💥A Logistical Nightmare💥
STG Logistics Inc. Finally Filed + an Office Properties Income Trust update.
💥New Chapter 11 Bankruptcy Filing - STG Logistics, Inc.💥
On January 12, 2026, the Dublin, Ohio-based STG Logistics, Inc. (“STG”) and sixty-four affiliates (collectively, together with STG, the “debtors” and together with their non-debtor affiliates, the “company”) filed post-LME … 😔 … cases in the District of New Jersey (Judge Hall). Formerly known as St. George Warehouse, the company focused on warehousing and consolidating/deconsolidating freight before being acquired by Wind Point Partners (“Wind Point”) in ‘16 and doing the PE-standard of embarking on a very strategic tear of acquisitions.
Initially those focused on a pure expansion of the OG business, but then COVID hit, demand soared and the company be like …
That’s right, between ‘20 and ‘22, the company’s revenue popped over 60% and, like so many other companies that have graced the “pages” of PETITION, the idiots at the helm of this turd became convinced that business was never coming back to earth, 🙄. Here’s CFO and first day declarant Tyler Holtgreven telling us about the obvious next step … cue the inevitable and predictable:
“To meet increasing demand, the Company acquired XPO Logistics Inc.’s (‘XPO’) intermodal business segment in March 2022 for approximately $700 million.”
And … uh … here he is two sentences later:
“Since March 2022, the trucking industry has faced one of its longest and deepest downturns in history, as excess capacity built during the pandemic years (based on high freight rates, cheap credit, and government stimulus), led to a collapse in freight rates and a years-long freight market depression dubbed the ‘Great Freight Recession’ by industry analysts.”
G-ddamn, a sh*t deal from day one?? For the company anyway. XPO on the other hand? Here’s a live shot of it looking back:
With bottom-barrel rates the new norm, the company couldn’t keep up with the competition and experienced liquidity challenges. To tackle those, in May ‘24, Wind Point, Oaktree Capital Management (“Oaktree”) and Duration Capital Partners (“Duration” and together with Wind Point and Oaktree, the “sponsors”) dropped in a $30mm check in exchange for covenant relief, which bought the company … um … *checks calendar* … four months. Adjusted EBITDA fell 95% YoY in 2Q’24.
In August ‘24, the company was back at the table with the sponsors, Antares Capital LP (“Antares”) as agent under a then-~$60mm revolver and ~$813mm term loan, and an ad hoc group of lenders, including Antares (the “‘24 ad hoc group”), which resulted in an October ‘24 LME. Under it, (i) the sponsors torched another $50mm in equity capital, 🤷, (ii) the company dropped substantially all of its assets down into an unrestricted subsidiary, STG Distribution, LLC (the “unsub”), (iii) the ‘24 ad hoc group extended new loans, guaranteed by the whole company, to the unsub, and (iv) the unsub lent cash to STG to pay off the lenders’ old loans under a first-lien intercompany credit agreement.
AKA, a double dip.*
Then the ‘24 ad hoc group invited everyone else to the party. On materially worse terms.
Anyway, here’s how the cap stack transmogrified:
Naturally, it did f*ck all to fix the underlying, still-sh*tty market circumstances. But it potentially rearranged the deck chairs.
Why potentially? Well, notice that there’s still a slice of the original 1L RCF and 1L term loans outstanding. Enter Siemens Financial Services, Inc. (“Siemens”) and Axos Financial, Inc. ($AX), which didn’t bite on the materially-worse-for-them offer. Instead, in January ‘25, they took the entire double dip to New York state court.
Siemens and AX had some success too. Nearly a year later, on January 3, 2026, the New York court declined to dismiss the litigation and let the case proceed.
So bankruptcy, although debtors’ counsel Kirkland & Ellis LLP’s (“K&E”) Pat Nash categorically denies any connection between the filing and the NY court decision:
“I can assure, Your Honor, that we have been at work on this restructuring for many months, and there was a state court ruling. The state court litigation remains alive in the wake of that ruling.”
That we 1,000% know to be true. No, not that the filing is unrelated to the court decision; that K&E has been running the clock working on it for many months.
Because the debtors enter chapter 11 with a fully-dressed restructuring support agreement (the “RSA”) in hand supported by the sponsors, an ad hoc group of holders of LME debt (the “ad hoc group”),** represented by Gibson, Dunn & Crutcher LLP (“GDC”) and Evercore Group L.L.C. (“Evercore”), and certain non-ad hoc group “… supporting lenders …,” which collectively hold 95%, 90%, 70%,*** and 31% of, respectively, the unsub revolver, first-lien first-out (FLFO) term loans, first-lien second-out (FLSO) term loans, and first-lien third-out (FLTO) term loans.
