STG Logistics - Chapter 11 Case Summary

Business Description

Headquartered in Dublin, OH, STG Logistics, Inc., along with its Debtor and non-Debtor affiliates (collectively, "STG" or the "Company"), is North America’s leading provider of integrated port-to-door solutions. Originally founded as a warehousing and container freight services company, STG has evolved into a dominant logistics player through strategic expansion.

• The Company operates the largest network of neutral container freight stations (CFS) in North America.
• It ranks as the fourth-largest asset-based intermodal marketing company and one of the largest drayage providers on the continent.

STG operates a vast network comprising approximately 60 leased sites and access to over 130 leased and partnership facilities nationwide. To support its logistics and transportation services, the Company maintains:

• Assets: A fleet of approximately 15,000 domestic intermodal containers, 3,300 chassis, and approximately 2,150 drivers.
• Warehousing: Approximately 4.5 million square feet of space used for CFS, transloading, and contract logistics.
• Carrier Network: Partnerships with thousands of third-party carriers, including transportation companies and owner-operators.

For the fiscal year 2024, STG generated approximately $1.6 billion in annual revenue. The Company organizes its diverse service offerings into two primary divisions:

• Transportation Division: Accounted for the majority of revenue, including Intermodal ($721 million), Drayage ($257 million), and Over-the-Road ($84 million) segments.
• Logistics Division: Comprised of CFS and Transloading ($243 million), Contract Logistics ($77 million), LTL ($36 million), and Freight Force, Inc. ($12 million).

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Corporate History

Founded in 1985 as "St. George Warehouse," the Company began as a warehousing operation in South Kearny, New Jersey. It operated successfully in its core warehousing and CFS markets for decades before embarking on a significant expansion strategy.

Acquisitions and Rebranding

• 2016: The Company was acquired by Wind Point, catalyzing a shift toward broader third-party logistics and intermodal capabilities.
• 2019: Following acquisitions such as Channel Distribution Corporation and Summit NW Corporation, the Company integrated its operations and rebranded under the "STG Logistics" banner.
• 2022: By March 2022, STG had quadrupled in size since Wind Point’s initial acquisition. STG then acquired XPO Intermodal, adding 48 locations, approximately 11,000 intermodal containers, and long-term Class I rail partnerships.
  • As part of the acquisition, STG was recapitalized by Wind Point and Oaktree/Duration, establishing the current equity ownership.
• 2023: The Company further expanded its service offerings into deferred LTL and over-the-road truck brokerage through the acquisitions of Frontline Carrier Systems (USA), Inc., Clear Lane Freight Systems, LLC, and Best Dedicated Solutions, LLC ("BDS").

STG has also been recognized for sustainability efforts, receiving the 2025 Top Supply Chain Projects Award for its "Green Haul Solution" initiative.

Organizational and Equity Structure

Debtor Reception Holdings, L.P. ("Reception Holdings") wholly owns the Debtors. The Company’s equity structure is divided into several classes of preferred and common units:

• Preferred Equity: Includes Class A, Class A-1, and Class A-2 Preferred Units. These are the most senior equity interests and are primarily held by the Consenting Sponsors (Wind Point and Oaktree/Duration) and certain management members.
  • Class A-2 units were issued in connection with a $50 million equity contribution during an October 2024 refinancing.
• Common Equity: Includes Class B Common Units and Class C Common (incentive) Units. These are held by the Consenting Sponsors, Board members, and current/former management.
• Incentive Equity: Additional classes (Class D, E, and F) are issued for sales bonuses and management incentives.

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Operations Overview

STG operates through two main divisions—Transportation and Logistics—leveraging a mix of asset-based capabilities and brokerage services to provide comprehensive supply chain solutions.

