STG Logistics: From Lender Fight to a Consensual Recapitalization Plan

The STG Logistics chapter 11 case has moved from a contested first-day financing fight to a substantially consensual reorganization. STG Logistics, Inc. and its debtor affiliates filed their petitions on January 12, 2026 in the U.S. Bankruptcy Court for the District of New Jersey under lead case number 26-10258, and the case reached a confirmation hearing on May 18, 2026 on the Second Amended Joint Plan of Reorganization. What began as an asset-intensive intermodal and drayage platform entering court with a priming DIP facility and an aggressive milestone calendar has resolved into a lender-led recapitalization, with the litigation that shadowed the case settled inside the plan.

The path to confirmation ran through a 100-day marketing process that produced no buyer willing to top the lender deal, a global mediation that brought the official committee on side, and a $12 million settlement that ended the lender litigation over the October 2024 liability management transaction. STG had entered chapter 11 following debt-deal litigation with excluded lenders. All five voting classes accepted the plan, leaving a narrower set of confirmation objections — the U.S. Trustee on third-party releases, the Chubb sureties, the New Jersey Department of Labor, and a personal-injury claimant — for the court to resolve.

Debtors	STG Logistics, Inc. (40 jointly administered entities)
Court	U.S. Bankruptcy Court, District of New Jersey
Case Number	26-10258
Petition Date	January 12, 2026
Judge	Hon. Mark Edward Hall
Confirmation Hearing	May 18, 2026 (Second Amended Joint Plan)
Business	Integrated port-to-door logistics platform spanning intermodal, drayage, over-the-road, CFS/transloading, and contract logistics
Prepetition Funded Debt	Approximately $1.159 billion
DIP Facility	Up to $293.75M, including up to $150M new money and a $143.75M roll-up; 8.00% PIK
Plan Path	Lender-backed Recapitalization Transaction; reorganized enterprise value approximately $452M
Claims Agent	Epiq Corporate Restructuring, LLC

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From Priming DIP to a Recapitalization Plan

STG entered chapter 11 with a restructuring support agreement and a deliberately fast clock. The DIP motion describes an RSA executed on January 12, 2026 that contemplated a "toggle" — the debtors could pursue either a recapitalization with equitization and takeback debt or a sale of substantially all assets after a market check. The DIP facility, with total commitments up to $293.75 million, was the framework for keeping the platform stable while that choice played out.

The DIP package combined up to $150 million of new money with a $143.75 million roll-up of prepetition first-lien claims. New money came in tranches — $85.0 million at interim approval, $40.0 million at final approval, and up to $25.0 million of incremental capacity available immediately before plan effectiveness — while the roll-up funded $97.75 million at interim and $46.0 million at final. The DIP motion describes pricing of 8.00% per annum payable in kind, and the final DIP order ties termination to the earliest of a six-month horizon from interim approval, a sale of substantially all assets, plan effectiveness, or acceleration.

By April 24, 2026 the toggle had resolved. The debtors filed a notice electing to proceed with the Recapitalization Transaction rather than a sale, ending a court-supervised marketing process that ran from the petition date through that date. The confirmation memorandum describes the recapitalization as a market-tested, ad hoc group-supported transaction designed to substantially deleverage the company, fund plan distributions and go-forward operations, and preserve jobs. STG framed the step as advancing toward a fully consensual emergence built around a debt reduction of more than $1 billion and a $150 million capital infusion.

The debtors filed their original joint chapter 11 plan and disclosure statement on March 13, 2026, a First Amended Joint Plan and amended disclosure statement on April 14, 2026, and the Second Amended Joint Plan of Reorganization on May 16, 2026. The confirmation hearing was set for May 18, 2026, with final approval of the disclosure statement to be considered at the same hearing.

The 100-Day Marketing Process and Plan Valuation

PJT Partners, the debtors' investment banker, ran the marketing process that resolved the RSA toggle. Thomas Higbie, a partner in PJT's restructuring group, testified in a declaration supporting confirmation that the 100-day, court-supervised process reached 60 initial parties — 13 strategic buyers and 47 financial sponsors — plus 8 additional inbound parties. The outreach generated nine preliminary indications of interest, but none was higher or better than the Recapitalization Transaction, so the debtors elected to forgo an auction.

Higbie's valuation testimony also supplies the plan's economic backbone. PJT estimated the reorganized company's post-effective-date enterprise value at approximately $452 million and equity value at approximately $260 million. That valuation flows from the negotiated plan treatment under which $50 million of the $150 million of DIP new-money claims converts into 19.2% of the reorganized equity. The post-emergence capital structure is expected to include roughly $100 million of takeback debt and approximately $92 million of takeback equipment-financing debt, alongside an exit revolving credit facility.

