Anthology: EdTech Giant's $1.6B Debt Unwound in 4-Month Chapter 11

Anthology's chapter 11 filing on September 29, 2025, followed a consolidation strategy built around acquisitions in education technology. The company, formed in July 2020 when Veritas Capital combined Campus Management, Campus Labs, and iModules, expanded with the October 2021 acquisition of Blackboard, a learning management system provider. That merger created a higher education software platform and left the combined entity with approximately $1.7 billion in debt. Revenue declined and integration costs increased in the years that followed.

The pre-arranged restructuring, described in the First Day Declaration, followed the 2021 merger and the company's capital structure. Annual interest payments consumed 41% of revenue—approximately $185 million on a revenue base of roughly $450 million. EBITDA fell from approximately $33 million in fiscal year 2023 to $4 million by fiscal year 2025. The 28 affiliated debtors entered chapter 11 with a dual-track strategy: sell two of three business segments through 363 sales while reorganizing the core Teaching & Learning division to emerge as a debt-free, standalone company under the Blackboard brand.

Court	U.S. Bankruptcy Court, Northern District of Texas (Dallas Division)
Case Number	25-90498
Judge	Hon. Alfredo R. Perez
Petition Date	September 29, 2025
Debtor(s)	Anthology Inc. and 27 affiliated entities
Total Funded Debt	~$1.625 billion
DIP Facility	$100M ($50M new money, $50M roll-up)
Asset Sales	Ellucian (~$70M), Encoura (~$50M)
Retained Business	Teaching & Learning (Blackboard LMS, Ally, Illuminate)
Target Emergence	January 31, 2026
Post-Emergence Brand	Blackboard Inc.
New Majority Owners	Oaktree Capital Management, Nexus Capital Management

The Blackboard Merger and Capital Structure

Company Formation and Consolidation.

Anthology's origins trace to Veritas Capital's strategy to create a higher education software platform through consolidation. The private equity firm combined Campus Management Corporation, Campus Labs, and iModules Software in July 2020, forming Anthology as a provider of administrative and engagement tools for colleges and universities. Leeds Equity Partners and Providence Equity Partners held minority stakes in the combined entity.

The September 2021 announcement that Anthology would merge with Blackboard—backed by Providence Equity Partners—was part of this consolidation strategy. Blackboard's learning management system was a platform in higher education, and the merger promised to create a software suite covering student recruitment through graduation and alumni engagement. The combined company would serve thousands of higher education institutions worldwide with products spanning student information systems, learning management, enrollment marketing, and institutional analytics.

The merger closed on October 25, 2021. The combined entity emerged with approximately $1.7 billion in total funded debt.

Prepetition Capital Structure.

The company's funded debt consisted of three primary tranches:

Pre-Petition Capital Structure

Annual interest expense of approximately $185 million consumed 41% of revenue.

With fiscal year 2025 EBITDA of approximately $4 million against $1.625 billion in funded debt, the company's debt-to-EBITDA ratio exceeded 400x. Even using the fiscal year 2023 EBITDA figure of approximately $33 million, leverage exceeded 49x.

Financial Deterioration and Defaults

Revenue and Margin Decline.

Industry analysis documents the financial deterioration preceding the filing. Annual revenue declined nearly $80 million over the two years preceding the filing, dropping from approximately $530 million in fiscal year 2023 to roughly $450 million in fiscal year 2025.

Financial Performance Deterioration

From approximately $33 million in fiscal year 2023, adjusted EBITDA fell to roughly $15 million the following year before declining to $4 million in fiscal year 2025—an 88% reduction over two years. Reports cited post-merger integration costs, portfolio modernization needs, and mispriced fixed-cost implementation contracts as contributors to margin compression.

Reports cited enrollment declines and the shift toward cloud-native solutions as pressures on institutional budgets and legacy platforms.

Liquidity Events and Default.

In December 2024, Anthology skipped interest payments on the Second Lien Credit Agreement. The default preceded negotiations with creditors while the company continued operating.

