2U has completed its prepackaged Chapter 11 reorganization and now operates under a confirmed, creditor-owned capital structure rather than pursuing a sale or liquidation. The path began with its July 25, 2024 filing after post-pandemic normalization reduced demand for online degree programs, entry-level technology boot camps weakened, university partners delayed launches and renewals, and constrained capital markets left the company facing a maturity wall. Degree-program enrollments had fallen from 233,635 in 2022 to 194,574 in 2023. At filing, the first-day declarationDkt. 3 reflected approximately $944.8 million of funded obligations: a $374.3 million first-lien term loan, a $40 million first-lien revolver, $380 million of 2.25% convertible notes due May 2025, and $147 million of 4.50% convertible notes due 2030. The approaching 2025 notes maturity also carried January 2025 springing-acceleration risk for the first-lien facilities, sharpening the need for a negotiated balance-sheet solution.
The company entered court with a prepackaged deal intended to preserve the education-platform business and its university relationships while addressing leverage on an expedited timetable. A $64 million junior-lien DIP facility and cash-collateral package supplied the liquidity bridge through confirmation. The second amended prepackaged planDkt. 90 organized claims and interests into nine classes, with first-lien claims and unsecured note claims as the principal impaired voting classes. First-lien lenders were to receive amended and restated loans, while unsecured noteholders received rights to participate in a fully backstopped $46.5 million equity rights offering and new common interests; general unsecured claims remained unimpaired. The plan also contemplated assumption of most executory contracts, including a tailored framework for university partner agreements where counterparties had asserted prepetition breach concerns.
The court entered the confirmation orderDkt. 176 on September 9, 2024, approving the disclosure statement, confirming the plan, authorizing the restructuring transactions and new governance, and providing for discharge on effectiveness. The plan became effective on September 13, approximately 50 days after the petition date. Unsecured noteholders emerged with approximately 90% of the reorganized equity, funded debt fell from roughly $945 million to approximately $459 million, and the fifth amended plan supplementDkt. 180 documents a $414.3 million initial exit term loan funded through a cashless roll of prepetition first-lien debt. With confirmation, effectiveness, and exit financing accomplished, the restructuring is in its post-emergence implementation phase under the exit facility rather than an active sale process or unresolved confirmation contest.
