Dive Brief:
- STG Logistics filed for Chapter 11 bankruptcy to restructure debt and reorganize operations via a “restructuring support agreement,” the company announced in a Jan. 12 press release. The company’s voluntary petition said it had over $1 billion in both assets and liabilities.
- The move eliminates roughly 91% of the company’s debt and provides $150 million in new capital, allowing the logistics service company to continue operating, per the release.
- “We are confident that leveraging the chapter 11 process will best position the business for long-term growth and success,” CEO Geoff Anderman said.
Dive Insight:
Dublin, Ohio-based STG Logistics has grown rapidly through acquisitions including its purchase of Best Dedicated Solutions in 2023 and the intermodal segment of XPO Logistics for $710 million in 2022.
But in the years that followed, STG Logistics has weathered a prolonged period of weak freight demand that drained many carriers’ finances and has led some trucking companies to shut down or file for bankruptcy.
Anderman said the reorganization strengthens the company, which is working though “one of the most severe freight recessions in history.”
STG Logistics said it voluntarily initiated a prearranged court-supervised reorganization process under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey.
In addition to reducing its debt, the reorganization also aims to strengthen its balance sheet, according to the release.
Furthermore, the company intends to use up to $150 million of new money debtor-in-possession financing to support its business operations during the bankruptcy process.
STG Logistics said it will continue operating during the bankruptcy proceedings. The company filed various motions, which if approved by the court, will enable it to pay employee wages and benefits, maintain services and pay vendors.
Anderman said in a LinkedIn post that the reorganization is an incredibly important step for the company.
“It is business as usual across STG Logistics, and the work underway has no impact on our ability to continue delivering for our customers, vendors, and partners at the highest levels,” he said.
