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WorldStrides' Restructuring Under Chapter 11

On July 20, 2020, Lakeland Tours, LLC, d/b/a WorldStrides (“WorldStrides”) filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York. On July 8, 2020, WorldStrides signed a Restructuring Support Agreement (“RSA”) with (i) holders of 85% of its term and revolving loans, (ii) its private equity sponsors, Eurazeo North America, as manager of funds affiliated with Eurazeo SE (“Eurazeo”) and Primavera Capital Management Ltd. (“Primavera” and together with Eurazeo, the “Sponsors”) and (iii) its consenting hedge provider. The RSA contemplates a “pre‑packaged” plan that would significantly deleverage the company. The transaction involves a $368 million debtor‑in‑possession (“DIP”) financing facility, of which $216 million consists of new money loans provided equally by the consenting lenders, on the one hand, and the Sponsors, on the other hand. At exit, the Sponsors will receive their pro rata share of 100% of the new common stock issued by the reorganized debtors.

Cravath is representing Eurazeo in its capacity as controlling shareholder of WorldStrides and DIP lender under the DIP Credit Agreement. Cravath has been advising Eurazeo throughout the restructuring process and will continue to do so throughout the course of the WorldStrides bankruptcy case. Under the milestones set forth in the RSA, the Bankruptcy Court is expected to enter the Confirmation Order by September 18, 2020. WorldStrides is expected to emerge from Chapter 11 shortly thereafter, by October 3, 2020.

The Cravath team includes partners Paul H. Zumbro, George E. Zobitz and Lauren A. Moskowitz and associates Christina S. Shin, Jessica I. Choi, Harold C. King and Tammuz Huberman on financial reorganization and restructuring and related litigation matters; partner Andrew W. Needham and associate Arvind Ravichandran on tax matters; partner Aaron M. Gruber and associate Andrew M. Wark on M&A matters; partner Jonathan J. Katz and associate Sally Ye on executive compensation and benefits matters; and of counsel Christopher J. Kelly and senior attorney Elizabeth Albert on banking and credit matters.