STG Logistics - Chapter 11 Bidding Procedures Summary

Bidding Procedures Summary

Parties Involved

• The Debtors, as Sellers
• The Ad Hoc Group and certain additional holders collectively holding approximately 98.6% of FLFO Term Loans, 100% of STG Distribution RCF, 94.6% of FLSO Term Loans, and 83.6% of FLTO Term Loans
• The Debtors' existing equity sponsors: Wind Point Partners AAV II, L.P. and Reception Oaktree Aggregator, L.P. and certain of its affiliates
• Consultation Parties include the Ad Hoc Group, the Official Committee of Unsecured Creditors, the Minority Lenders (Axos Financial, Inc. and Siemens Financial Services, Inc.), and any other statutory committee appointed in these chapter 11 cases
  • To the extent any Consultation Party submits a Bid on a particular Sale Package, including a credit bid, such Consultation Party shall not be a Consultation Party with respect to the evaluation and qualification of competing Bids for the applicable Sale Package or with respect to seeking and/or obtaining information about other Bids in respect of such Sale Package (unless and until such bid is withdrawn), but shall remain a Consultation Party for other purposes and for all other Sale Packages
  • Neither the Ad Hoc Group nor any secured lender shall be a Consultation Party with respect to receiving any Bid on any Sale Package or any analysis of any Bid on any Sale Package prepared by the Debtors unless and until the deadline for submitting a credit bid passes and (x) with respect to the Ad Hoc Group, the Ad Hoc Group does not submit a Bid, including a credit bid, or (y) with respect to any other secured lender, such secured lender does not submit a Bid, including a credit bid

Assets Being Sold

• All, substantially all, or any portion of the Debtors' assets or equity interests
• Sale Packages include the Debtors' going-concern business, unexpired leases, executory contracts, equipment, inventory, supplies, intellectual property, insurance proceeds, prepaid expenses and deposits, and books and records
• Specific operations include:
  • Over-the-road services including full truckload (FTL) shipments and less-than-container (LCL) shipments
  • Intermodal services which integrates rail transportation with over-the-road trucking services, and drayage services
  • Container freight stations (CFS) and transloading services
  • Specialized less-than-truckload (LTL) services
  • Cartage and truckload provider, Freight Force, Inc.
  • Contract logistics services business
• All assets to be sold free and clear of all liens, claims, interests, or other encumbrances

Stalking Horse Bid

• The Debtors are authorized, but not obligated or directed, in an exercise of their reasonable business judgment after consultation with the Consultation Parties, to designate one or more Stalking Horse Bidders with respect to the applicable Sale Package and enter into a Stalking Horse Agreement
• Upon entry of the Bidding Procedures Order, the Debtors may designate Stalking Horse Bidders and provide Stalking Horse Bid Protections, subject to court approval
• In the event the Debtors enter into a Stalking Horse Agreement, they shall file and serve a Stalking Horse Notice on the Stalking Horse Bidder(s), the Consultation Parties, and the U.S. Trustee
• The Stalking Horse Notice shall include:
  • The identity of the Stalking Horse Bidder
  • The amount of the Stalking Horse Bid
  • The proposed Stalking Horse Bid Protections to be provided to the Stalking Horse Bidder
  • The terms of the Stalking Horse Agreement
  • The applicable Sale Package to which the Stalking Horse Bid relates
• To the extent the Debtors designate more than one Stalking Horse Bidder, no two Stalking Horse Bidders will be designated with respect to any of the same Sale Package

Bid Protections

• Break-Up Fee: Not to exceed 3.0% of the Purchase Price
• Expense Reimbursement: Reasonable and documented out-of-pocket fees and expenses
• The Debtors shall not pay Stalking Horse Bid Protections on account of the portion of the purchase price that is a credit bid, assumption of liabilities, or other non-cash (or cash equivalent) consideration, nor provide any Bid Protections to an insider or affiliate of the Debtors
• No Stalking Horse Bid Protections may be provided to any Bidder without the prior consent of the Required Consenting FLFO Term Lenders (not to be unreasonably withheld, conditioned, or delayed) and in consultation with the Committee
• The Stalking Horse Bid Protections shall be subject to the reasonable consent of the Required Consenting FLFO Term Lenders under the Restructuring Support Agreement
• Any objection to the Stalking Horse Bid Protections or the designation of the Stalking Horse must be filed no later than two business days after the filing of the Stalking Horse Notice at 4:00 p.m. (prevailing Eastern Time)
• Absent any timely objection, the Stalking Horse Bid Protections and the designation of the Stalking Horse are approved

