Judge Goldblatt didn’t sign off on prophylactically releasing the majority ad hoc group for lender-on-lender, pro rata breaches, the ad hoc group 86’d the entire roll-up. Because, let us be blunt, that’s the strongest part of the argument and, in its absence, we don’t think Judge Perez will lose any sleep rubberstamping giving final approval of an interim DIP backed by the debtors and the ad hoc group.

However, if that’s the outcome, chapter 11 graduation issues linger: Vector’s counsel, Glenn Agre Bergman & Fuentes LLP (Jed Bergman, Jonathan Friedman, Shai Schmidt, George L. Santiago, Esther Hong) and Bonds Ellis Eppich Schafer Jones LLP (Ken Green, Aaron Guerrero, Bryan Prentice), have clearly been studying up on recent developments in the Southern District of Texas and cited, approvingly, albeit not convincingly,** Proskauer Rose LLP’s David Hillman’s recent victory on appeal in ConvergeOne.

In any event, as of writing and as we noted at the top, the debtors’ second-day and bidding procedures hearings are still set for November 3 at 9am CT. While we wait, let’s have fun with a PETITION LLC-branded pop quiz 👇: what do you, dear readers, expect to see in the next few days:

Since it’d be the first second-day punt, we put $10 on the last option.

*Vector’s argument appears to be premised on needing “Required Revolving Credit Lenders” to waive defaults. In the April ‘25 lawsuit, the debtors alleged that certain “Required Lenders” – which would presumably be an overlapping but separate collective of tranche A and revolving lenders – “… had purportedly waived the [] events of default through prior correspondence,” but Req. Lenders ain’t necessarily Req. Revolving Credit Lenders. Whoever loses will be required to attend summer school to retake reading comp.

**Veritas, Providence, and Leeds own ~68%, 21%, and 9%, respectively, of the common. Those splits arose in ‘20 and ‘21 as the debtors traded hands and expanded, and apparently Providence and Leeds didn’t feel the need to drop out entirely.

***Vector’s ConvergeOne cite reads:

“The court in ConvergeOne Holdings Inc. recently held that giving preferential treatment to similarly situated settling parties over non-settling parties may be impermissible discrimination.”

Setting aside clear ways to distinguish the case, “may be” ain’t A+, advocacy-oriented material and you’re not going to find the debtors’ Kirkland & Ellis LLP or the ad hoc group’s Davis Polk & Wardwell LLP shaking in their respective boots loafers.

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⚡️Update 2: Ascend Performance Materials Holdings Inc.⚡️

While on the topic of picking fights…

The last time we checked in on the chapter 11 cases of nylon-producer Ascend Performance Materials Holdings Inc. and its ten affiliates (collectively, the “debtors”), the debtors’ ad hoc group of term loan lenders (the “ad hoc group”), represented by Gibson, Dunn & Crutcher LLP (“GDC”) and* Howley Law PLLC, decided to beef with the official committee of unsecured creditors’ (the “UCC”) decision to employ Ducera Partners LLC (“Ducera”) as its investment banker.

💥Wag! the White Flag💥

Or was it the UCC’s advisors’ expectation to run up ~$19mm in fees in a bankruptcy that will, per the ad hoc group, “almost certainly” equitize their $400mm term loan DIP? Of which $250mm is new money, 😳.

Probably the latter. Either way, the ad hoc group wasn’t wrong …

Wait, we need to clarify. Because it was wrong as heck about Ducera. The court held a 2.25-hour hearing on July 17, 2025,** and well, please let this be an indication of how its argument went …

Source: Docket 667

It got, um, nothing for the disruption. The concessions Ducera gave on the order ⬆️ were limited to unremarkable, customary tweaks, and came from the shutdown-suffering US trustee.

But what the ad hoc group wasn’t wrong about was the equitization of the DIP. A few weeks after the hearing, on August 12, 2025, the debtors filed a disclosure statement (the “DS”) and a chapter 11 plan that did just that.