By March 2025, Anthology skipped interest payments on the 1L Superpriority Credit Agreement and drew the full $100 million available under its Revolving Credit Facility—only to discover that two lenders failed to honor their funding commitments, shorting the company $18.5 million in expected liquidity. This failure by lenders to fund their commitments under the credit agreement would later be preserved as potential litigation claims in the bankruptcy proceedings.

Throughout spring 2025, management negotiated with the Ad Hoc Group of lenders and Veritas Capital, the majority equity holder. These discussions resulted in a Restructuring Support Agreement that established the framework for a pre-arranged chapter 11 filing. The RSA set a dual-track approach—asset sales combined with reorganization—and identified stalking horse bidders for the non-core business segments before any bankruptcy petition was filed.

Pre-Arranged Restructuring Structure

The Restructuring Support Agreement Framework.

The RSA executed prior to filing established the key parameters for Anthology's chapter 11 case. Parties to the agreement included the Ad Hoc Group of prepetition superpriority lenders and Veritas Capital, which held the majority equity position in the pre-bankruptcy corporate structure. The agreement provided consensual treatment terms for secured creditors, identified purchasers for non-core assets, and established milestone deadlines targeting a 3-4 month path from petition to emergence.

Dual-Track Strategy Design.

Anthology's restructuring employed a dual-track approach that combined 363 asset sales with plan reorganization:

Track 1: 363 Asset Sales

• Enterprise Operations segment sold to Ellucian Company LLC for approximately $70 million cash plus assumption of liabilities
• Lifecycle Engagement & Student Success segment sold to Encoura LE LLC for approximately $50 million cash plus assumption of liabilities
• Total sale proceeds of approximately $120 million contributed to reorganized debtor funding

Track 2: Plan Reorganization

• Teaching & Learning business segment retained by reorganized debtors
• Core products include Blackboard LMS, Ally accessibility tools, Illuminate data visualization, and Institutional Effectiveness solutions
• Emergence with debt-free balance sheet funded by sale proceeds and new money investments
• Rights offering provides up to $72.7 million in new capital from reorganized entity equity

DIP Financing and First Day Relief

$100 Million DIP Facility Structure.

The DIP Financing Motion filed on the petition date sought approval of a $100 million debtor-in-possession credit facility. The structure combined new money lending with a roll-up of prepetition obligations.

DIP Financing Terms

The $50 million new money component provided operating liquidity during the chapter 11 process. The $50 million roll-up converted prepetition superpriority claims into DIP obligations, priming other prepetition creditors and securing elevated priority for participating lenders. The 9.50% backstop premium—paid in kind—compensated lenders for committing to fund regardless of whether the company ultimately needed to draw the full facility.

The Interim DIP Order entered on September 30, 2025—one day after the petition date—authorized $10 million in immediate borrowings.

Not all prepetition lenders supported the DIP structure. Vector Capital Credit Opportunity Master Fund LP and Vector Investment Partners I LLC filed objections arguing that the roll-up mechanism unfairly excluded them and violated provisions of the prepetition credit agreement. The court entered the Final DIP Order on November 12, 2025. The Vector entities contended that the DIP facility improperly advantaged certain lenders at the expense of others holding equivalent prepetition claims. The court resolved this dispute by permitting Vector to participate: the entities could provide a small portion of the new money commitment and receive a corresponding roll-up of their prepetition claims. Separately, prepetition litigation by Astra Acquisition Corp. against Vector Capital entities—concerning alleged breach of the loan agreement—was preserved for potential prosecution.

Critical First Day Orders.

Beyond DIP financing, the first day hearing on September 30, 2025, addressed operational motions:

• Cash Management: Authority to continue using existing bank accounts, intercompany arrangements, and cash management systems
• Employee Wages and Benefits: Permission to pay prepetition wages, salaries, health insurance premiums, and other employee obligations
• Critical Vendors: Authority to pay prepetition amounts owed to vendors essential to ongoing operations
• Utilities: Adequate assurance procedures to prevent utility disconnection during the case
• Insurance Programs: Continuation of existing insurance policies, including directors' and officers' coverage

These orders allowed Anthology to continue operating during the chapter 11 process.