Credit Bid

• Any Qualified Bidder who has a valid and perfected lien on any portion of the applicable Sale Package shall have the right to credit bid all or a portion of the value of such claims within the meaning of section 363(k) of the Bankruptcy Code
• A Secured Creditor shall have the right to credit bid its claim only with respect to the collateral by which such Secured Creditor is secured
• Secured Creditors shall not be permitted to credit bid at or after the Auction unless the Secured Creditor notifies the Debtors and the Committee (email between counsel being sufficient) that they intend to credit bid at least one calendar day before the commencement of the Auction
• Any credit bid (or other application of an asserted secured claim) is expressly subject to the reservations of rights and remedial flexibility set forth in paragraph 32 of the Bidding Procedures Order
• Any credit bid made by a Secured Creditor will be deemed to be a cash Bid solely for purposes of the Debtors' evaluation of Bids
• No party other than the Prepetition Secured Parties may credit bid on the DIP Collateral unless the entire amount of the Prepetition Loan Obligations and DIP Obligations will be paid in full in cash on the closing of such credit bid transaction
• If any Successful Bid contemplates satisfaction in whole or in part through a credit bid, Bankruptcy Court approval of such credit bid shall be approved subject and without prejudice to the Bankruptcy Court's determination of the claims asserted by the Minority Lenders in the LMT Adversary Proceeding

Good Faith Deposit

• Each Bid must be accompanied by a cash deposit in the amount equal to 10.0% of the cash purchase price of the Bid, to be held in an escrow account to be identified and established by the Debtors
• To the extent that a Bid is modified at or prior to the Auction, the applicable Acceptable Bidder must adjust its Good Faith Deposit so that it equals 10.0% of the increased cash purchase price promptly and in no event later than one business day following the conclusion of the Auction
• Within one business day of the selection of the Successful Bidder, such Successful Bidder (including both the Stalking Horse Bidder(s), if any, and Back-Up Bidder, if applicable) shall make a cash deposit, in addition to its Good Faith Deposit, in an amount calculated on the basis of the increased aggregate purchase price such that the Successful Bidder's total cash deposit is equal to 10.0% of the aggregate purchase price
• The Good Faith Deposit(s) of the Successful Bidder, if any, will, upon consummation of the Successful Bid, become property of the Debtors' estates and be credited to the portion of such Successful Bidder's applicable Purchase Price
• If the Successful Bidder (or Back-Up Bidder, if applicable) fails to consummate the Successful Bid (or Back-Up Bid, if applicable), then the Good Faith Deposit will be irrevocably forfeited to the Debtors and may be retained by the Debtors as liquidated damages
• The Good Faith Deposits of any unsuccessful Qualified Bidders (except for any Back-Up Bidder and any Stalking Horse Bidders) will be returned within five business days after consummation of the applicable Sale Transaction or upon the permanent withdrawal of the applicable proposed Sale Transaction
• The Good Faith Deposit(s) of any Back-Up Bidder will be returned to such Back-Up Bidder no later than five business days of the Back-Up Termination Date
• The return of any Good Faith Deposits of any Stalking Horse Bidders will be subject to the terms of such Stalking Horse Bidders' plan or purchase agreement, as applicable
• All such deposits shall be held in escrow and at no time shall be deemed property of the Debtors' estates absent further order of the Court

