Port-A-Potty Company Files for Bankruptcy to Wipe Away $2.4 Billion in Debt

United Site Services Bankruptcy: A Financial Crisis in the Sanitation Sector

United Site Services (USS), the largest provider of portable sanitation systems in the United States, has filed for bankruptcy in New Jersey, seeking to eliminate $2.4 billion in debt. The company plans to restructure its debt and transfer control to its lenders. The move highlights the financial strains faced by companies in the construction and sanitation sectors amid high inflation and a downturn in residential construction.

USS is owned by private equity firm Platinum Equity Partners, which acquired the company in 2017. The firm attempted to sell USS in 2021 but ultimately chose to retain ownership through a new investment fund. The proposed restructuring will wipe out Platinum’s equity stake in the company.

A majority of USS’s lenders have agreed to support the debt restructuring plan. However, one large lender has opposed the plan and may pursue legal challenges or delays. If approved, the restructuring would fully repay senior lenders and convert lower-priority debt into equity shares.

Why Did This Happen?

USS’s debt, which was used to fund several years of expansion and acquisitions, became unsustainable due to high inflation and a slowdown in residential construction. The company's revenue has been cut as construction activity declined, while expenses for fuel, labor, and interest payments have risen.

USS’s financial difficulties reflect broader challenges faced by private equity-backed companies. Private equity firms have struggled to sell portfolio companies at the expected timelines, especially in the current economic environment.

USS plans to fund its bankruptcy with a new $120 million loan from its existing lenders. The company also intends to raise capital post-bankruptcy through a $480 million equity offering and a $300 million exit loan.

The outcome of the restructuring will depend on court approval and the resolution of any legal challenges from the holdout lender. If the plan is successful, it could mark a significant shift in the company's ownership and financial structure.

What Does This Mean for the Market?

USS's bankruptcy adds to a growing list of companies struggling with debt and market conditions in 2025. Recent examples include Modivcare, which completed a financial restructuring that reduced its debt by over 85%, and Luminar Technologies, which filed for bankruptcy after losing a key contract and is now cutting jobs to reduce costs. According to reports from Canada's pension funds, which are re-evaluating their private equity models due to sluggish deal activity and difficult exit conditions.

USS's restructuring could influence how investors assess the risks of private equity-backed companies, particularly in industries tied to economic cycles and construction demand.

What Are Analysts Watching Next?

Analysts are watching how the restructuring will impact USS's ability to maintain its operations and serve its key clients, including the Super Bowl, the Federal Emergency Management Agency, and construction projects. They are also observing the potential for further bankruptcies or restructurings in the private equity sector, particularly for companies that entered into aggressive expansion strategies during the low-interest-rate period of the early 2020s.

The outcome of USS's bankruptcy could set a precedent for how courts and creditors handle similar cases in the future, especially in cases where one major lender is resistant to a restructuring plan.