This “investment” be lookin’ great, y’all:

Source: GIPHY

Not that equitizing the bankruptcy DIP was all the financing the debtors would ultimately need to get out of chapter 11. Over the course of a couple months, the debtors revised the DS and plan (DS here, plan here). Twice (DS here, plan here). Which — turns out the UCC wasn’t wrong either! — gave the UCC’s professionals an agreed fee cap of …

Source: GIPHY

…. $~18mm (through the DS hearing), plus $200k (excluding Ducera’s fees), plus $250k (again, excluding Ducera’s fees). Or … *let us double check the math* … roundabouts what the UCC said from the jump.

Hmm, let us just add it — alongside ModivCare — to our running ad hoc group vs. UCC fee-dispute scorecard:

Source: PETITION LLC Meme Department

Really showed ‘em who’s boss, Mr. Greenberg Howley.

Anyway, we already mentioned that a $250mm-DIP new money financing was just the beginning. To, among other things, fund the UCC’s fees, the ad hoc group is ponying up again. Or we should say, the members of its steerco are because the plan also contemplates a $100mm equity rights offering + a $100mm post-reorg holdco term loan to be offered over to the holders of DIP term loan claims (each backstopped by the steerco for a 10% fee) to fund the debtors’ exit …

Source: Tenor

Any minute though, 🤞, tariffs will really put a dent on Chinese competition undercutting the biz.

Regardless, it ain’t hard to discern that, with DIP equitization and the need for another $200mm to light aflame, GUCs were already … what’s the right term of art? … oh yeah … f*cked. So aside from paying UCC profs, the plan only provides the vast majority of ‘em a heaping pile of near-certain jack sh*t. Again, not dissimilar from ModivCare. Here’s the DS’ description:

But, being generous, deeply out of the money litigation interests — those first-recovering prepetition term loan claims total ~$1.1b — are still better than a 🍩. Maybe? Eh, probably not.

At least go-forward, “critical” vendors will fare better. About 25% of their prepetition claims are set to be paid, which, um, sure. Sounds like a recipe for success on buttery-smooth post-effective date arrangements 😉.***

Not that you’ll find Judge Lopez complaining. On October 20, 2025, he unceremoniously conditionally approved the DS, sending the debtors out to solicit the plan, and scheduled the combined confirmation hearing for November 24, 2025 at 3pm CT.

At the same hearing, the debtors had other news. If you recall, they previously drew contractor MasTec Power Corporation’s (“MasTec”) ire by drawing down on a ~$13.3mm letter of credit (“LC”) before they filed and filing an late May ‘25 adversary complaint, which, in turn, caused MasTec to file an August ‘25 lift-stay motion to claw back the cash and replace it with a bond. But the debtors objected. And MasTec replied. And it all seemed like a general waste of time and resources when that ⬆️ is the plan recovery, so everyone headed to mediation with the former Judge Chapman. That pow-wowing led to a “deal,” so here’s debtors’ counsel, Kirkland & Ellis LLP’s (“K&E”) Oliver Paré, with the good news:

“On April 21st, the debtors filed these Chapter 11 cases with the support of their lenders, but with no RSA, approximately $350 million in trade liabilities, seven asset financing arrangements in need of renegotiation, and the specter of litigation with MasTec casting a shadow on the debtors’ path forward. These were tall odds. I’m happy to share that with the leadership of the hardest working management team in the industry …”

K&E never missing an opportunity to plug management 🙄:****

Source: PETITION LLC Meme Department.

Anyway, Mr. Paré went on:

“… the unwavering support of our lenders, the collaboration of the unsecured creditors committee, and an assist from Judge Chapman as mediator to the MasTec dispute, those odds were overcome.”

With respect to MasTec, Mr. Paré explained:

“The settlement contained several parts. First, the debtors will agree to release the LC proceeds to MasTec. Second, the debtors will pay MasTec an additional $9 million, with $5 million paid at emergence, and $2 million paid on each of the first two anniversaries of the effective date. If that latter $2 million payment is prepaid on the first anniversary of the effective date, the parties have agreed that it will be reduced by $500,000 for a total of $8.5 million.”

So putting on our Anthology-branded thinking cap, and, lol, noticing the debtors are paying out ~$22.3mm to MasTec, Mr. Paré and his colleagues clearly had no expectation of winning that fight. But hey, another “overcoming of odds” that lets you save face and dress up an L as a W. In any event, the 9019 motion should hit the docket “… in a matter of days” and will likely be teed up for consideration on November 24, 2025 as well.