Bid Requirements

• To participate in the bidding process, including to receive access to due diligence materials, a Potential Bidder must deliver the following preliminary documentation:
  • An executed confidentiality agreement in form and substance acceptable to the Debtors
  • Identification of the Potential Bidder and any principals and representatives thereof who are authorized to appear and act on its behalf
  • A statement of what Sale Package the Potential Bidder intends to acquire
  • Sufficient information that the Potential Bidder has or can reasonably obtain the financial capacity to close the contemplated Sale
  • A statement detailing whether the Potential Bidder is partnering with or otherwise working with any other interested party in connection with the potential submission of a joint Bid
• To be eligible to participate in the Auction, an Acceptable Bidder must deliver an irrevocable offer (a Qualified Bid) that meets the following criteria:
  • Clearly state what Sale Package and which assets or equity the bidder seeks to purchase, the liabilities and obligations to be assumed, and any executory contracts and unexpired leases to be received by assignment
  • Be accompanied by a Good Faith Deposit equal to 10.0% of the cash purchase price
  • Clearly set forth the Purchase Price, identify separately the cash and non-cash components, indicate the allocation of the Purchase Price among the applicable Sale Package, and describe its proposed post emergence debt obligations and liquidity position (if the Bid contemplates effectuating the sale through a plan of reorganization)
  • Specify with particularity its tax structure and identify the structure proposed for undertaking any Sale Transaction
  • Include evidence of committed financing (if not accompanied by evidence of capacity to consummate with cash on hand) that is unconditional and not subject to any internal approvals, syndication requirements, diligence, or credit committee approvals
  • Include duly executed and non-contingent transaction documents necessary to effectuate any Sale Transactions contemplated in the Bid, including purchase agreement and related material documents
  • Include a statement that the bid does not entitle such bidder to any break-up fee, termination fee, expense reimbursement, or similar type of payment or reimbursement (unless selected as a stalking horse bid) and a waiver of any substantial contribution administrative expense claim
  • Include a description of the Acceptable Bidder's intentions with respect to the relevant members of the Debtors' current management team and other employees
  • Identify the Executory Contracts and Unexpired Leases to be assumed or assumed and assigned, provide for the Cure Payments, and demonstrate adequate assurance of future performance
  • Not contain any contingencies as to the validity, effectiveness, or binding nature of the Bid, including contingencies for due diligence and inspection or financing of any kind
  • Fully disclose the identity of each entity that will be participating in connection with such Bid and include contact information for the specific person(s) and counsel
  • Include a written acknowledgement and representation that the Acceptable Bidder has had an opportunity to conduct due diligence, has relied solely upon its own independent review, and did not rely upon any written or oral statements, representations, promises, warranties, or guaranties
  • Contain evidence that the Acceptable Bidder has obtained all necessary authorizations or approvals from its shareholders and/or its board of managers or directors
  • Acknowledge its compliance in all respects with the Bidding Procedures, the Bidding Procedures Order, the Bankruptcy Code and any applicable non-bankruptcy law
  • Include written acknowledgment that the Acceptable Bidder has not engaged in any collusion with respect to any Bids or any Sale Transaction
  • Constitute a good faith, bona fide offer to consummate any Sale Transaction
  • Provide that the Acceptable Bidder will serve as a Back-Up Bidder if the Acceptable Bidder's Bid is the next highest or otherwise best bid after the Successful Bid
  • Set forth each regulatory and third-party approval required for the Acceptable Bidder to consummate the applicable Sale Transaction
  • State the Acceptable Bidder's expected date of closing of any Sale Transaction
  • Be reasonably likely to be consummated within a time frame acceptable to the Debtors, in consultation with the Committee, and consistent with the Restructuring Support Agreement
  • Include agreement to abide by and honor the terms of the Bidding Procedures and not to submit a Bid or seek to reopen the Auction after conclusion
  • Submit to the jurisdiction of the Court and waive any right to a jury trial in connection with any disputes relating to the Auction, the Sale, and related matters
  • Identify with particularity each and every condition to closing, including the Executory Contracts and Unexpired Leases for which assumption and assignment is required
• Minimum Bid Requirement: If the aggregate cash consideration for the Sale Packages do not provide for (a) payment in full in cash at closing of all DIP Obligations (including all accrued and unpaid fees and interest), plus (b) payment in full in cash at closing of all FLFO Claims (including all accrued and unpaid fees and interest), plus (c) a recovery at closing to the holders of FLSO Claims in an amount at least equal to the amount provided pursuant to the Restructuring Support Agreement, then the Debtors shall terminate the sale process and cancel the Auction; provided that the Minimum Bid Requirement shall not apply to any Bid with respect to less than all or substantially all of the Sale Package