The plan is to push the debtors through bankruptcy and exit within 125 days … while respecting the double dip and allocating value accordingly (via a sale or an equitization of the DIP, FLFO, and FLSO claims + takeback debt).**** Therefore, the entire deal hinges on the court’s denying, dismissing, or otherwise ruling against Siemens and AX’s claims, which, if so, will receive their post-double-dip share of takeback debt.
So, yes, the cases started as and will continue to be a litigation festival.
To fund the burn, the ad hoc group backstopped a $293.75mm DIP term loan,***** composed of $150mm in new money ($85mm interim) and a roll-up of $143.75mm of the FLFO and FLSO term loan claims ($97.75mm on interim, the rest on final), which’ll be offered to holders of FLFO claims.******
To which Siemens and AX objected based on the entire LME having violated its prepetition credit agreement’s “sacred rights.” An argument that’s making the rounds.
Also objecting? Rejected DIP lender, RenWave Kore, LLC (“RenWave”). Its beef was easier to digest: it had offered a better deal 👇.
It didn’t matter. The debtors went with the ad hoc group’s DIP. Allegedly to avoid a priming fight but really it’s because the ad hoc group is in every tranche of the LME debt and they want their deal. Either way, it prompted a 3.75-hour start to yesterday’s first-day hearing, including argument and testimony from debtor-banker PJT Partners LP ($PJT)’s Thomas Higbie. About an hour and a half into the hearing, a woman who forgot she wasn’t on mute summed it up perfectly:
“Ugh, god, this is boring.”
She wasn’t wrong. After nearly four hours, the court finally took a short break … and then summarily approved the ad hoc group DIP.
While the debtors intend to market their assets over the course of the case to find the “highest and best” value, that’s now an easier target for the ad hoc group to hit. The day one DIP fees create a ~$13.2mm hurdle for other bidders, which, if the DIP is approved on a final basis, will increase another ~$10.1mm.
All according to plan. The second-day, which will be contested, is scheduled for February 10, 2026 at 10am ET. Somewhere along the way, the double dip issues will have to be hammered out too.
The debtors are represented by K&E (Patrick Nash, Jr., Yusuf Salloum, Ashley Surinak) and Cole Schotz, P.C. (Michael Sirota, Warren Usatine, Felice Yudkin, Daniel Harris) as legal counsel, AlixPartners LLP (Jason Keyes) as financial advisor, and PJT (Thomas Higbie) as investment banker. The debtors’ special committee is composed of David Barse and is represented by White & Case LLP (Andrew O’Neill, Greg Pesce, Samuel Hershey, Laura Baccash, Barrett Lingle, Devin Rivero) as legal counsel. The ad hoc group is represented by GDC (Scott Greenberg, Jason Goldstein, Rob Fitzgerald, Matthew Williams, Simon Briefel, Jonathan Dunworth) and Porzio, Bromberg & Newman, P.C. (Rachel Parisi, Robert Schechter, Christopher Mazza) as legal counsel and Evercore (Avinash D’Souza, Evan Levine) as financial advisor. Antares is represented by Davis Polk & Wardwell LLP (Adam Shpeen, Brian Resnick, Elliot Moskowitz, Stephanie Massman, Adam Greene) and Greenberg Traurig, LLP (Alan Brody) as legal counsel. Wind Point, as equity holder, is represented by Ropes & Gray LLP (Matt Roose, Conor McNamara) and Duane Morris LLP (Morris Bauer, Drew McGehrin) as legal counsel. Duration and Oaktree, as equity holders, are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP (Brian Hermann, Jacob Adlerstein, Xu Pang) and Duane Morris LLP (Morris Bauer, Drew McGehrin) as legal counsel. RenWave is represented by Sidley Austin LLP (Patrick Venter, Jon Muenz, Ryan Fink) and Fox Rothschild LLP (Joseph DiPasquale, Michael Herz, Agostino Zammiello) as legal counsel. A ad hoc group of minority FLSO and FLTO holders is represented by King & Spalding LLP (Michael Handler) as legal counsel.
*Because the ‘24 ad hoc group received two claims against the company for every claim that non-participating lenders held. One through its loan to the unsub and another through the unsub’s loan to the rest of the company. If you need a primer, Johnny’s BFF, King & Spalding LLP’s Michael Handler, who made an appearance at the first day, wrote two guest columns on ‘em here and here.
**Per docket 80, the ad hoc group is composed of (i) Antares, (ii) Fidelity Management & Research Company, LLC, (iii) Fortress Credit Advisors LLC, (iv) Invesco Senior Secured Management, Inc., (v) ISQ Infrastructure Credit Fund U.S. Pooling II, L.P., (vi) PennantPark Investment Advisers, LLC, and (vii) Prospect Capital Corporation.
