đ˝New Chapter 11 Bankruptcy Filing - United Site Services, Inc.đ˝
Porta-potty company aims to flush its debt stack in chapter 11; one turd refuses to go down
A year ainât âŚ
⌠unless and until Milbank LLPâs (âMilbankâ) Andy Leblanc and Quinn Emanuel Urquhart & Sullivan LLPâs (âQuinnâ) Ben Finestone square off in a chapter 11. â24 gave us Intrum AB, and just in the nick of time, on December 29, 2025, United Site Services, Inc. (âUSSâ) and twenty-one affiliates (collectively, together with USS, the âdebtorsâ) delivered by filing âprepackagedâ chapter 11 cases in the District of New Jersey (Judge Kaplan).
Before we dive into the beef, the debtorsâ business ⌠itâs, uh, a literal đŠ-co.
The enterprise rents out porta-potties and related products to the Super Bowl, the Federal Emergency Management Agency, music festivals, homebuilders, and the construction market.
Indeed, the debtors are â⌠the United Statesâ largest provider of portable sanitation systems and related âsite servicesâ âŚ,â with the construction market accounting for 70%+ of their revenue.* Their business was built through ~134 roll-up acquisitions of existing, local service providers dating back to 2010. In â17, Platinum Equity Advisors LLC (âPlatinumâ) stepped in as sponsor, and in November â21, a Platinum continuation vehicle, funded by Fortress Investment Group (âFortressâ), Ares Management Corp. ($ARES) and Blackstone Inc. ($BX), took it off the prior Platinum fundsâ hands in a deal valuing the business at ~$4b.
Around the same time, the debtors entered into pertinent financing arrangements: (i) a $200mm ABL facility with Bank of America, N.A., (ii) a credit agreement now agented by UMB Bank, N.A. that provided a $200mm term loan (the âamended term loansâ) and $100mm revolver, and (iii) the issuance of $500mm in senior unsecured notes due â29 (the âsenior unsecured notesâ). That set the stage for a whole bunch of ...
The very next year, the debtorsâ started facing challenges: inflation, supply costs âŚ
⌠wages, a slow down in construction, đĽą, all impacted their bottom (line), eroded profitability, and culminated, in late â23, in ratings agencies downgrading the debtors to CCC/Caa2.
In early â24, the debtors realized the business was performing like âŚ
⌠and they wouldnât be able to service their debt and retained Milbank as counsel and PJT Partners LP ($PJT) as investment banker â⌠to explore options to address [their] financial issues and obtain new capital to support the ongoing operational turnaround.â
Over the following months, during which Platinum offered interim-and-now-repaid bridge financing, the debtors engaged with an ad hoc group (the ââ24 ad hoc groupâ) on the terms of a deal. In July â24, terms formed, and in August and September â24, the debtors pushed out an LME. Hereâs the relief it provided, courtesy of first-day declarant and Alvarez & Marsal North America, LLC-MD Chris Kelly:
âIn the aggregate, the 2024 Recapitalization resulted in the following capital structure:
$300 million of new capital as First-Out Term Loans;
$1.90 billion of Amended Term Loans exchanged into $1,795 million of new Second-Out Term Loans (with $46 million in Amended Term Loans remaining);
$417 million of Amended Unsecured Notes exchanged into (a) $131 million of First-Out Term Loans and First-Out Notes and (b) $194 million of Third-Out Notes (with $133 million in Amended Unsecured Notes remaining);
Pre-transaction revolving loans, after a $25 million repayment, were exchanged into new First-Out Revolving Loans, with extended maturity; and
Pre-transaction revolving loans under an asset-based loan facility were
exchanged into the ABL Facility with extended maturity.â
Or to chart it for yâall as of the petition date:**
Naturally, though, the â24 ad hoc group had motivations aside from purely helping the company weather the storm and cut a better deal for itself. Its members only took a 5% discount on their amended term loans and a 21.9% discount on their amended unsecured notes. Meanwhile, everyone else swallowed discounts of, respectively, 18% and 22.9%.
