🐶New Chapter 11 Bankruptcy Filing - Wag! Group Co. ($PET)🐶
"Uber for Dogs" company takes a sidewalk dump on public shareholders.
On July 21, 2025, San Francisco-based Wag! Group Co. ($PET)(the “company” or “Wag!”), and six affiliates (together with the company, the “debtors”) — the “Uber for Dogs” with a pet insurance business — filed extremely straight-forward and completely-unsurprising chapter 11 bankruptcy cases in the District of Delaware (Judge Horan). The TL;DR: the proposed-and-already-solicited-and-100%-accepted prepackaged plan of reorganization will effectively delouse the Nasdaq in what amounts to a go-private debt-for-equity transaction that hands the keys over to the company’s secured lender, Retriever LLC (“Retreiver”).* All general unsecured creditors, except for a contingent litigation claimant, will be paid in full, while equity holders will be 🍩ed.
Taking a step back, we first covered Wag! earlier this summer as the company was scrambling to conduct a BofA Securities (“BofA”)-led strategic review to address its $20mm of debt (now $16mm) due August 9, 2025 …
… and again, last week when the company sold off its “Furscription” pharmacy business for $5mm, which was … *checks notes* … not nearly enough to pay off said debt. As we noted last week, the announcement of the Furscription asset sale also revealed that Wag! had completed its strategic review process and come up empty-handed:
The first day declaration gave us more details about the company’s failed efforts to sell itself over the course of the last year: BofA found no takers among the sixteen parties it contacted. Three of those parties submitted non-binding IOIs, but all dropped out after digging into Wag!’s business. Refinancing efforts, ongoing since the beginning of ’24 with the support of Arc Capital Markets, also left Wag! chasing its own tail. The bottom line, in case you didn’t bother to click those two links 👆 and review prior coverage, is that this business, like most deSPACs,** is a massive pile of dogsh*t — in this case, quite literally — and only Retriever showed any interest in it whatsoever (synergies!).
Wag! blamed COVID-19 for its demise, although dog-walking and pet-sitting services, the part of the business impacted by less travel and more remote work, make up less than a third of Wag!’s business, 🤷♀️. Debtors’ counsel, Michael Nestor of the Young Conaway Stargatt & Taylor LLP firm, when pressed a little on this point by Judge Horan at the first day hearing, also noted that the company had strained under the debt initially raised from Blue Torch Finance, LLC (“Blue Torch”) in conjunction with the ’22 de-SPAC transaction. In April Blue Torch be like ✌️ and ditched its loan to Retriever (at what we have to assume was a massive haircut), but the company still had to contend with a a minimum liquidity covenant and the upcoming maturity. This bankruptcy, Mr. Nestor said, will enable the company to benefit from a cleaner balance sheet.
But the proposed plan won’t reduce the company’s debt.
To fund this short case and satisfy working capital needs, Retriever has agreed to provide the debtors a $6.5mm new money DIP ($4mm interim) and consented to the use of its cash collateral. The DIP carries a 15% interest rate, a 2% exit fee, and a 1% commitment fee.
The prepackaged plan provides for:
📍100% of the reorganized equity and $5mm principal amount of new notes to Retriever in exchange for the (original Blue Torch) loan.
📍An exit facility of up to $18.3mm, inclusive of the $5mm of new notes issued to Retriever above, the $6.8mm DIP (incl. fees) and the remainder as new financing (all together, the “New Notes”). The New Notes will be a senior secured term loan, maturing seven years from close and bearing a fixed 15% PIK interest rate. The New Notes also come with warrants and a 25% prepayment penalty.
📍All general unsecured claims to be paid in full — including, seemingly, one held by Latham & Watkins LLP (a top five!) — except for a single disputed litigation claim. The company entered chapter 11 with $7mm of general unsecured obligations and $40k owed to Uncle Sam under the PPP.
📍No recovery for equity holders — a group that includes notable Silicon Valley venture capital firms General Catalyst Group and Greylock Capital and sage-like Naval Ravikant. We suppose Mr. Ravikant lacked clairvoyance to realize that he should have dumped this stock as soon as humanly possible after the lock-up period.
So to sum up, Wag! will go in with $16.3mm of debt at 9% and come out with $18.3mm at 15%, 🤔. But they’ll be a new owner!
New ownership begs an obvious question: what will be the fate of the company’s management team, including Chief Barketing Officer Ollie and Influencer-in-Residence, Mötley?!?
Sadly, folks, neither appear on the short-list for executive bonuses or retained employment with the reorganized debtors (in contrast to founder and CEO Alex Stone who will have his employment agreement assumed).
A DIP milestone requires confirmation of the proposed plan by August 29, 2025.
The debtors are represented by Young Conaway Stargatt & Taylor, LLP as legal counsel (Michael Nestor, Kara Hammond Coyle, Shella Borovinskaya, Kristin McElroy, Brynna Gaffney, Sarah Gawrysiak, Joshua Hall), and Portage Point Partners LLC (Steven Shenker, Scott Canna, Cosmo Giancaspro) as financial advisor. Retriever is represented by The Tuhey Law Firm LLC (John Tuhey) and Honigman LLP (Glenn Walter).
*Recall that Retriever is an affiliate of Merrick Ventures, a Florida-based private equity firm focused on technology companies including … as we pointed out previously … a company called Spot Pet Insurance which would seem to suggest this is a bit of a roll-up.
**At the first day hearing, Judge Horan basically acknowledged the fact that a lot of deSPACs don’t, uh, seem to be such high quality companies, lol.
Company Professionals:
Legal: Young Conaway Stargatt & Taylor LLP (Michael Nestor, Kara Hammond Coyle, Shella Borovinskaya, Kristin McElroy, Brynna Gaffney, Sarah Gawrysiak)
Restructuring Advisor: Portage Point Partners (Steven Shenker, Scott Canna)
Claims Agent: Epiq (Click here for free docket access)
Other Parties in Interest:
Retriever LLC
Legal: The Tuhey Law Firm LLC (John Tuhey) and Honigman LLP (Glenn Walter)