• Cooperation agreement holding about 80% of term loans signed yesterday
• Moelis, the company’s banker, engages directly with non-cooperating lenders
• Experienced leisure investor Hill Path Capital owns over 20% of stock

Dave & Buster’s Entertainment lenders who didn’t sign onto a cooperation agreement have formed their own group with Paul Weiss as legal counsel, said three sources familiar with the matter.

Moelis, which is advising the listed operator of big box dining and arcade gaming venues, has been talking directly with the non-coop lenders, said two of the sources.

A minority group could presage an aggressive liability management exercise that would see the group provide new capital through the issuance of priming debt and agree to swap their holdings of existing debt at a discount, said a fourth source familiar with the matter.

Earlier this week, holders of around 80% of the company’s term loans joined the majority co-op, some of the sources said.

The majority group of lenders tapped Gibson Dunn and PJT Partners as advisers, Debtwire previously reported. Alongside Moelis, the company is working with Latham & Watkins as legal counsel and Alvarez & Marsal as financial advisor, Debtwire previously reported.

While publicly listed, Hill Path Capital is Dave & Buster’s largest shareholder with an over 20% stake in the company, according to filings. The investor’s co-founder, James Chambers, is the chair of Dave & Buster’s board, and managing partner Scott Ross sits on the board. Both have extensive experience investing in the leisure sector.

The company’s debt sank into distressed territory after it reported a surprise fiscal 2Q26 loss in September. Its USD 898m SOFR+ 325bps term loan due 2029 was quoted 60.5/63.3 today (4 Nov), up five points from 26 October, according to Markit. Its USD 700m SOFR+ 325bps term loan due 2031 was quoted 50/52. Both loans were quoted around 90 before the company reported poor fiscal 1Q26 earnings in June.

Dave & Buster’s has been pursuing a turnaround strategy, but lower-income consumers are spending less and costs are rising. For the second quarter ended 4 August, adjusted EBITDA fell 24% YoY on a 2.4% YoY drop in sales. Comparable-store sales fell 2.9% YoY to USD 506m, after a 5.4% decline in fiscal 1Q26.

Dave & Buster’s net total leverage was 3.5x at quarter-end, against a maximum permitted ratio of 4.0x. The company has said it remains in compliance with its debt covenants.

Moelis declined to comment. The company, Paul Weiss, Gibson didn’t return requests for comment.