Point.360 filed with the U.S. Bankruptcy Court a motion for approval of re-use of cash collateral and post-petition financing.
The motion explains, “The use of cash collateral is sought in accordance with the budget Exhibit 1, subject to a 5% cumulative deviation. The only party having an interest in cash collateral is Austin Financial Services, pursuant to a July 13, 2016 Amended and Restated Loan and Security Agreement as amended (‘LSA’)….The fundamental terms of Austin’s revolving loan agreement are an 85% advance rate against eligible receivables at a 6% annual interest rate and 6.5% annual management fee. This 12.5% annualized cost of financing is paid monthly. The last payment of $28,048.15 was paid to Austin on September 29, 2017. Austin’s current balance is $2,433,184.73 pursuant to the account statement included with Exhibit 2. To the extent Austin consents to provide such DIP financing, the approval requested herein seeks approval of such financing. If Austin opts to terminate Debtor’s prepetition financing, then Debtor will demand turnover of post-petition receivable collections and use such proceeds in operations without further advances from Austin during the interim approval period.”
In addition, “The Medley Loan Agreement is comprised of a five-year term loan facility in the amount of $6,000,000, $1,000,000 of which was funded on the July 8, 2015 closing date. As of March 31, 2017, the Company had borrowed the $6,000,000 under the Medley Loan Agreement. Debtor has elected to pay interest as payment in kind (‘PIK’) as permitted by the Loan Agreement. The outstanding principal balance and all accrued and unpaid interest on the Term Loan are due and payable on July 8, 2020….Austin’s $2,433,184.73 debt is secured by $9 million in collateral.”
The Court subsequently granted interim approval to the motion and scheduled an October 31, 2017 hearing to consider final approval.
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