Education technology company Anthology used chapter 11 to strip the bulk of its assets and reorganize around its Teaching & Learning division.
After selling off its Enterprise Operations, Anthology Reach and Student Success platforms, the company implemented a debt-for-equity swap of its prepetition super-priority debt, giving lenders control of T&L.
Judge Alfredo Perez of the US Bankruptcy Court for the Southern District of Texas confirmed the plan at a Dec. 12 hearing. The plan took effect Feb 27.
The road to chapter 11
Prior to the chapter 11 reorganization, Anthology operated in four segments:
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T&L, which operates flagship product Blackboard Learn, a digital course design, assessment, grading and performance analysis service. T&L was by far the company’s biggest earner, bringing in more than half of FY 2025 revenue at $240mn.
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Enterprise Operations, operator of Anthology Student, a software platform for managing day-to-day functions of academic institutions.
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Anthology Reach, a provider of student enrollment, retention, advising, and career advancement services.
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Student Success, giving students coaching services.
Anthology, owned at the time by Veritas Capital Fund, blamed its troubles on new competitors, declining college enrollment, reduced government subsidies and an aging product portfolio. Revenue declined by $80mn from FY 2023 to FY 2025 and EBITDA dropped from $33mn in FY 2023 to $4mn in FY 2025, and efforts to raise prices were met with “intense backlash” from customers.
The company took on its pre-bankruptcy debt load in 2024 through a liability management transaction, when its lenders repurchased nearly all of its first-lien debt and the company issued the lenders a new super-priority first-lien revolver and four-tranche term loan totaling $1.29bn in debt.
That restructuring was not enough to fix the company’s financial situation, and Anthology skipped interest payments in late 2024 and early 2025 amid a failed sale process. Talks with first- and second-lien lenders yielded a restructuring support agreement with an ad hoc group holding 86% of the tranche A term loan debt and 68% of tranche B.
RSA in hand, Anthology filed for chapter 11 on Sept. 29.
The plan
The RSA set up a dual-track sale and restructuring process for the debtor. The company aimed to sell Enterprise Operations division, with Ellucian Co. signed on as stalking horse bidder, as well as the Lifecycle Engagement and Student Success divisions, with a stalking horse bid from Encoura.
Anthology would then reorganize around the T&L, with super-priority first-out lenders to receive 99% of the equity in the reorganized company, while super-priority second-out lenders would get the remaining 1% of common equity and 1% of new preferred equity. The lenders also had the option to drop their equity payout and instead share $59.4mn in cash for the super-priority first outs and $2mn for the super-priority second outs.
The company also set up a $35mn equity rights offering and a $15mn direct equity investment from the ad hoc group and aimed to raise another $22.7mn in equity financing.
The supporting lenders agreed to fund $100mn in debtor-in-possession financing to fund the case in exchange for a 9.5% backstop premium. The DIP was half new money and half a roll-up of prepetition debt. Judge Perez approved the DIP on a final basis at a Nov. 12 hearing after the company reached a settlement that brought excluded lender Vector Investment Partners into the financing.
Later that month, the court approved the sales of the Enterprise Operations business to Ellucian for $70mn and the sale of Lifecycle Engagement and Student Success for $50mn.
The unsecured creditors committee objected to the plan in December, unhappy with the lack of payout to unsecured creditors, owed $20.8mn. In the following weeks, Anthology and the UCC settled the dispute. The deal amended the plan to create a convenience class of unsecured creditors, setting aside $1.75mn to give creditors payment in full on claims up to $10,000 and a recovery of 15% up to $100,000. The plan then put another $1.75mn in cash to pay general unsecured creditors, who would also receive half of the first $6.5mn in net cash recoveries from certain litigation.
Judge Perez confirmed the plan at a Jan. 23 hearing. The plan took effect on Feb 27.
Related documents:
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Pat Holohan
patrick.holohan@levfininsights.com
+1 917 654 0337