Overbid

• Minimum Overbid: At the Auction, the Debtors, in consultation with the Consultation Parties, shall announce the minimum increment by which any Overbid must increase in cash, cash equivalents, or other such consideration over the previous bid plus the aggregate amount of Stalking Horse Bid Protections (if applicable)
• The Debtors may, in consultation with the Consultation Parties, announce increases or reductions to the Minimum Overbid at any time during the Auction
• Each successive Bid that a Qualified Bidder may submit at the Auction must contain a Purchase Price that exceeds the then existing highest Bid by at least the amount of the Minimum Overbid
• Each Qualified Bidder will be permitted a reasonable time to respond to previous bids at the Auction, as determined by the Debtors

Auction Details

• The Auction, if necessary, shall commence on April 24, 2026 at 10:00 a.m. (prevailing Eastern Time), or such later time or other place as the Debtors determine
• The Auction shall be held at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022
• If the Debtors receive more than one Qualified Bid for the applicable Sale Package by the Bid Deadline, the Debtors shall conduct the Auction to determine the Successful Bidder
• If the Debtors determine they have received no Qualified Bids other than any Stalking Horse Bid(s) or they have received only a single Qualified Bid, then the Auction will not occur
• Only Qualified Bidders shall be entitled to bid at the Auction
• Only the Debtors, Qualified Bidders, the Consultation Parties, the U.S. Trustee, and such parties' representatives and advisors may attend the Auction; however, any party in interest including but not limited to the Consultation Parties and their respective counsel will be permitted to attend the Auction
• The Debtors, with the assistance of their advisors, shall direct and preside over any Auction
• At the commencement of the Auction, the Debtors may announce modified or additional procedures for conducting the Auction and related rules governing the Auction
• Bidding shall begin with the Starting Bid (the highest or otherwise best Qualified Bid or combination of Qualified Bids as determined by the Debtors in consultation with the Consultation Parties)
• During the course of the Auction, the Debtors shall, after submission of each Overbid, promptly inform each Qualified Bidder of the terms of the previous bids and inform each Qualified Bidder which Overbid(s) reflect the highest or otherwise best bid(s)
• To remain eligible to participate in the Auction, in each round of bidding, each Qualified Bidder must submit an Overbid with respect to such round of bidding; failure to do so shall result in disqualification from continuing to participate in the Auction
• The Auction will be transcribed to ensure an accurate recording of the bidding at the Auction
• Each Qualified Bidder will be required to confirm on the record that it has not engaged, and will not engage, in any collusion with respect to the bidding or any Sale Transaction
• Each Qualified Bidder will be required to confirm that its bid is a good faith, bona fide offer and it intends to consummate any Sale Transaction if selected as the Successful Bid
• The Court and the Debtors will not consider bids made after the Auction has been closed
• The Debtors, in their reasonable business judgment and after consultation with the Consultation Parties, may reject any Bid that they determine is inadequate or insufficient, not in conformity with the requirements of the Bankruptcy Code, the Bidding Procedures, or the terms and conditions of any Sale Transaction, or contrary to the best interests of the Debtors, their estates, their creditors, and other stakeholders
• The Debtors reserve the right to adjourn the Auction one or more times to facilitate discussions between the Debtors and Qualified Bidders, allow Qualified Bidders the opportunity to consider how they wish to proceed, and provide Qualified Bidders the opportunity to provide additional evidence
• The Auction shall continue until there is only one Qualified Bid or a combination of Qualified Bids that the Debtors determine is the highest or otherwise best bid to purchase the applicable Sale Package (a Successful Bid), and the Debtors determine that further bidding is unlikely to result in a different Successful Bid
• When determining the highest or otherwise best Qualified Bid, the Debtors, in consultation with the Consultation Parties, may consider the following factors: the amount and nature of the total consideration, the likelihood of the Qualified Bidder's ability to close a transaction and the timing thereof, the net economic effect of any changes to the value to be received by each of the Debtors' estates, the Debtors' regulatory requirements, the tax consequences of such Qualified Bid, whether the Qualified Bid contemplates a Sale Transaction that would be consummated through a plan or a sale pursuant to section 363 of the Bankruptcy Code, the certainty of a Qualified Bid leading to a confirmed plan, and any other consideration that may impact the Debtors' stakeholders
• The Debtors shall send written notice of the date, time, and place of the Auction to the Qualified Bidders, the Consultation Parties, and the U.S. Trustee no later than two business days before such Auction