363 Asset Sale Process

Marketing and Competitive Bidding.

The asset sale process included pre-petition preparation and post-petition market testing. PJT Partners, Anthology's investment banker, conducted a 5-month pre-petition marketing process that contacted potential strategic and financial acquirers for various asset combinations. This process identified Ellucian and Encoura as bidders for the Enterprise Operations and Lifecycle Engagement segments, respectively.

Following the petition date, the court-approved bidding procedures established a nearly 2-month post-petition market check. This period allowed any interested parties to conduct diligence, submit competing bids, and potentially top the stalking horse offers. The Bidding Procedures Order, entered November 12, 2025, established the auction rules and timeline.

No competing qualified bids emerged for either asset package.

Ellucian Acquisition of Enterprise Operations.

Ellucian Company LLC emerged as the successful bidder for Anthology's Enterprise Operations segment. The acquisition, valued at approximately $70 million in cash plus assumption of specified liabilities, included:

• Anthology Student: Student information system providing enrollment management, academic records, and student services functionality
• Anthology Finance & HCM: Enterprise resource planning and human capital management solutions for institutional administration
• Student Verification Services: Enrollment and degree verification services

Encoura Acquisition of Lifecycle Engagement.

Encoura LE LLC acquired the Lifecycle Engagement & Student Success segment for approximately $50 million in cash plus assumed liabilities. This transaction transferred:

• Encompass: Institutional planning and analytics platform
• Reach: Student recruitment and enrollment marketing tools
• Engage: Student engagement and communication platform
• Advance: Advancement and fundraising management
• Student Success: Retention and student support analytics

Contract Assumption and Counterparty Disputes.

The asset sales required assumption and assignment of numerous customer contracts, vendor agreements, and technology licenses. Multiple counterparties filed objections raising concerns about:

• Cure Amounts: Disputes over unpaid prepetition amounts requiring payment before assumption
• Adequate Assurance: Questions about whether purchasers could demonstrate ability to perform future contract obligations
• License Splitting: Concerns that software licenses could not properly transfer from Anthology to purchasers without licensor consent
• Non-Monetary Defaults: Allegations of breaches beyond simple payment failures

Objecting parties included Oracle America, Inc., various educational institutions (Smith Chason College, Passaic County Community College, Maine Community College System, HCI College, Northwest Nazarene University), and technology vendors (Trade Trading Company LLC, Mohawk College). The court resolved most objections through stipulations preserving counterparty rights while permitting the sales to close.

The sale hearing on November 21, 2025 approved both transactions. Judge Perez entered sale orders authorizing the transfers to Ellucian and Encoura, allowing closings and transition of the sold business lines.

Plan of Reorganization

Emergence Structure and New Ownership.

The Plan of Reorganization contemplates Anthology's Teaching & Learning segment emerging as a reorganized company operating under the Blackboard Inc. brand.

Post-emergence ownership transfers to Oaktree Capital Management and Nexus Capital Management, which will hold majority control of the reorganized company. These institutional investors—receiving equity through their prepetition secured claims and new money investments—replace Veritas Capital and its minority co-investors as the controlling shareholders.

The reorganized company's capital structure includes:

Post-Emergence Capital Structure

Emergence with zero funded debt eliminates interest expense. The company retains at least $25 million in cash to fund operations, with additional liquidity from the rights offering proceeds.

The reorganized entity's capitalization includes a rights offering providing up to $72.7 million in new capital. Eligible creditors in specified classes receive subscription rights to purchase New Preferred Equity, with the Ad Hoc Group providing a backstop commitment ensuring full subscription regardless of creditor participation levels. The Backstop Commitment Agreement, approved December 15, 2025, obligates the backstop parties to purchase any unsubscribed rights offering shares. In exchange for this commitment, backstop parties receive fees.

Creditor Treatment and Recovery Waterfall.