Everyone other than CastleKnight Management LP (âCastleKnightâ). CastleKnight held out, owns essentially all of the unexchanged debt, and argues the transaction violated its âsacred rightsâ under the amended term loanâs credit agreement because it subordinated or, more importantly, had the effect of subordinating its claims, liens, and the value of its guaranties and, therefore, the purported intercreditor agreement entered into in connection with the deal â and to which it is otherwise subject â was DOA. Weâll return to that.
Anyway, ⥠shockingly âĄ, the LMEâs âexpertâ projections, đ, didnât pan out:
âThe economic challenges USS faced in 2022 and 2023 showed promise of abating around the time of the 2024 Recapitalization. In fact, the market outlook in mid-2024 suggested that total construction starts were expected to increase by approximately 10% in 2024, driven by strong residential and public works activity.
Unfortunately, the market projections did not materialize, and construction activity stalled at the end of 2024 and continued to decrease through 2025. Most significantly, residential construction activity declined steeply with multi-family completions down 29% year-over-year and privately owned housing units under construction down by 15% year-over-year in USSâs major markets. Non-residential construction activity was slightly more resilient, but also lower, with spending down 3% from January 2024 to October 2025, and spending related to a subset of non-residential construction including shopping centers, commercial stores, warehouses, and storage centers falling by 14% over the same period.â
Platinum and its continuation vehicle partners were all like:
So in â25, the debtors got back at it with a new ad hoc group (the âad hoc groupâ), which includes the members of the â24 ad hoc group and is represented by Akin Gump Strauss Hauer & Feld LLP (âAkinâ) as counsel and Centerview Partners LLC (âCenterviewâ) as investment banker, and they negotiated themselves yet another deal, reflected in a December 28, 2025 (i.e., the petition date) restructuring support agreement (the âRSAâ). The RSA provides:
đDIP Facility. A $120mm DIP ($62.5mm interim), fully backstopped by members of the ad hoc group, to fund the cases. The DIP carries interest at term SOFR (2% floor) + 7.75% and features a 2% PIK upfront fee and a 7.5% PIK backstop fee.
đRefinanced ABL and Revolving Facilities. A full paydown of the debtorsâ ABL and revolving credit facilities through a new $195mm ABL and new $100mm revolver.
đRestructuring. Under an ad hoc group-approved chapter 11 plan and disclosure statement, the first-out notes and first-out terms loans will be repaid in full, the second-out term loans will receive 98.2% of pre-dilution reorg equity and 98.2% of the subscription rights in the ERO, and the amended term loan claims (i.e., CastleKnight) will receive ~$10.5mm in cash, 1.8% of pre-dilution reorg equity, and 1.8% of the ERO subscription rights. For those last two, the debtors project the recovery at ~27%. Meanwhile, GUCs will split up $5mm for a 0.3% take-home.
đEquity and Debt Exit Financing. The deal also finances go-forward ops; specifically, (i) up to $480mm of cash through an equity rights offering (the âEROâ), backstopped by members of the ad hoc group for an 8% fee payable in dilutive reorg equity, and (ii) a $300mm exit term loan provided by the members of the ad hoc group.
đPlatinum Tax Structuring Cooperation. To prevent the deconsolidation of USSâs federal income tax group and corresponding taxes, the RSA contemplates the use of $5.5mm of the ERO to purchase Platinumâs equity interests in an affiliated, topco non-debtor.