Back-Up Bidder

• The Back-Up Bid to purchase any applicable Sale Package will be determined by the Debtors after consultation with the Consultation Parties at the conclusion of the Auction, and will be announced at that time to all the Qualified Bidders participating in the Auction
• The Debtors will be authorized, but not required, to consummate any Sale Transaction with the Back-Up Bidder without further order of the Court, so long as such Back-Up Bid shall have been approved in connection with the Court's approval of the Successful Bid, or subject to Court approval if not
• If for any reason a Successful Bidder fails to consummate the purchase of the applicable Sale Package within the time permitted, then the Back-Up Bidder will automatically be deemed to have submitted the Successful Bid and shall be required to consummate any Sale Transaction with the Debtors as soon as is reasonably practicable without further order of the Court, upon 24 hours advance notice filed with the Court
• The Back-Up Bid shall remain open and irrevocable until the earliest to occur of (i) ninety days following the hearing to consider the applicable order approving the Sale Transaction(s), (ii) confirmation of a plan, and (iii) the release of such Back-Up Bid by the Debtors in writing after consultation with the Consultation Parties
• The Debtors shall return the Back-Up Bidder's deposit owed within five business days of the Back-Up Termination Date

Assumption and Assignment

• As soon as reasonably practicable upon conclusion of any Auction (or, if no Auction is held, the Bid Deadline), the Debtors shall file on the docket and serve a notice of contracts assumed and assigned to any Successful Bidder (the Assumption Notice) via first-class mail on the Contract or Lease Counterparties and their counsel (to the extent known)
• The Assumption Notice shall inform each recipient of the timing and procedures relating to such assumption and assignment, and, to the extent applicable: the title of the Executory Contract or Unexpired Lease, the name of the Contract or Lease Counterparty, Debtors' good faith estimates of the Cure Payments, if any, required in connection with the Executory Contract or Unexpired Lease, and the Sale Objection Deadline
• Service of an Assumption Notice does not constitute an admission that any Executory Contracts and Unexpired Leases listed thereon is an executory contract or that such stated Cure Payment constitutes a claim against the Debtors or a right against any Successful Bidder
• The inclusion of a contract on the Assumption Notice is not a guarantee that such contract will ultimately be assumed and assigned
• The payment of the applicable Cure Payments by the Debtors and/or the Successful Bidder shall effect a cure of all defaults existing thereunder, compensate for any actual pecuniary loss to such counterparty resulting from such default, and together with the assumption and assignment, constitute adequate assurance of future performance thereof
• To the extent the Debtors, at any time after the Auction (or, if no Auction is held, the Bid Deadline) identify additional Executory Contracts or Unexpired Leases that may be assumed by and assigned to the Successful Bidder, remove any Executory Contracts or Unexpired Leases from the list attached to the Assumption Notice, and/or modify the previously stated Cure Payment associated with any Executory Contract or Unexpired Lease, the Debtors will promptly file with the Court and serve by first-class mail a Supplemental Assumption Notice on each of the Contract or Lease Counterparties affected
• The Debtors (in consultation with the Successful Bidder) may designate additional Executory Contracts and Unexpired Leases to be assumed and assigned up to two business days prior to the Closing and may remove Executory Contracts or Unexpired Leases from the list up to two business days prior to Closing
• Objections to the proposed assumption and assignment or the Cure Payment proposed with respect thereto must be filed with the Court and served so as to be actually received no later than April 29, 2026, at 4:00 p.m., prevailing Eastern Time, or the deadline set forth in a Supplemental Assumption Notice, as applicable
• In the event that the Debtors and a Contract or Lease Counterparty cannot resolve an objection to a Cure Payment, the Debtors shall segregate the Cure Payment that the Contract or Lease Counterparty asserts is required to be paid, pending a resolution of the dispute by the Court or mutual agreement
• No Executory Contract or Unexpired Lease shall be deemed assumed and assigned pursuant to section 365 of the Bankruptcy Code until the later of (i) the date the Court has entered an order assuming and assigning such Executory Contract or Unexpired Lease or (ii) the date any Sale Transaction has closed
• Any party failing to timely file an objection to the Cure Payments or the proposed assumption and assignment of an Executory Contract or Unexpired Lease listed on the Assumption Notice or a Supplemental Assumption Notice is deemed to have consented to such Cure Payment, the assumption and assignment of such Executory Contract or Unexpired Lease, the related relief requested in the Motion, and the applicable Sale Transaction
• Such party shall be forever barred and estopped from objecting to the Cure Payments, the assumption and assignment of the Executory Contract or Unexpired Lease, adequate assurance of future performance, and from asserting any additional cure or other amounts against the Debtors and the Successful Bidder
• The Debtors shall, concurrently with the Assumption Notice, provide evidence to each Executory Contract or Unexpired Lease counterparty that the proposed assignee has the ability to comply with the requirements of adequate assurance of future performance; provided that any such evidence that constitutes nonpublic information shall be provided on a confidential basis
• Only those Executory Contracts and Unexpired Leases that are included on a schedule of assumed and assigned contracts attached to the executed definitive asset purchase agreement with a Successful Bidder will be assumed and assigned to the applicable Successful Bidder