Jason Keyes of AlixPartners, the debtors' financial advisor, testified in a confirmation declaration that the recapitalization is funded through several mechanisms — the exit RCF facility, takeback term loans, and takeback equipment-financing debt — with the DIP facility supplying case liquidity. Keyes attested that the RSA drew support from consenting sponsors and supporting lenders holding significant percentages of the STG Distribution revolving facility and term loans.

Prepetition Capital Structure and the First-Out/Second-Out Stack

The reorganization restructures a capital stack that the first day declaration describes as roughly $1.159 billion of prepetition funded debt, excluding intercompany obligations. The October 2024 refinancing created two principal debt silos, and the lien-priority tranching within them shaped who controlled the case.

On the STG Distribution side, the first day declaration describes approximately $25 million of first-out revolving letters of credit, about $209 million of first-lien first-out (FLFO) term loans, about $669 million of first-lien second-out (FLSO) term loans, and about $101 million of first-lien third-out (FLTO) term loans. On the Reception Purchaser side, the declaration identifies approximately $2 million under a revolver, about $56 million under a term loan facility, and roughly $96 million of capital leases and equipment financing. The October 2024 refinancing moved collateral into newly formed STG Distribution entities and included roughly $137 million of new money in the FLFO tranche — the transaction that became the foundation of the minority-lender dispute.

The tranche structure carried directly into plan economics. Under the Second Amended Joint Plan, the senior first-lien classes — FLFO, FLSO, FLTO, and Reception Purchaser first-lien claims — receive a mix of takeback debt and reorganized equity. The amended disclosure statement does not estimate recovery percentages for those senior tranches, stating that the figures were withheld to avoid prejudicing the marketing process. The disclosed equity allocation provides that holders of Class 4 FLSO term loan claims receive their pro rata share of 2.5% of the reorganized equity, subject to dilution by the management incentive plan and an allocation condition.

Settlements That Resolved the Lender Litigation

The case's defining conflict was litigation by minority lenders Axos Financial and Siemens Financial Services over the October 2024 liability management transaction. The interim DIP objection and the final DIP objection framed the dispute as whether favored lenders had used an unrestricted-subsidiary structure to move collateral and value while stripping excluded lenders of pro rata rights, and whether the chapter 11 financing package compounded that injury through a selective roll-up. The final DIP order preserved that fight, providing that nothing in the DIP findings would have preclusive effect against Axos or Siemens.

The Second Amended Joint Plan resolves the litigation through two settlements, the step that cleared the final obstacle to a consensual chapter 11 exit. Keyes's confirmation declaration describes the Reception Purchaser Settlement — among the debtors, the ad hoc group, Antares, and the non-participating holders — which provides for a $12 million payment to non-participating holders, withdrawal of claims in the non-participating holder litigation, dismissal of the Illinois and New York actions with prejudice, and broad mutual releases. The Committee Settlement, reached in mediation with the ad hoc group and the official committee, provides for payment in full of critical vendors and go-forward landlords, creation of a convenience claim class, and a release of preference claims by the debtors.

The release provisions rest on an independent investigation. David M. Barse, the independent supervisor and sole member of the special committee for the Reception entities, testified in a confirmation declaration that he oversaw an investigation reviewing more than 116,000 documents and interviewing 10 individuals. The investigation examined potential claims tied to the October 2024 refinancing, the XPO, Frontline, Clear Lane, and BDS acquisitions, insider payments, and related-party agreements. Barse concluded that the debtors do not hold viable estate claims of significant net value that should be carved out of the plan releases, and that both settlements are in the best interests of the estates.

Voting Results and Confirmation Objections

Solicitation closed on a May 15, 2026 voting and opt-out deadline, against an April 8, 2026 record date. Emily Young of Epiq Corporate Restructuring testified in a solicitation and tabulation declaration that Epiq served 1,253 ballots and received 471. The confirmation memorandum reports that all five voting classes accepted the plan: Class 3A (FLFO RCF claims), Class 3B (FLFO term loan claims), Class 3C (Reception Purchaser first-lien claims), and Class 4 (FLSO term loan claims) each accepted at 100% in amount and number, and Class 7B (convenience claims) accepted at 98% in amount and roughly 99.99% in number.

With every voting class accepting, the contested matters at the May 18, 2026 hearing narrowed to five limited objections. The debtors resolved the objection of landlords Central Avenue Industrial Park LLC and Greenleaf Industrial Parking LLC — which had contested the proposed $0.00 cure amount on two Compton, California real-property leases and demanded payment of attorneys' fees and indemnification costs under section 365(b)(1) — through agreed language to be added to the confirmation order. The debtors asked the court to overrule the four remaining objections.

