The Rockport Company’s Official Committee of Unsecured Creditors filed with the U.S. Bankruptcy Court an objection to the Debtors’ motion for entry of interim and final orders authorizing the Debtors to (a) obtain post-petition financing on a super-priority, senior secured basis and (b) use cash collateral.
The committee asserts, “While the Committee is aware that the Court approved the initial $10 million advance under the DIP Note Facility and the corresponding $20 million roll-up at the first day hearing, the waiver of marshalling and authorization to borrow and roll-up an additional $10 million (the ‘Final Draw’) and $20 million (the Final Roll-Up’), respectively, remain subject to entry of a final order. The Committee submits that this additional relief should not be granted, not only because it will further prejudice unsecured creditors by solidifying the Noteholders’ grab of previously unencumbered value, but also because the Final Draw is not necessary. As currently constructed, the Debtor’s Budget projects that $6 million of the additional $10 million will be borrowed. However, the Budget relies on the assumption that the Debtors will spend $8 million in the early weeks of these cases to repay vendors…Accordingly, the Debtors cannot show that they need any additional funding, and the roll-up and other protections granted to the lenders become even more egregious.” The committee also filed with the Court a motion to file under seal its objection to motion of Debtors to obtain post-petition financing on a super-priority, senior secured basis and use cash collateral. The seal motion explains, “In the Objection, the Committee provides, quotes and otherwise references confidential business and commercial information that it received from the Debtors as confidential information and/or sensitive information under the parties’ non-disclosure agreement, which was entered into in these cases to facilitate the open sharing of information between the parties.”
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