LMT Adversary Proceeding Reservations

• Nothing in the Bidding Procedures Order or the Bidding Procedures shall prejudice, limit, or impair any claim, cause of action, defense, or remedy of the Minority Lenders (Axos and Siemens) relating to the October 2024 liability management transactions (the "LMT Transactions"), including claims in the LMT Adversary Proceeding commenced by the Minority Lenders on February 4, 2026
• Nothing in the Order constitutes an adjudication, allowance, disallowance, validation, ratification, or compromise of any claim or defense of the Minority Lenders arising out of the LMT Transactions
• All findings and determinations in the Order are entered solely for purposes of approving the Bidding Procedures and shall have no preclusive or evidentiary effect in the LMT Adversary Proceeding; the Court may fashion any appropriate remedy in connection with the LMT Adversary Proceeding, including regarding any party's right to credit bid
• These reservations survive entry of the Order, any sale of assets, plan confirmation, and any conversion or dismissal of the cases, and are binding on all parties and their successors and assigns

Sale Free and Clear

• The Debtors are seeking to sell all, substantially all, or any portion of the Debtors' assets or equity interests free and clear of all liens, claims, rights, interests, pledges, obligations, restrictions, limitations, charges, encumbrances, and other interests consistent with the Bidding Procedures approved by the Court
• If any party fails to timely file with the Court and serve an objection by the Sale Objection Deadline or otherwise abide by the procedures set forth in the Bidding Procedures regarding an objection to any Sale Transaction, such party shall be barred from asserting any objection to the relief requested in the Motion or to the consummation and performance of any Sale Transaction, including the transfer of the applicable Sale Package to the Successful Bidder, free and clear of all liens, claims, interests, and encumbrances pursuant to section 363(f) of the Bankruptcy Code, and shall be deemed to "consent" for the purposes of section 363(f) of the Bankruptcy Code

Key Dates

• Bid Deadline: April 17, 2026, at 4:00 p.m. prevailing Eastern Time; provided that the Debtors may extend the Bid Deadline to May 1, 2026, at 4:00 p.m. prevailing Eastern Time in consultation with the Committee
• Qualified Bid Designation Deadline: No later than two days prior to the Auction, the Debtors in consultation with the Consultation Parties shall determine which Acceptable Bidders are Qualified Bidders and will notify the Acceptable Bidders whether Bids submitted constitute Qualified Bids
• Auction (if necessary): April 24, 2026 at 10:00 a.m. prevailing Eastern Time
• Auction Notice Deadline: The Debtors shall send written notice of the date, time, and place of the Auction to the Qualified Bidders, the Consultation Parties, and the U.S. Trustee no later than two business days before such Auction
• Notice of Successful Bidder: Within two days of the conclusion of the Auction, the Debtors shall file the Notice of Successful Bidder
• Sale Objection Deadline: April 29, 2026, at 4:00 p.m., prevailing Eastern Time
• Sale Hearing: May 18, 2026 at 10:00 a.m., prevailing Eastern Time, or as soon thereafter as the Debtors may be heard