Skillsoft Lenders Tap Counsel Again as Software Distress Worsens

Skillsoft Corp. lenders have re-engaged law firm Gibson Dunn & Crutcher for legal advice as the company's financial distress deepens, according to people familiar with the matter. The decision reflects increasing concern among lenders as Skillsoft's debt continues to deteriorate.

Skillsoft has struggled to improve its earnings amid a broader industry shift driven by artificial intelligence. The company has faced growing pressure to adapt, with lenders monitoring its ability to generate sustainable returns according to reports.

In an effort to stabilize its balance sheet, Skillsoft is pursuing a strategic review of its underperforming Global Knowledge segment. This unit has consistently dragged on the company's overall performance, with revenue declining sharply.

Why the Move Happened

Gibson Dunn previously represented Skillsoft's lenders during its 2020 Chapter 11 bankruptcy proceedings. The firm's re-engagement suggests lenders are preparing for further legal maneuvering, possibly including a restructuring or sale of distressed assets.

Skillsoft's financial struggles have worsened since it announced plans to sell the Global Knowledge unit. The segment's acquisition through a blank-check company shortly after the company exited bankruptcy has proven to be a costly misstep.

How Markets Reacted

Skillsoft's debt has fallen sharply since December, reflecting growing investor skepticism about its turnaround efforts. As of February 3, 2026, the company's $582 million loan due in 2028 was trading at 65.25 cents on the dollar, a significant decline from its 81.875 cents level on December 2.

The market reaction highlights the growing concern among investors about Skillsoft's ability to reverse its financial trajectory. With a history of declining revenue and rising losses, the company's ability to attract buyers or restructure its debt remains uncertain.

What Analysts Are Watching

Analysts are closely monitoring Skillsoft's strategic review process and its ability to execute a credible restructuring plan. The company's recent efforts to launch an AI-driven platform, such as Principio, could provide a potential turnaround path if it gains traction.

The company's management has outlined guidance for fiscal 2026, including $400-410 million in TDS revenue and $112-116 million in adjusted EBITDA. However, the success of these targets will depend heavily on the performance of its core business and the potential divestiture of Global Knowledge.

Investors and analysts are also watching for further updates from Skillsoft's legal advisors and the broader market response to any proposed restructuring. The company's ability to secure new financing or attract strategic buyers will be critical to its survival.