*GDC didn’t go anywhere. The firm just (wisely) opted not to be directly involved in professional-on-professional violence.

**We tried to listen but the recording is busted. We imagine it consisting of a lot of pissing and moaning by the ad hoc group about having to pay the fees of an estate collective that its members, by funding a DIP, brought into existence.

***Three equipment and assets financiers — TCS Equipment Finance, Ansley Park Capital, Citizens Asset Finance — were also able to cut a better deal for themselves. They’ll take home ~71-85% through takeback debt when it’s all done and dusted.

****K&E’s private equity partners may want to take notes on this kind and gentle approach.

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⚡Update 2: Lodging Enterprises, LLC⚡️

Source: Getty Images

Speaking of overcoming the odds, we’ve been following the slow-moving train that is Lodging Enterprises, LLC (the “debtor”) ever since it filed in the District of Kansas (Judge Somers) over a year ago in June ‘24.

💥What's the Deal(EO)?💥

💥New Chapter 11 Bankruptcy - Lodging Enterprises LLC💥

If you don’t recall — and, in fairness, why would you? — the debtor owns and operates 40 Wyndham-branded hotels and 27 restaurants (collectively, the “portfolio”)* and when we last checked in back in February, after eight months in bankruptcy, the debtor was still operating on an interim cash management order (its 6th), an interim management services order (its 5th),* and an interim cash collateral order (its 4th).

In some ways not much has changed: the debtor is now on its sixth cash collateral order and seventh interim management services order.

Source: GIPHY

But the debtor finally knocked loose a few pieces that ought to take them through an effective date.

In April, the court approved the debtor’s settlement with its prepetition secured parties — lender UBS Commercial Mortgage Trust 2019-C18, Commercial Mortgage Pass-Through Certificates, Series 2019-C18 (“UBS”), master servicer Wilmington Trust NA, and “special servicer” Rialto Capital Advisors LLC — which had been the logjam to getting anything going** and which provided:

📍 A sale of the 40 hotel and 27 restaurant portfolio, and the retention of CBRE, Inc. (“CBRE”) as the real-estate broker for that sale.***

📍The prepetition secured parties’ consent to the debtor’s use of cash collateral through the resolution of the chapter 11 case, including the marketing and sale process (which made Johnny briefly ponder why there’s still an interim cash collateral order, but he didn’t linger on it).

📍The waiver by the prepetition secured parties of over $30mm in asserted default interest, yield maintenance premiums, and “… other fees and charges …,” and the fixing of their claim at ~$113.2mm + accrued and unpaid (and, obvi, undisputed) interests, fees, etc.

📍First, the use of any sale proceeds to satisfy priority, administrative, and non-prepetition secured party secured claims (collectively, “senior claims”), and second, a split of any remaining proceeds 10% to GUCs and 90% to the prepetition secured parties until all GUC claims are paid in full, and third, once all of the foregoing claims are paid in full, an additional $3mm kicker — or, if less, whatever cash is left over — to the prepetition secured parties.

📍Agreement that the prepetition secured parties could credit bid, provided that, if they do and win, the debtor can use their cash collateral to fund payments to senior claims and GUCs.

📍Agreement that the debtor’s equity owners, including guarantor Tom Vukota, could try to raise capital and refinance the prepetition secured parties at the settlement-agreed value. Like that’d ever happen.

📍Finally and naturally, releases all around.

Honestly, pretty damn good deal, but, knowing the debtor had already been sitting in bankruptcy for about a year at that point, what … um … do you think came of the sale process?

Source: GIPHY

Because, of all possibilities, it was the most logical and foreseeable. Lotta time and effort went into landing at it though:

Source: Docket 591

Of. Course. 🙄. A credit bid. And on October 21, 2025, the court approved the foreclosure sale. Over the objection of the US trustee (the “UST”), which argued the debtor should’ve opted for the American Hotel Income Properties REIT Inc.’s $5mm lower cash offer but offered no argument as to how the debtor would’ve effectuated that outcome without the prepetition secured parties’ consent.

Source: GIPHY

Which, obviously, it wouldn’t be giving. Amateur hour over in Kansas, y’all, and definitely worth the taxpayers’ hard-earned money, 🖕.