The U.S. Trustee objection argues that the plan's third-party releases contravene Supreme Court precedent and applicable state law, that the permanent injunction is overbroad, and that the gatekeeping provisions improperly require non-debtors to seek court permission to pursue claims against other non-debtors. The confirmation memorandum responds that the third-party release is wholly consensual because affected parties had an opt-out election, and that the plan satisfies the cramdown standards of section 1129(b) for any impaired class that did not vote to accept.

The Chubb Companies — including Federal Insurance Company and Westchester Fire Insurance Company and affiliated sureties — filed a limited objection to preserve their rights under a General Agreement of Indemnity covering surety bonds issued for the debtors. The sureties seek inclusion of specific "Chubb Language" in the confirmation order under a May 5, 2026 memorandum and opted out of the third-party release to avoid being treated as a releasing party. Personal-injury claimant Adeline Montoya, injured in an accident involving a debtor-employed driver, filed a protective objection reserving the right to argue her claim belongs in the self-insured auto liability class rather than the general unsecured classes; the New Jersey Department of Labor and Workforce Development also kept an objection active at the hearing.

STG's Logistics Platform and Causes of Distress

The first day declaration describes STG as a third-party logistics platform offering intermodal, drayage, over-the-road trucking, container freight station services, transloading, contract logistics, and less-than-truckload services. The company reported approximately $1.6 billion of 2024 revenue, about 130 leased and partnership facilities, roughly 4.5 million square feet of warehousing, approximately 15,000 domestic intermodal containers, 3,300 chassis, and about 2,150 drivers plus access to thousands of third-party carriers. STG's current scale traces to its March 2022 acquisition of XPO Intermodal for approximately $700 million, a deal that added about 700 employees.

Management attributed the filing to what it called the "Great Freight Recession" — collapsing freight rates, excess capacity, high interest rates, and persistent inflation following a pandemic-era growth period. A prolonged freight downturn pressured volumes and rates across asset-based intermodal and drayage operators. The first day declaration states that adjusted EBITDA fell by approximately 95% year over year in the second quarter of 2024, forcing repeated liquidity negotiations with lenders. Those negotiations produced a May 2024 fifth amendment transaction with a $30 million equity infusion and the October 2024 refinancing that management says delivered $327 million of incremental liquidity. The declaration says post-October 2024 litigation by non-participating lenders Axos and Siemens added further pressure and helped drive the need for chapter 11 relief.

Key Timeline

Date	Event
January 12, 2026	STG Logistics files chapter 11; RSA, first day declaration, and DIP motion filed
January 14, 2026	Interim DIP order entered
February 10, 2026	Final DIP order and bar date order entered
March 3, 2026	Court enters bidding procedures order with an April/May sale schedule
March 12, 2026	General claims bar date
March 13, 2026	Debtors file original joint chapter 11 plan and disclosure statement
April 8, 2026	Voting record date
April 14, 2026	First Amended Joint Plan and amended disclosure statement filed
April 24, 2026	Debtors notice election of the Recapitalization Transaction; marketing process closes
May 15, 2026	Plan voting, opt-out, and confirmation objection deadline
May 16, 2026	Second Amended Joint Plan, solicitation declaration, and Barse declaration filed
May 17, 2026	Confirmation memorandum, proposed findings of fact, and supporting declarations filed
May 18, 2026	Confirmation hearing on the Second Amended Joint Plan

Frequently Asked Questions

When did STG Logistics file for chapter 11?

STG Logistics, Inc. and its debtor affiliates filed their chapter 11 petitions on January 12, 2026 in the U.S. Bankruptcy Court for the District of New Jersey, under lead case number 26-10258, before Judge Mark Edward Hall.

What plan did STG Logistics propose, and when was the confirmation hearing?

The debtors filed a Second Amended Joint Plan of Reorganization on May 16, 2026, and the confirmation hearing was scheduled for May 18, 2026. The plan implements a lender-backed Recapitalization Transaction after a 100-day marketing process produced no superior sale bid.

How did the plan resolve the lender litigation?

The plan incorporates a Reception Purchaser Settlement that provides a $12 million payment to non-participating holders and dismisses the Illinois and New York actions with prejudice, ending the litigation that minority lenders Axos Financial and Siemens Financial Services had pressed over the October 2024 liability management transaction. A separate Committee Settlement resolved the official committee's objections.

How did creditors vote on the STG Logistics plan?

All five voting classes accepted the plan. The four senior first-lien classes accepted at 100% in amount and number, and the convenience claim class accepted at 98% in amount. Epiq Corporate Restructuring served 1,253 ballots and received 471.

What is the size and structure of the DIP financing?

The DIP motion describes a facility with total commitments up to $293.75 million, including up to $150 million of new money and a $143.75 million roll-up of prepetition first-lien claims, priced at 8.00% per annum payable in kind.

Who is the claims agent for STG Logistics?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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