Radnor Pennsylvania headquartered steel mill service provider Phoenix Services Topco, with approximately 2,600 employees, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware reporting USD 500 million to USD 1 billion in both assets and liabilities in an attempt to renegotiate customer contracts it says have become unprofitable due to recent economic pressures. According to the First Day Declaration, the company will seek approval of DIP financing from an ad hoc group of first-lien lenders, which includes up to USD 50 million in new money and a USD 150 million roll up. Under the terms of the proposed DIP, the deadline to confirm a plan of reorganization is 155 days from the petition date or 1 March 2023.In court filing it said “Phoenix’s contract portfolio has recently become unsustainable due to inflationary pressures and rising fuel costs, coupled with suboptimal contract terms. Phoenix has also encountered operational challenges at customer sites, including equipment failures and management turnover. The contracts and operational challenges, in turn, have placed a significant strain on the debtors’ liquidity, which was further weakened by capital lease payments, rising interest rates, and increased capital expenditures.”It said “The company has developed a strategy to renegotiate or terminate unprofitable contracts and emerge from bankruptcy in March 2023 “as a going concern with a sustainable and profitable contract portfolio.”To assist in the process, Phoenix has retained legal counsel from Weil Gotshal & Manges and Richards, Layton & Finger. The company has also hired AlixPartners as a financial advisor and PJT Partners LP as an investment banker.Phoenix is controlled by an affiliate of Apollo Global Management following a 2017 acquisition. Phoenix specializes in removing and handling molten slag that has been separated from steel. The company, which operates at 39 customer sites, also prepares and transports metal scraps, raw materials and finished products.