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hhgregg Bankruptcy Objection Filed

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hhgregg’s official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors’ post-petition financing motion.

The objection asserts, “The course of these chapter 11 cases was set day one by the Debtors’ secured lenders for their sole and exclusive benefit and without regard to the consequences for the Debtors’ administrative and general unsecured creditors. Rather than serve as a lifeline for the Debtors, the DIP Facility appears to be nothing more than a nail in the coffin. If the DIP Facility is approved as proposed, the DIP Secured Parties would receive exorbitant fees and obtain all of the benefits of chapter 11, without sufficiently providing for the costs and expenses of administering these cases.”

In addition, “At the same time, the DIP Secured Parties seek to grab the few remaining unencumbered assets of these estates, including avoidance actions, leasehold proceeds and commercial tort claims. The DIP Secured Parties also stand to be paid more than $5 million in fees and interest in exchange for limited funding which appears to give the Debtors no option but to liquidate. The Committee will not support approval of a DIP facility that takes money otherwise be available for creditors whose real estate, goods and services are buoying the value of the lenders’ collateral, and uses it to line the pockets of the Debtors’ secured lenders.”

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