đTimeline. In a word, blazing fast. In a few more, 44 days from filing to confirmation. Here are the relevant dates:
So far, those dates have stuck. TBD on whether thatâll be the case come February because, on December 29, 2025, CastleKnight, represented by Quinn, objected to the debtorsâ first-day relief to preview its forthcoming confirmation objections*** and tease an adversary proceeding to challenge the â24 LME and â⌠adjudicate [CastleKnightâs] first lien security interest in substantially all of the Debtorsâ assets.â
That led directly to a 4.25-hour first-day hearing on December 30, 2025. Truthfully, though, aside from passing, testy jabs from Messrs. Leblanc and Finestone toward one another âŚ
âMr. Finestone: [Mr. Leblanc] says my â he canât believe â he insulted me personally. He said he canât even believe Iâm making the argumentsâŚ
Mr. Leblanc: With all due respect to Mr. Finestone, weâll obviously decide what we think. Weâll advise our client what we think is best for the debtor and the debtor in possession âŚââ
⌠and the US trustee (the âUSTâ) questioning whether the cases are even prepacks (spoiler alert: they ainât) âŚ
âThis is a partially pre-negotiated case. It doesnât seem like itâs a true prepack as thereâs not an indication of how many creditors will vote to accept the plan. The debtors solicited acceptances of the plan pre-petition by only one day, December 28thâŚâ
⌠most of the hearing was posturing, the previewing of upcoming arguments and litigation, and CastleKnightâs outrage that the debtors werenât keen on funding its legal expenses to litigate against their own bankruptcy process.
Because it was the first-day, Judge Kaplan didnât bite on the fee request, approved all requested relief after incorporating minor revisions from the UST, and scheduled the second-day hearing for February 3, 2026 at 10am ET, to be followed by the confirmation hearing on February 10, 2026 at 10am ET.
In the interim, CastleKnight will presumably get its complaint on file and the debtors will attempt to stay the litigation entirely. Or maybe not. The court practically begged for another outcome:
âIâm going to direct the parties because I think if we can avoid litigation and the filing of adversary complaints and the discovery that will be attendant to it and the motion practice and everything that we all see in every case â it just puts more dollars in everybodyâs pockets rather than wasting it â Iâm going to direct the parties to speak, meet, and confer as to whether or not they can agree to mediate and on a mediator. Iâm thinking of a one-day mediation just to see if there can be a resolution ⌠So what I will do is simply ask if by the middle of next week, close of business on Wednesday, just if the parties can advise the court â Iâll ask debtor counsel to report back to the court and chambers â just whether or not the parties have been able to agree on the process and on a mediatorâŚ
This court cannot stress its preference for the parties to undertake mediation in the short term, in the near term, and will follow up with the parties next week âŚâ
That Wednesday deadline is today.
Anyway, regardless of what happens between the debtors and the ad hoc group, on the one hand, and CastleKnight, on the other, Fortress, ARES, and BXâs recoveries have been fully digested and flushed:
To the surprise of literally no one, X had a total field day.
Yes indeed:
The debtors are represented by Milbank (Dennis Dunne, Samuel Khalil, Matthew Brod, Andrew Leblanc, Lauren Doyle, Benjamin Schak) and Cole Schotz P.C. (Michael Sirota, Felice Yudkin, Daniel Harris) as legal counsel, Alvarez & Marsal North America, LLC (Chris Kelly) as financial advisor, and PJT (Avram Robbins, Josh Abramson) as investment banker. The ad hoc group. The ad hoc group is represented by Akin (Dan Fisher, Scott Alberino, Zach Lanier, Amelia Danovitch) as legal counsel and Centerview as investment banker. CastleKnight is represented by Quinn (Ben Finestone, Kate Scherling, Ankitha Mandava) and Rolnick Kramer Sadighi LLP (Mark Kramer, Richard Bodnar, Nicole Castiglione) as legal counsel. Ad hoc group member Clearlake Capital Group is represented by Kirkland & Ellis LLP (Steven Serajeddini, Nicholas Adzima) as legal counsel. Certain (undisclosed) first-out lenders are represented by Cleary Gottlieb Steen & Hamilton LLP (Joshua Brody) as legal counsel. Bank of America, N.A., as prepetition ABL agent, is represented by Greenberg Traurig, LLP (Alan Brody, Charlie Liu) and Cahill Gordon & Reindel LLP (Joel Moss, Stu Downing, Elizabeth Yahl, Jordan Wishnew, Matthew Catone) as legal counsel and FTI Consulting, Inc. ($FCN) as financial advisor. Platinum is represented by Latham & Watkins LLP (Keith Simon) as legal counsel. Wilmington Savings Fund Society, FSB, as DIP agent, is represented by ArentFox Schiff LLP (Jeffrey Gleit, Justin Kesselman, Matthew Bentley) as legal counsel. BOKF, NA, as successor notes trustee, is represented by Kelley Drye & Warren LLP (James Carr, Kristin Elliott) as legal counsel. UMB Bank, N.A., as successor agent under the amended term loan credit agreement, is represented by Benesch, Friedlander, Coplan & Aronoff LLP (Seth Kleinman, Robin Evans, Kevin Capuzzi) as legal counsel.