***At the first-day hearing, K&E told the court this 70% figure is probably closer to 82% now.
****If the equitization occurs, the DIP will receive 57.5% of the reorg equity, the FLSO claims will receive 40.0%, and FLSO claims will receive 2.5%.
*****The DIP bears interest at 8% PIK and has a 5.5% PIK backstop fee, a 5% PIK commitment fee, and a 5% PIK exit fee, each of which will be waived or canceled if the RSA deal closes without a hitch.
******Kinda. Under the subscription process, participating FLFO claimholders have to agree to offer up to 10% of their right to participate to holders of FLSO claims.
⚡Update: Office Properties Income Trust ($OPITS)⚡
Let’s revisit the “prearranged” chapter 11 cases of Office Properties Income Trust ($OPITS) (“OPI”) and its seventy-two affiliates (together with OPI, the “debtors”), which filed in October ‘25 in the Southern District of Texas (Judge Lopez) and we covered in mid-November.
If you don’t recall and didn’t bother to refresh with that link ☝️, “prearranged” don’t mean “consensual.” Far from it. This debt stack …
… gave rise to these profs …
… and a first-week lawsuit against UMB Bank, N.A. (“UMB”), as March ‘27 indenture trustee, to determine whether a then-$76.4mm in original issue discount (“OID”) is disallowable as unmatured interest.
A “problem” that, during the pendency of the bankruptcy, could very well fix itself to the tune of ~$5mm per month if the applicable debtors — the March ‘27 notes obligors — are as solvent as the debtors have suggested.
Accordingly, at the November 3, 2025 first-day hearing, (i) sh*t got heated on account of the debtors’ and the undersecured September ‘29 Ad Hoc Group’s flying a 🖕 in the direction of the March ‘27 Ad Hoc Group by having the latter group’s obligors effectively fund the cases, and (ii) at the debtors’ request, Judge Lopez pulled in Judge Isgur to serve as mediator to bridge gaps while simultaneously pressing pause on the UMB suit.
It’s been over two months. Where do things stand now? Is everybody singin’ kumbaya?
LOL, puh-lease.
After the debtors kicked the second-day from December 3 to December 16, 2025 and, on that later date, the final DIP hearing out to January 27, 2026 (later punted another day to January 28 at 9am CT), Judge Isgur pulled a Murtaugh …
… and gave up entirely.* A whole lotta nada got done.
Although that hasn’t stopped a subset of folks — the debtors, the official committee of unsecured creditors (the “UCC”), represented by Willkie Farr & Gallagher LLP (Brett Miller, Paul Labov, Todd Goren, James Burbage, Jennifer Hardy) as legal counsel and Alvarez & Marsal North America, LLC (Mark Greenberg) as financial advisor, the September ‘29 Ad Hoc Group, and the Unsecured Ad Hoc Group — from jumping into a separate mediation, which’ll presumably be focused on buying off the UCC.
In any event, after the initial mediation ended, it was time to restart the OID bickering. The most recent issue? Scheduling 🙄. Let’s hand it to Latham at a January 7, 2026 hearing in the adversary proceeding:
“Back in mid-November, we sent around, we the debtors sent around a case management schedule that called for a trial on this OID case, unmatured interest case under 502(b), for mid-March, 2026. As Your Honor may recall, shortly thereafter, there was an abatement or a stay ordered in these proceedings wisely …”
“… to allow time for mediation. We learned not too long ago from Judge Isgur that the mediation was unsuccessful. On December 31, we sent around a revised schedule. It was naturally more compressed because the end of the runway remains the same, but the time to get things done was different.”
We’ll save you the back and forth. It wasn’t interesting.
Judge Lopez’s availability dictated the outcome, which split the baby by about a month on each side. The parties will go to trial April 20-22, 2026, which should wind up being around the same time as the confirmation hearing on the debtors’ chapter 11 plan (disclosure statement here) and reflects the prepetition RSA with the September ‘29 Ad Hoc Group:
It all means a lot of litigation to come. Which brings us to our closing remark.
At what point will the costs of these cases eat away all the savings the debtors hope to achieve. At that same January 7 hearing, we couldn’t help but laugh (and cry) at this Latham quote:
“… [T]here’s only a certain amount of cash and recoveries in a chapter 11 case. You know, one of the reasons that we’re trying to push to get this done as the fiduciary for all stakeholders is that, listen, the longer this ticks on and, you know, OID accretes, you know, the less there is to argue about because then the OID is accreting and, you know, frankly, that’s more cash that, you know, is, you know, just going to have to go out the door.”
