United Site Services - Chapter 11 Case Summary

Business Description

Headquartered in Westborough, MA, United Site Services, Inc, along with its Debtor affiliates (collectively, "USS" or the "Debtors"), is the largest provider of portable sanitation systems and related site services in the United States. With a workforce of more than 3,000 employees, the Company serves over 70,000 customers across 47 states, ranging from homebuilders and music festivals to the Federal Emergency Management Agency (FEMA) and the Super Bowl.

• Core Sanitation Services: USS delivers and services portable restrooms and hand hygiene stations (sinks and sanitizer units). Its fleet consists of approximately 350,000 portable restrooms, ranging from standard plastic single-user units to luxury mobile trailers equipped with air conditioning, electricity, and running water.
• Complementary Site Services: Beyond sanitation, USS provides temporary fences, crowd control barricades, modular storage, temporary power sources, and roll-off dumpsters.
• Liquid Waste Removal: The Company performs non-hazardous liquid waste removal, pumping high volumes from commercial settings such as restaurant grease traps, landfill leachate, and underground water at construction sites.

USS differentiates itself through consistent, high-quality cleaning and maintenance standards designed to align portable restroom cleanliness with public expectations for permanent facilities. The Company’s diverse customer base relies on these standards for operations lacking permanent infrastructure.

• Construction Sector: The construction industry is USS’s most significant revenue driver, accounting for over 70% of total revenue.
• Events and Emergency Response: USS supports special events like fairs, concerts, and sporting events, while also providing rapid response services to government agencies following natural disasters, such as the California wildfires in January 2025.

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Corporate History

The USS platform was established in 2000 following the acquisition of Handy House, a service provider based in Foxborough, Massachusetts. Since its inception, the Company has pursued a growth strategy built on purchasing and integrating local service providers.

Expansion and "Roll-Up" Strategy

• By 2010, USS had completed approximately 80 acquisitions, expanding its service lines to include fencing, roll-off dumpsters, and restroom trailers.
• By 2017, the Company had executed 134 acquisitions, though the acquired businesses had not yet been rationalized into a single integrated platform.

Platinum Acquisition and Optimization

• In 2017, investment vehicles managed by Platinum, a U.S.-based private equity firm, acquired USS.
• Under Platinum’s ownership, USS consolidated operations, executed further strategic acquisitions, and invested in employee development and nationwide sales. These initiatives reportedly led to a tripling of EBITDA.

Corporate Structure

• The lead Debtor, United Site Services, Inc., was incorporated in Delaware in 2009.
• PECF USS Holding Corporation, directly or indirectly owned by funds controlled by Platinum, holds all equity interests in the Debtors.

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Operations Overview

USS primarily operates a route-based sanitation model involving the recurring delivery, cleaning, sanitizing, and restocking of units at customer sites. Service technicians typically visit sites at a recommended frequency of at least twice a week, while specialized technicians handle roll-off dumpsters and high-volume pumping tasks.

Branch Network and Logistics

• Service technicians report to local home branches, which typically comprise a small office, maintenance bay, and fenced service yard.
• Branches often report to an area operations manager, facilitating the sharing of resources and equipment across neighboring markets.

Supply Chain and Fleet

• Vendor Relationships: USS relies on a concentrated number of key suppliers for critical inventory, including portable restroom units, trailers, paper products, and sanitizing chemicals.
• Fleet Management: The Company utilizes a minimal number of trucking companies to lease and service the thousands of vehicles required to transport equipment to job sites.

Waste Disposal and Compliance

• USS maintains local permits to dispose of waste at sewage treatment facilities and adheres to all applicable environmental regulations.
• Where permitted, operations are made more efficient by disposing of waste directly into local sewage lines at specific locations.

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Prepetition Obligations

As of the Petition Date, the Debtors reported approximately $2.85 billion in total funded debt liabilities, primarily incurred or restructured during a 2024 recapitalization. Additionally, the Company carries approximately $87 million in trade accounts payable and accrued liabilities. The Company’s prepetition capital structure is summarized below:

Secured Debt

• ABL Facility: Approximately $153.2 million is outstanding under the asset-based revolving credit facility agented by Bank of America, N.A.
  • The facility is secured by a first-priority lien on current assets—including cash, accounts receivable, and the Debtors’ fleet of portable restrooms and trailers—and a second-priority lien on substantially all other assets.
  • In addition to funded loans, $4.1 million in letters of credit are outstanding, primarily securing obligations to repair and maintenance providers.
  • The facility matures in April 2030, subject to a springing maturity in August 2029 if certain financial tests are not met.
• 2024 First Lien Facilities: Following a recapitalization transaction in 2024, Debtor Vortex Opco, LLC (Vortex Borrower) issued multiple tranches of debt totaling approximately $2.5 billion. These obligations share a first-priority lien on Non-ABL Priority Collateral and a second-priority lien on ABL Priority Collateral.
  • First-Out Debt: This tranche holds the senior-most payment priority within the 2024 facilities and matures in April 2030. It consists of:
    • $436.2 million in First-Out Term Loans;
    • $100.0 million in First-Out Revolving Loans; and
    • $10.4 million in floating rate senior secured notes (First-Out Notes).
  • Second-Out Term Loans: Approximately $1.77 billion remains outstanding under this tranche, which is subordinated in payment right to the First-Out Debt. These loans mature in December 2028, with an option to extend to April 2030.
  • Third-Out Notes: Approximately $193.8 million is outstanding in 8.000% senior secured notes due 2030. Repayment of these notes is subordinated to both the First-Out and Second-Out obligations.
• Amended Term Loans: Approximately $46.2 million remains outstanding under a pre-2024 credit agreement agented by UMB Bank, N.A.
  • These loans represent the "stub" portion of a legacy $2 billion facility held by lenders who did not participate in the 2024 exchange offers.
  • The liens securing these loans rank pari passu with the 2024 First Lien Facilities. Consequently, collateral proceeds are shared ratably between the Amended Term Loans (approx. 1.78%) and the aggregate 2024 First Lien Facilities (approx. 98.22%) before the internal waterfall of the 2024 facilities is applied.
• Substitute Insurance Collateral Facility (SICA): The Company maintains a facility with 1970 Group, Inc. to support approximately $54.3 million in letters of credit for insurance deductibles. The Debtors' reimbursement obligations are secured by a $6.6 million cash escrow account.
• Equipment Financing: Approximately $3 million is owed to First Citizens Bank and CIT Bank for the financing of trucks and trailers.