The plan establishes a waterfall distribution structure across Anthology's capital structure:

Creditor Treatment by Class

Recoveries differ by class. First Out creditors—holding approximately $520 million in claims—recover between 8.7% and 30.4% through a combination of cash, equity, and rights offering participation. Second Out creditors recover 0.3% to 0.5%. Second lien holders, general unsecured creditors, and equity interests receive nothing.

A convenience class permits creditors holding claims up to $10,000 to elect payment in full in cash, simplifying administration for small claims and eliminating the cost of issuing fractional equity positions to numerous small creditors.

Third-Party Release Objections.

The plan's third-party release provisions drew objections from both the Official Committee of Unsecured Creditors and the U.S. Trustee. These releases would extinguish claims that third parties—including creditors—might hold against non-debtor parties such as officers, directors, and certain prepetition lenders.

The UCC argued that third-party releases were inappropriate where general unsecured creditors receive no recovery. Without meaningful consideration flowing to released parties, the argument contended, creditors should not be compelled to surrender potential claims against non-debtors. The UCC characterized the releases as non-consensual and lacking the supporting contribution typically required to justify such provisions.

The U.S. Trustee's objection raised constitutional concerns in light of the Supreme Court's decision in Harrington v. Purdue Pharma L.P., which limited the circumstances under which bankruptcy courts may approve non-consensual third-party releases. The U.S. Trustee argued that the plan's exculpation provisions extended too broadly and that releases of non-debtor parties required either creditor consent or alternative justification.

In response to these objections, the plan was amended to require affirmative opt-in for third-party releases. Rather than presuming consent from creditors who fail to object, the amended plan requires creditors to affirmatively elect release participation. The opt-out deadline of January 20, 2026 coincides with the voting deadline, requiring creditors to make both decisions simultaneously. The Confirmation Order approved the plan on January 23, 2026.

Case Timeline and Confirmation Path

Key Case Milestones

The timeline runs from September 29, 2025 to the targeted January 31, 2026 effective date. The RSA set milestone deadlines, and asset sales and plan processes proceeded in parallel.

EdTech Industry Implications

Higher Education Market Pressures.

Anthology's filing occurred amid challenges in the higher education sector. Enrollment declines have pressured institutional budgets, reducing the funding available for technology investments.

The shift toward cloud-native solutions has also disrupted established EdTech vendors. Newer market entrants offer cloud-native platforms marketed as alternatives to legacy systems. Anthology's product portfolio, assembled through multiple acquisitions, included components built on varying technology architectures.

Private Equity-Backed Consolidation.

Anthology combined multiple platforms under private equity ownership. The 2021 Blackboard merger added $1.7 billion of funded debt, and interest expense reached 41% of revenue by fiscal year 2025. Industry observers have noted the case in discussions of leverage and consolidation in higher education software.

Market Concentration After the Sales.

The asset sales transferred SIS and ERP products to Ellucian and lifecycle engagement products to Encoura. Ellucian's acquisition covered Anthology Student, Finance & HCM, and Student Verification Services. For higher education leaders evaluating technology strategies, Anthology's bankruptcy has prompted guidance on vendor planning. Alternative solution providers published guidance for institutions evaluating options.

Professional Roster

Debtors' Professionals.

FTI Consulting's Heath C. Gray served as Chief Restructuring Officer. PJT Partners managed the asset sale marketing process and advised on capital structure matters.

Official Committee of Unsecured Creditors.

The UCC retained Herbert Smith Freehills Kramer and AlixPartners. The committee's objections to third-party releases resulted in plan amendments requiring affirmative creditor consent.

Other Key Parties.

Davis Polk represented the Ad Hoc Group of Prepetition Superpriority Lenders.

Tax Attributes and NOL Preservation

Anthology sought procedures to preserve tax attributes that could benefit the reorganized company. The debtors estimate approximately $864.1 million in Section 163(j) interest carryforwards—amounts that could offset future taxable income and reduce the reorganized company's tax obligations.