Transportation Division

• Intermodal: STG operates one of the largest independent intermodal networks in North America. By combining its 15,000 domestic containers with Class I rail partnerships, STG offers cost-efficient, long-haul alternatives to trucking.
• Drayage: As a leading U.S. drayage provider, STG executes hundreds of thousands of container moves annually. Operating from 40+ terminal locations at major port and rail gateways, this segment provides critical first- and last-mile connections to mitigate congestion.
• Over-the-Road: Through entities like BDS and Explore Airtrans Services, STG provides Full Truckload (FTL) and Less-than-Truckload (LTL) brokerage services, leveraging technology to arrange nationwide transport via third-party carriers.

Logistics Division

• CFS & Transloading: STG is the largest provider of Container Freight Station services in the U.S., operating ~20 warehouses and ~60 partner facilities.
  • Services include bonded devanning, cargo consolidation, and transloading international freight into domestic containers to streamline distribution.
• Contract Logistics: The Company manages approximately 2 million square feet of warehousing space, including retail and food-grade chilled facilities. This segment offers outsourced inventory management, distribution, and e-commerce fulfillment.
• LTL Logistics: utilizing a hub-and-spoke cross-dock network, STG consolidates partial loads for efficient shipping. Services include specialized handling, advanced booking technology, and deferred LTL options.
• Freight Force, Inc.: A network of approved motor carriers in over 65 cities providing cartage, middle-mile, and last-mile delivery, including specialized services like airline container loading and residential white-glove delivery.

Technology

Underpinning its operations is the proprietary Cargo Management Systems (CMS) platform. This technology provides real-time inventory management, shipment transparency, and streamlining of cargo processing across STG’s CFS, contract logistics, and LTL segments. The platform is also licensed to third parties.

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Prepetition Obligations

As of the Petition Date, the Debtors’ capital structure comprises two distinct funded debt silos resulting from an October 2024 refinancing: the STG Distribution silo and the Reception Purchaser silo. In total, the Company reports approximately $1.2 billion in aggregate principal amount of funded debt obligations. The Debtors’ prepetition capital structure is summarized below:

STG Distribution Facilities

• Credit Agreement: The Debtors are party to a credit agreement with Wilmington Savings Fund Society, as administrative and collateral agent. The obligations are secured by a first-priority lien on substantially all assets of the STG Distribution loan parties and, on a pari passu basis, the Reception Purchaser loan parties.
  • The facilities mature on October 3, 2029, subject to a springing maturity of December 24, 2027, if the Reception Purchaser facilities are not terminated by that date.
• Term Loan Facility: The facility is divided into three separate tranches of term loans, which include exchanged loans from the Reception Purchaser facility and new money financing. As of the Petition Date, the outstanding amounts are:
  • FLFO Term Loans: Approximately $209 million is outstanding under the "first out" tranche.
  • FLSO Term Loans: Approximately $669 million is outstanding under the "second out" tranche.
  • FLTO Term Loans: Approximately $101 million is outstanding under the "third out" tranche.
• Revolving Credit Facility: The agreement provides for a senior secured "first out" revolving facility with a capacity of $40 million, available exclusively for the issuance of letters of credit.
  • As of the Petition Date, approximately $25 million in issued and undrawn letters of credit remains outstanding.

Reception Purchaser Facilities

• Credit Agreement: Originally entered into in March 2022 to finance the acquisition of XPO Intermodal, this facility is agented by Antares Capital LP. The obligations are secured by a first-priority lien on substantially all assets of the Reception Purchaser loan parties and certain intangible assets of STG Logistics, Inc.
  • Term Loans: Approximately $56 million remains outstanding under the term loan facility, which matures in March 2028.
  • Revolving Credit Facility: Following the October 2024 refinancing, the majority of the revolving loans were assigned to STG Distribution. Approximately $2 million remains outstanding and owed to non-participating holders under the facility, which matures in March 2027.

Equipment Financings

• The Company carries an aggregate of approximately $98 million in obligations related to various equipment leases and financing arrangements with banks and finance companies.
  • These financings cover essential operational assets, including approximately 11,500 intermodal containers, as well as forklifts, trucks, and racking systems used to support the Company’s logistics and transportation services.

