US Special Situations: Packers Sanitation lenders in talks to take over equity, as negotiations turn to potential bankruptcy
Sydney Sladovnik - Reporter, LevFin Insights
Veronica Graff - Reporter, LevFin Insights
Erica Carnevalli - Reporter, LevFin Insights
19 September 2025
Insights into how a lender-led restructuring could trigger a Packers Sanitation Chapter 11 debt-for-equity swap, reshape financing/control dynamics, and spotlight ESG-driven risk across the capital structure, including:
- Lender-led takeover mechanics: Learn how restricted lenders could assume equity via a Chapter 11 debt-for-equity swap as Blackstone prepares to walk away.
- DIP financing playbook: See which creditor groups are positioned to provide DIP funding and why that matters for control and recovery.
- Advisors and stakeholders: Understand the roles of Elliott, Citadel, Davis Polk, Evercore, PJT, and Kirkland & Ellis in shaping the restructuring.
- ESG and legal overhangs: Explore how child labor violations and reputational risk are pressuring revenues, costs, and buyer appetite.
- Capital structure stress: Get the key signals, recent refi terms, ratings downgrades, and first-lien loan pricing, that frame potential outcomes.
Packers Sanitation Services (PSSI, aka Fortex, sponsor Blackstone Group is prepared to walk away from its equity interest in the sanitation company as financial struggles for the issuer continue to mount, sources tell LFI. As such, restricted lenders are engaged in talks to step in to take over the distressed borrower’s equity via a debt-for-equity swap, likely within the confines of a chapter 11 process, sources said. A combination of financial and reputational headwinds has beleaguered Packers for years, deeming it an unattractive asset with ESG risk, sources noted. A coop group of creditors has been working with Davis Polk and Evercore to assist in the discussions, sources continued. Among the consortium’s largest creditors are Elliott Management and Citadel, with the firms and other significant holders in talks to potentially provide a DIP to help finance the company’s operations in a bankruptcy, they said.