Preservation of these attributes requires avoiding an "ownership change" as defined under Internal Revenue Code Sections 382 and 383. The plan and related orders establish trading restrictions and notification procedures designed to prevent transfers that could trigger such a change.

Frequently Asked Questions

Why did Anthology file for chapter 11 bankruptcy?

Anthology filed due to a debt burden from the 2021 Blackboard merger. The company carried approximately $1.625 billion in funded debt while revenue declined from roughly $530 million to $450 million over two years. Annual interest payments of approximately $185 million consumed 41% of revenue, and EBITDA declined from $33 million to $4 million. The company skipped interest payments in December 2024 and March 2025 before entering a pre-arranged restructuring.

What happens to Blackboard products and services?

The Teaching & Learning segment—which includes Blackboard LMS, Ally accessibility tools, Illuminate data visualization, and Institutional Effectiveness solutions—remains with the reorganized company. The entity will emerge as "Blackboard Inc." under new ownership (Oaktree Capital Management and Nexus Capital Management) with zero funded debt. University customers using these products continue service under the reorganized company.

Who is buying Anthology's assets?

Ellucian Company LLC acquired the Enterprise Operations segment (student information systems, ERP, human capital management) for approximately $70 million. Encoura LE LLC acquired the Lifecycle Engagement & Student Success segment (enrollment marketing, student success analytics) for approximately $50 million. Both buyers were stalking horse bidders, and no competing qualified bids emerged.

What will creditors recover in the bankruptcy?

Recovery varies by class. Prepetition Superpriority First Out creditors ($520 million in claims) project 8.7% to 30.4% recovery through cash, equity, and rights offering participation. Prepetition Superpriority Second Out creditors ($665 million) project 0.3% to 0.5% recovery. Second lien holders, general unsecured creditors, and equity interests receive nothing. A convenience class permits small claims up to $10,000 to be paid in full.

How long will the bankruptcy take?

The pre-arranged restructuring targets a 3-4 month timeline. Anthology filed September 29, 2025, with a target plan effective date of January 31, 2026. The Restructuring Support Agreement with the Ad Hoc Group and Veritas Capital established milestone deadlines for the schedule.

What is the DIP financing structure?

The $100 million DIP facility consists of $50 million in new money loans and $50 million in rolled-up prepetition obligations. The Ad Hoc Group of Prepetition Superpriority Lenders provides the facility through agent Alter Domus (US) LLC. Interest accrues at 8.75% (Term Benchmark) with a 9.50% backstop premium paid in kind.

Why are third-party releases controversial in this case?

The Official Committee of Unsecured Creditors and U.S. Trustee objected to releases protecting non-debtor parties (officers, directors, certain lenders) from third-party claims. With general unsecured creditors receiving zero recovery, opponents argued creditors should not be forced to surrender potential claims without meaningful consideration. The plan was amended to require affirmative opt-in for third-party releases, consistent with concerns raised following the Supreme Court's Purdue Pharma decision.

How does this bankruptcy affect universities using Anthology products?

Impact varies by product line. Blackboard LMS customers continue with the reorganized entity under the same brand. Enterprise Operations customers (student information systems, ERP) transition to Ellucian following closing. Lifecycle Engagement customers transition to Encoura. The assumption and assignment process includes provisions for contract continuity and transition support.

What caused Anthology's financial distress?

Reports cited multiple factors: the 2021 Blackboard merger created $1.7 billion in debt; integration costs exceeded projections; higher education enrollment declines pressured customer budgets; competition from cloud-native platforms increased; and fixed-cost implementation contracts were mispriced, creating ongoing losses.

What tax benefits does the reorganized company retain?

The debtors estimate approximately $864.1 million in Section 163(j) interest carryforwards. The plan establishes procedures to preserve these attributes by avoiding an "ownership change" under IRC Sections 382 and 383. These carryforwards could reduce the reorganized company's future tax obligations.

Who is the claims agent for Anthology?

Stretto serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

Read more chapter 11 case research on the ElevenFlo blog.