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Events Leading to Bankruptcy

Macroeconomic Headwinds and Industry Decline

• Following a period of extraordinary growth during the COVID-19 pandemic—when revenue increased by more than 60% between 2020 and 2022—the Company encountered a sharp cyclical downturn in the freight market.
  • Beginning in March 2022, the trucking industry faced significant excess capacity built during the pandemic, resulting in sustained pressure on freight rates.
  • As a result, consolidated revenues declined by approximately $65 million between 2023 and 2024, with an additional decline of approximately $162 million projected between 2024 and 2025.
• Operational pressures were exacerbated by a volatile tariff regime and persistent inflation:
  • Beginning in January 2025, shifting tariffs ranging from 10% to 145% disrupted import volumes, which are forecasted to decline by roughly 14% year-over-year in the second half of 2025.
  • Inflationary forces drove significant expense increases, notably insurance and claims costs, which are projected to rise approximately 48% between 2023 and 2025.
• Structural changes in the marketplace further eroded the Company's competitive position:
  • Market consolidation saw the top four third-party logistics providers capture approximately 85% of total market share, intensifying price competition.
  • Large shippers increasingly internalized trucking operations, with private fleets handling an all-time high of 70% of outbound shipments, leaving oversaturated carriers to compete for dwindling demand.

Prepetition Financial Management and Refinancing

• To address liquidity constraints, the Company executed the "Fifth Amendment Transactions" in May 2024, securing a $30 million equity injection from Consenting Sponsors.
• As market conditions continued to deteriorate and Adjusted EBITDA fell approximately 95% year-over-year in Q2 2024, the Company consummated the "October 2024 Refinancing" with the support of over 93% of its lenders.
  • This transaction effectively separated the Company into two silos (STG Distribution and Reception Purchaser) and generated over $327 million in incremental liquidity through new money, PIK interest savings, and debt discounts.
  • Equipment lenders agreed to modify terms, providing 18 months of interest-only payments and extending maturities through 2027.
  • Despite these efforts, two lenders—Siemens Financial Services and Axos Financial—declined to participate and commenced litigation in New York Supreme Court regarding the October 2024 Refinancing.

Operational Restructuring and Governance

• In anticipation of a prolonged downturn, management implemented aggressive EBITDA improvement initiatives beginning in mid-2025:
  • Measures included a headcount reduction of 242 employees, real estate rationalization, and network optimization, aimed at realizing approximately $68 million in annualized cost savings.
• To ensure robust governance during the restructuring process, the Company appointed independent directors and established special committees:
  • Keshav Lall was appointed to the Board in August 2024 to oversee the October Refinancing.
  • David Barse was appointed in July 2025 to lead a Special Committee authorized to investigate potential claims and negotiate restructuring transactions.

Restructuring Support Agreement (RSA)

• With unrestricted cash dwindling to approximately $34 million and market recovery failing to materialize, the Debtors entered into a Restructuring Support Agreement on January 12, 2026.
• The RSA, supported by approximately 95% of STG Distribution RCF holders and 90% of FLFO Term Loan holders, contemplates a dual-track process:
  • Recapitalization Transaction: A balance sheet right-sizing that equitizes all or a portion of the DIP Claims, FLFO Term Loan Claims, and FLSO Term Loan Claims.
  • Sale Transaction: A marketing process to sell all or substantially all assets to the highest bidder, with a bid deadline of March 13, 2026, and a targeted sale hearing by March 28, 2026.

DIP Financing and Path Forward

• To fund the Chapter 11 cases and maintain operations, the Debtors secured a DIP Facility with an aggregate principal amount of approximately $294 million.
  • The facility consists of up to $150 million in "new money" superpriority term loans and a "roll-up" of approximately $144 million in existing prepetition term loan claims.
  • This financing provides the necessary signal to vendors and customers that the Company remains well-capitalized to continue business in the ordinary course while pursuing the Recapitalization or Sale Transaction.