Unsecured Debt

• Amended Unsecured Notes: PECF USS III is the issuer of approximately $133.0 million in 8.000% senior unsecured notes due 2029.
  • This balance represents the remaining obligations from an original $550 million issuance, following a significant reduction during the 2024 Recapitalization where most holders exchanged their positions for new secured debt.
• Trade and Other Unsecured Claims: As of the Petition Date, the Debtors owe approximately $87 million in accrued liabilities to vendors, landlords, utilities, and employees.

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Events Leading to Bankruptcy

Macroeconomic Headwinds and Market Contraction

• Beginning in 2022, the Company faced a convergence of adverse macroeconomic factors that eroded profitability and strained liquidity:
  • Inflationary pressures significantly increased operating expenses, specifically regarding fuel, maintenance, and labor inputs, while rising interest rates increased debt service costs on floating-rate obligations.
  • The Company’s reliance on the construction market—which accounts for over 70% of its revenue—became a liability as construction activity decelerated. Notably, housing production in key markets like San Francisco declined by 50% in 2022.
  • Reduced service volumes led to lower route density and operational inefficiencies, compounding the impact of narrowing margins. These factors ultimately triggered credit rating downgrades to CCC/Caa2 by late 2023.

2024 Recapitalization Transaction

• In response to early 2024 liquidity concerns, the Company engaged advisors and executed a comprehensive out-of-court recapitalization to address its capital structure:
  • To bridge the gap to the transaction closing, the Sponsor, Platinum Equity, provided a borrower-favorable bridge facility consisting of a $30 million initial term loan and a $30 million delayed-draw term loan.
  • The recapitalization closed in August 2024 with 94% participation from funded debtholders. The transaction successfully extended debt maturities to 2030, captured over $200 million in debt discount, and injected $300 million in new capital.
  • While the transaction provided temporary relief and covenant flexibility, certain institutional creditors, specifically CastleKnight, opted out of the exchange.

Persistent Market Weakness and Liquidity Constraints

• Despite the 2024 Recapitalization and operational improvements—such as enhanced safety records and streamlined back-office functions—financial performance continued to suffer due to prolonged market stagnation:
  • Expectations for a 2024 market recovery did not materialize; instead, residential construction activity declined further, with multi-family completions dropping 29% year-over-year.
  • Non-residential spending also weakened, falling 3% between January 2024 and October 2025, with specific segments like commercial storage and warehousing dropping by 14%.
• By June 2025, the Company projected a liquidity shortfall ahead of its September 2025 debt service obligations, necessitating further restructuring efforts.

Forbearance and Stakeholder Negotiations

• To preserve liquidity and facilitate negotiations, the Company entered into Forbearance Agreements in September 2025 with the support of the Ad Hoc Group and senior revolving lenders:
  • These agreements allowed the Company to forgo principal and interest payments due in late September 2025, providing essential breathing room to negotiate a comprehensive restructuring.
• The Company engaged in extensive negotiations to achieve a consensual resolution:
  • Discussions with the Ad Hoc Group—representing the majority of secured debt—proceeded constructively toward a prepackaged plan.
  • Simultaneous efforts to include CastleKnight in the restructuring proved difficult. Despite exchanging eight proposals and soliciting alternative financing options, CastleKnight refused the proposed terms and did not submit a counter-proposal for financing, leading the Company to proceed with the Ad Hoc Group's support.

Restructuring Support Agreement and DIP Financing

• On December 28, 2025, the Company executed a Restructuring Support Agreement (RSA) with its Sponsor and the Ad Hoc Group to implement a prepackaged Chapter 11 plan:
  • The Plan aims to eliminate over $2.4 billion in third-party funded debt and secure approximately $300 million in committed exit financing.
  • It also contemplates an equity capital raise of up to $480 million, fully backstopped by the Ad Hoc Group.
• To fund the Chapter 11 process, the Company secured a $120 million Debtor-in-Possession (DIP) facility, fully backstopped by the Ad Hoc Group.
  • The RSA includes provisions allowing CastleKnight to participate in the DIP backstop, equity rights offering, and exit facility on the same economic terms as the Ad Hoc Group, despite their prior holdout status.