STG Logistics announced that the company, along with ‘certain of its affiliates and subsidiaries’, has filed for Chapter 11 bankruptcy protection as part of a prearranged restructuring plan aimed at reducing its debt.
In a news release, the Columbus, Ohio–based company said it has entered into a restructuring support agreement with its equity sponsors and a majority of its lenders that will ‘significantly reduce’ the debt and provide some $150 million in new capital from existing lenders.
The prearranged court-supervised reorganization process was initiated under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey.
STG said it has filed several ‘first day’ motions, which, if approved, will enable the company to continue to pay employee wages and benefits, maintain all customer programs, fulfill go-forward payments to key vendors, and execute other ordinary business functions.
The company also said that in addition to cash on hand, STG plans to access up to $150 million in debtor-in-possession financing from its current lenders to fund operations while the restructuring proceeds.
“Today’s announcement marks an important milestone in our efforts to strengthen STG amidst one of the most severe freight recessions in history,” said Geoff Anderman, CEO of STG Logistics, in the release. “We are confident that leveraging the chapter 11 process will best position the business for long-term growth and success.”
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