With the sale largely out of the way — it just has to close — all that’s left to do is bury the corpse. On October 16, 2025, the debtor got out its shovel and filed an amended disclosure statement (the “DS”) and liquidating chapter 11 plan, which, compared to prior September versions, baked in the credit bid results and mechanics and, based on the liquidation analysis, will pay 100% of the debtor’s ~$1.7mm in GUC claims.

At that same October 21 hearing, the court conditionally approved the DS, overruling yet more stupid UST objections (here and here).

And sorry if it sounds like we’re just beating on the UST. But we kind of are, and it deserves the treatment. Like did the UST even bother to pick up the phone and call the debtor’s counsel, Hunton Andrews Kurth LLP (“HAK”) (Timothy “Tad” Davidson II, Brandon Bell, Kaleb Bailey, Jason Harbour), before dropping in this piece of sh*t “point”?

Source: Docket 605

Because that seems like a drafting issue at best, and there are easier ways to address.

Just sayin’.

Anyway. Confirmation is scheduled for November 20, 2025 at 1:30pm CT, and given the recoveries, we don’t really foresee anything getting in the way of it (other than having to get the persistent UST’s next dumb objection overruled again), so we’ll go ahead and say congrats to the debtor and its advisors.****

*It used to be 44 hotels, but the court already authorized the debtor to sell four of ‘em for a combined ~$8.8mm.

**Overruling, in the process, objections filed by the US trustee, the official committee of unsecured creditors (the “UCC”), and Wyndham-franchisors Super 8 Worldwide, Inc., Travelodge Hotels, Inc., and Baymont Franchise Systems, Inc. TBH, the objections all kinda sucked — copy-paste sub rosa plan, absolute priority, etc. arguments, plus general resentment toward Mr. Vukota for not being a primary obligor on the prepetition secured parties’ debt (and benefiting, as a guarantor, from any future paydown of their debt). The debtor’s reply explained that’s … uh … how guarantees work and otherwise did a respectable job of putting the arguments where they belong: in the garbage bin.

***Following up on its recent “success,” the UCC objected to the retention on the basis that CBRE shouldn’t get a fee if the prepetition secured parties credit bid and win. Folks hashed the dispute out, and if that happened … which it, uh, did … CBRE agreed to a break-up fee not to exceed $200k.

****Including the aforementioned HAK, Siegfried & Bingham PC (Jonathan Margolies), Ankura Consulting Group LLC (Bryan Gaston), and CRO-provider VCM Global Asset Management, Inc. (Tom Wenner).

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📚Resources📚

We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.

We’re nerds so we’re actually a bit excited about Andrew Ross Sorkin’s newest title, “1929: Inside the Greatest Crash in Wall Street History and How It Shattered a Nation,” which comes out on October 14, 2025. You can preorder it now.

Another one that is getting a lot of attention that we want to dig in to is “If Anyone Builds it, Everyone Dies: Why Superhuman AI Would Kill Us All” by Eliezer Yudkowsky and Nate Soares. It’s available now.

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📤 Notice📤

Ryan Blaine Bennett (Partner & Chair of Restructuring Group) joined Willkie Farr & Gallagher LLP from Kirkland & Ellis LLP.

🍾Congratulations to…🍾

AlixPartners, LLP (David MacGreevey) for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in the Spirit Aviation Holdings, Inc. chapter 22 bankruptcy cases.

Dundon Advisors (Eric Reubel) for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in the Elite Equipment Leasing LLC chapter 11 bankruptcy cases.

Dykema Gossett PLLC (William Hotze, Nicholas Zugaro, Dominique Douglas) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Razzoo’s, Inc. chapter 11 bankruptcy cases.

GlassRatner Advisory & Capital Group, LLC (Seth Freeman) for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in the Rizo López Foods, Inc. chapter 11 bankruptcy cases.

Herbert Smith Freehills Kramer (US) LLP (Adam Rogoff, Rachael Ringer, Megan Wasson, Andrew Citron) and Vartabedian Hester & Haynes LLP (Martin Sosland, Jeff Prostok, Candice Carson) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Omnicare, LLC chapter 11 bankruptcy cases.

Jefferies LLC (Leon Szlezinger) for securing the investment banker mandate on behalf of the official committee of unsecured creditors in the Spirit Aviation Holdings, Inc. chapter 22 bankruptcy cases.