💥New Chapter 11 Bankruptcy Filing - WW International, Inc.💥
Iconic weight loss brand goes on its own "Delaware diet"
On May 5, 2025, NYC-based WW International, Inc. ($WW) aka Weight Watchers and seven affiliates (collectively, the “debtors” and together with their non-debtor affiliates, the “company”) filed prepackaged chapter 11 bankruptcy cases in the District of Delaware (Judge Goldblatt). The bankruptcy was a loooooooong time coming, and we’ve already weighed y’all down with heavy coverage going as far back as March ‘23 and continuing here, here, here, here, here, and here until our last refresh in November ‘24:
But even without those pieces, c’mon, y’all already know this company — it’s the OG of shedding pounds, and at some point, no less than five members of your family, all 40+ years old, tried it.
Heck, if you take CFO Felicia DellaFortuna at her word, this is “the global leader in science-backed weight management.” But, LOL, in ‘25, we be like …
… on that claim because, while the company’s subscriber count plummeted another 12.2% to ~3.3mm at the end of FY24 (~1.1mm down from ‘20’s 4.4mm high) and share prices bottomed out …
… other, seemingly-pretty-sciency folks over at Novo Nordisk A/S ($NVO) and Eli Lilly ($LLY) were leading the charge in getting the populace hooked on GLP-1s.
One of those patients? Former debtor board member, Oprah, who unnecessarily shouted out she was on ‘em in December ‘23 before “stepping down” from the board in March ‘24. And the list of celebs on the GLP-1 train these days is only gettin’ longer.
But miracle drugs aren’t the company’s only problem. It also has to compete with free and low-cost … Instagrammers, TikTokers, and YouTubers in the “behavior change and community support” marketplace. Sadly, the company is serious on that. These people are filming themselves with iPhones and the “global leader” didn’t think of paying off a few to produce good, entertaining content for its members.
In any event, drugs are relatively cheap, health content is basically free, and the all-in damage has been substantial. FY24 revenue dropped 11.6% YoY from $889.6mm to $785.9mm and, the company left ‘24 with a $345.7mm net loss, which ain’t great when your petition date cap stack looks like this:
With the caveat that the revolver wasn’t so bad at the start of ‘25. The debtors, clearly seeing the writing on the wall, fully drew down on it in January to “to provide financial flexibility as the Company headed into restructuring discussions” and, more honestly, hold the lenders’ cash hostage.
But the hostage strategy worked, and the debtors have a sure-fire, 1.5-month plan to get financially shredded in BK:* a restructuring support agreement (the “RSA”) supported by holders of ~79% of the prepetition credit facility debt and 74% of the senior secured notes (the “ad hoc group”).**
Because this is the company’s first trip through 11, it’s a tried-and-true balance sheet (aka BS) restructuring that will extinguish that debt ☝️ (and $50mm in annual interest expense) in exchange for $465mm in takeback debt (in the form of loans and notes) and reorg equity.*** $38mm worth of GUCs will pass through unimpaired, and uniquely, existing equity stands to get something too. To provide a little context, here’s Simpson Thacher & Bartlett LLP’s Elisha Graff, on behalf of the debtors, at the May 8, 2025 first day hearing:
“Your Honor may have noticed that the PJT valuation … shows an enterprise valuation ranging from $500mm to $900mm at the top end, with a midpoint of $700mm, thus demonstrating that existing equity is out of the money by about $900mm. Despite that, the first lien claimants agreed to essentially reallocate 9% of equity, a significant portion, to existing equity holders in order to facilitate a smooth chapter 11 process and a very orderly and quick restructuring, which ultimately, we believe your Honor, will benefit all stakeholders.”
That “smooth chapter 11 process”? It means unequivocally, absolutely zero f*ckery and firmly sticking to the RSA’s milestones.**** Back to Mr. Graff:
“To be clear this recovery is conditioned, as your Honor might expect, on the debtors’ ability to comply with the case milestones contained in the restructuring support agreement. And if the debtors are unable, for any reason, to comply with those milestones then the recovery to existing equity holders is subject to revocation.”
