2U files for Chapter 11 cases in U.S. Bankruptcy Court

2U announced that it has initiated a financial transaction. The company has entered into a restructuring support agreement, or RSA, with lenders and noteholders holding approximately 87% of its outstanding debt that will provide approximately $110M of new capital, reduce its debt by over 50% to approximately $459M, and extend the maturity date of its revolving and term loans to over two years following closing of the transaction. To implement the transaction, 2U and certain domestic subsidiaries filed voluntary “prepackaged” Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of New York. 2U expects to secure court approval of financing totaling $64M to further support the company’s business operations throughout the Chapter 11 process. The company expects to complete the Chapter 11 process quickly, by the end of September, if not sooner. 2U has filed a number of customary motions with the court to ensure that its operations continue as usual while it implements this transaction. All programs will proceed as planned with no impact or disruption to learners as a result of this process, and 2U will continue providing all services for partners and students. Additionally, the RSA contemplates that payments to vendors will continue in the ordinary course. Following court approval and the completion of the transaction, 2U expects to emerge from Chapter 11 as a private company backed by its existing lenders and noteholders, including funds managed by Mudrick Capital Management, LP, Greenvale Capital LLP, and Bayside Capital, LLC.