*The debtors never disclose their exact revenue figures, but the DIPâs 13-week cash flow forecasts projects $196.8mm in operating receipts â and net cash flow of ($47mm) â through the first thirteen weeks.
**The transaction also featured a âdouble dipâ structure, but the debtorsâ proposed chapter 11 plan ignores it to avoid a sh*t ton more litigation that wouldâve precipitated, so weâll gladly do the same. No doubt reverting to that structure will be used as a stick during negotiations with CastleKnight.
***Which will include an absolute priority violation on account of the sponsor paycheck and a gerry-mandering argument based on the amended term loans and amended unsecured notes being dumped into classes with LME debt.
Company Professionals:
Legal: Milbank LLP (Dennis Dunne, Samuel Khalil, Matthew Brod, Andrew Leblanc, Lauren Doyle, Benjamin Schak) and Cole Schotz P.C. (Michael Sirota, Felice Yudkin, Daniel Harris)
Financial Advisor: Alvarez & Marsal North America, LLC (Chris Kelly)
Investment Banker: PJT Partners LP ($PJT) (Avram Robbins, Josh Abramson)
Claims Agent: Verita (Click here for free docket access)
Other Parties in Interest:
Ad Hoc Group: Apollo Capital Management, L.P., Canyon Capital Advisors LLC and Canyon CLO Advisors LP, Clearlake Capital Group, L.P., Oaktree Capital Management, L.P., Searchlight Capital Partners, L.P., Sixth Street Partners, LLC
Legal: Akin Gump Strauss Hauer & Feld LLP (Dan Fisher, Scott Alberino, Zach Lanier, Amelia Danovitch)
Financial Advisor and Investment Banker: Centerview Partners LLC
Ad Hoc Group Member: Clearlake Capital Group
Legal: Kirkland & Ellis LLP (Steven Serajeddini, Nicholas Adzima)
Certain First-Out Lenders
Legal: Cleary Gottlieb Steen & Hamilton LLP (Joshua Brody)
Sponsor: Platinum Equity Advisors LLC
Legal: Latham & Watkins LLP (Keith Simon)
DIP Agent: Wilmington Savings Fund Society, FSB
Legal: ArentFox Schiff LLP (Jeffrey Gleit, Justin Kesselman, Matthew Bentley)
DIP Fronting Lender: Barclays Bank plc
Legal: Katten Muchin Rosenman LLP
Prepetition ABL Agent: Bank of America, N.A.
Legal: Greenberg Traurig, LLP (Alan Brody, Charlie Liu) and Cahill Gordon & Reindel LLP (Joel Moss, Stu Downing, Elizabeth Yahl, Jordan Wishnew, Matthew Catone)
Financial Advisor: FTI Consulting, Inc. ($FCN)
Successor Notes Trustee: BOKF, NA
Legal: Kelley Drye & Warren LLP (James Carr, Kristin Elliott)
Amended Term Loan Credit Agreement Successor Agent: UMB Bank, N.A.
Legal: Benesch, Friedlander, Coplan & Aronoff LLP (Seth Kleinman, Robin Evans, Kevin Capuzzi)
Largest Lender and Objector: CastleKnight Master Fund LP
Legal: Quinn Emanuel Urquhart & Sullivan LLP (Ben Finestone, Kate Scherling, Ankitha Mandava) and Rolnick Kramer Sadighi LLP (Mark Kramer, Richard Bodnar, Nicole Castiglione)