Given the circumstances — funded debt “taking one for the team” — Judge Horan found the first-day hearing “exceptionally easy” and scheduled the second-day for June 4, 2025 at 10am ET. That will be followed by a combined approval hearing on the disclosure statement and plan on June 17, 2025 at 2pm ET,***** which’ll give the debtors just shy of a week to get to the RSA-mandated, equity-tip-giving June 23, 2025 effective date.
The debtors are represented by Simpson Thacher & Bartlett LLP (Elisha Graff, Mose Fink, Rachael Foust, Zachary Weiner, Shin Hoo Lee, Alan Turner) and Young Conaway Stargatt & Taylor, LLP (Edmon Morton, Sean Beach, Shella Borovinskaya, Carol Thompson, Roger Sharp) as legal counsel, Alvarez & Marsal LLC as financial advisor, and PJT Partners LP ($PJT) as investment banker. The ad hoc group is represented by Gibson, Dunn & Crutcher LLP (Scott Greenberg, Matthew Williams, Jason Goldstein, Tommy Scheffer, Josh Michael Berland, Benjamin Spock, Kevin Liang, Adeola Adeyosoye, Lauren Hernandez) and Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, Timothy Cairns) as legal counsel and Houlihan Lokey Capital, Inc. ($HLI) as financial advisor. Bank of America, N.A. ($BAC), as agent under the prepetition credit agreement, is represented by Morgan Lewis & Bockius LLP (Jennifer Feldshur, David Shim, Jody Barillare) as legal counsel. The Bank of New York Mellon ($BK), as secured notes trustee, is represented by Reed Smith LLP (Luke Sizemore, Jared Roach, Cameron Capp) as legal counsel.******
*”Financially” being very much intentional. The business is still busted — like, who is using their services? — so there’s a strong possibility we’ll see y’all in a year or two for the sale or liquidation.
**The ad hoc group’s 2019 statement features 45 different holders and includes classic, repeat players like Sound Point Capital Management LP, LCM Asset Management LLC, Blue Owl Liquid Credit Advisors LLC, and Angelo, Gordon & Co., LP.
***The debtors will issue the takeback debt in the form of new term loans and new notes with the new term loans carrying an SOFR+6.8% interest rate and the new notes carrying a 10.25% interest rate. Both the new term loans and new notes mature in five years following the effective date and is also redeemable at 100% for the first $200mm and 102% for any amount in excess of $200mm. The redemption price falls to 101% by the second anniversary of the effective date and 100% from the third anniversary.
****Equity’s recovery is structured as a straight-up gift, so it isn’t voting on the plan.
*****The debtors are also playing it “conservative” through opt-in third party releases to hopefully avoid any confirmation drama.
******The current budget reflects $20.8mm in projected professional fees over the course of the cases.
Company Professionals:
Legal: Simpson Thacher & Bartlett LLP (Elisha Graff, Mose Fink, Rachael Foust, Zachary Weiner, Shin Hoo Lee, Alan Turner) and Young Conaway Stargatt & Taylor, LLP (Edmon Morton, Sean Beach, Shella Borovinskaya, Carol Thompson, Roger Sharp)
Financial Advisor: Alvarez & Marsal LLC and Matthews South
Investment Banker: PJT Partners LP
Claims Agent: Kroll (Click here for free docket access)
Other Parties in Interest:
First Lien Agent: Bank of America NA
Legal: Morgan Lewis & Bockius LLP (Jennifer Feldshur, David Shim, Jody Barillare)
Secured Notes Indenture Trustee: The Bank of New York Mellon
Legal: Reed Smith LLP (Luke Sizemore, Jared roach, Cameron Capp)
Ad Hoc Group of Prepetition Term Loan Lenders and Prepetition Noteholders
Legal: Gibson, Dunn & Crutcher LLP (Scott Greenberg, Matthew Williams, Jason Goldstein, Tommy Scheffer, Josh Michael Berland, Benjamin Spock, Kevin Liang, Adeola Adeyosoye, Lauren Hernandez) and Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, Timothy Cairns)
Financial Advisor: Houlihan Lokey Capital, Inc.