Cash out the door, fiduciary for all stakeholders!
That’s why, in filing “prearranged” cases designed to shave off $76.4mm in OID, the debtors’ professionals gobbled up, per their retention applications,** ~$21.3mm in payments within ninety days of filing. And the initial DIP budget contemplated an additional $31mm in professional fees through the first thirteen weeks.
Given the OID trial date, the cases will have to endure one more thirteen-week period. Seems reasonable, to us anyway, that total costs will piss away that value before it’s all said and done.
As mentioned above, the final DIP hearing is scheduled for January 27, 2026 at 2:30pm CT. The March ‘27 Ad Hoc Group has until January 19 to file its objection.
*Maybe Judge Isgur isn’t too old for this sh*t. At a December 9, 2025 hearing, Judge Lopez put a December 23, 2025 outside date on the first mediation. But you know who was too old for that sh*t? The debtors’ managing trustee, Jennifer Clark, who tossed in the towel and retired as of December 31, 2025.
**Latham, Hunton Andrews Kurth LLP, Quinn Emanuel Urquhart & Sullivan, LLP, AlixPartners LLP, and Moelis & Company LLC.
🏥Correction: Genesis Healthcare, Inc.🏥
In Sunday’s coverage, we erroneously attributed a quote to debtors’ counsel, Daniel Simon, instead of Nicholas Zluticky for the official committee of unsecured creditors. The speaker didn’t identify himself at the time, so Johnny’s wires got crossed. Apologies for the error, which has been addressed.
📚Resources📚
We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.
📤 Notice📤
Ben Wagoner (Associate) joined Ice Miller LLP from Ropes & Gray LLP.
Frank Cottrell (Director) joined Paladin Partners from Riveron.
Liz Boydston (Partner) joined Thompson Coburn LLP from Gutnicki LLP.
Richard Collura (Senior Managing Director) joined Ankura Consulting from AlixPartners LLP.
Talia Wagner (Partner) joined Barnes & Thornburg LLP from Morris Manning & Martin LLP.
🍾Congratulations to…🍾
Andrew Butler on his promotion to Partner at Jones Day.
Andrew Minear on his promotion to Partner at Fried Frank.
Ken Listwak on his promotion to Counsel at Troutman Pepper Locke LLP.
Kimberly Schiffman on her promotion to Counsel at Alston & Bird LLP.
Lisa Lansio on her promotion to Managing Director at Portage Point Partners.
Martha Martir on her promotion to Counsel at Togut Segal & Segal LLP.
Noelle Torrice on her promotion to Partner at Benesch.
Peter Gnatowski on his promotion to Managing Director at Lincoln International.
Caplin & Drysdale (Allegra Kauffman, Todd Phillips, James Wehner) for securing the legal mandate on behalf of the official committee of asbestos claimants in The Stephan Co. chapter 11 bankruptcy case.
Dentons US LLP (Samuel Maizel, Tania Moyron) for securing the legal mandate on behalf of the official committee of unsecured creditors in Oroville Hospital chapter 11 bankruptcy cases.
Jenner & Block LLP (Catherine Steege, Melissa Root) and Pashman Stein Walder Hayden, P.C. (Joseph Barsalona II, Alexis Gambale) for securing the legal mandate on behalf of the official committee of unsecured creditors in Conscious Content Media, Inc. chapter 11 bankruptcy cases.
Porzio, Bromberg & Newman, P.C. (Rachel Parisi, Christopher Mazza, Jenny Zhou) and Dykema Gossett PLLC (William Hotze, Dominique Douglas) for securing the legal mandate on behalf of the official committee of unsecured creditors in Conscious Content Media, Inc. chapter 11 bankruptcy cases.
Potter Anderson & Corroon LLP (Aaron Stulman, Katelin Morales, Sarah Gladieux) for securing the legal mandate on behalf of the official committee of unsecured creditors in FlexShopper, Inc. chapter 11 bankruptcy cases.
Robinson & Cole LLP (Evan Lazerowitz, Rachel Jaffe Mauceri, Jamie Edmonson) for securing the legal mandate on behalf of the official committee of unsecured creditors in Food52, Inc. chapter 11 bankruptcy cases.
SOLIC Capital Advisors (Neil Luria) for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in the SpiriTrust Lutheran chapter 11 bankruptcy cases.
Vartabedian Hester & Haynes LLP (Jeff Prostok, Lynda Lankford, MT Stanberry, Candice Carson) for securing the legal mandate on behalf of the official committee of unsecured creditors in Zynex, Inc. chapter 11 bankruptcy cases.
You boys are doing gods work