Mattress Firm – Court Approves Exit Commitment Letter, Treatment of Commitment Fee as Administrative Expense

October 29, 2018 – The Court hearing the Mattress Firm case authorized the Debtors (i) to agree and execute an exit commitment letter (the “Exit Commitment Letter”), (ii) to agree to a commitment fee (the “Commitment Fee”) that would be treated as a superpriority administrative expense and (iii) to file the Exit Commitment Letter under seal [Docket No. 444]. 

 

As previously reported [Docket No. 91], “The ‘Exit Commitment Letter’, relating to secured exit financing facilities consists of (x) a new senior secured asset-based revolving credit facility in an aggregate principal amount of up to $125,000,000 (the ‘ABL Facility’), and (y) a new senior secured term loan credit facility in the aggregate principal amount of $400,000,000 (the ‘Term Facility’ and, together with the ABL Facility, the ‘Exit Facilities’)….The Debtors have procured the Exit Commitment Letter, which provides for financing in an aggregate amount of up to $525 million from the commitment parties (the ‘Commitment Parties’), the terms of which are embodied in the Exit Commitment Letter….The Debtors respectfully submit that the Exit Commitment Letter contains reasonable terms and conditions and will ensure the Debtors have in place sufficient financing to emerge from chapter 11 as expeditiously as possible. Accordingly, by this Motion, as required under the terms of the Exit Commitment Letter, the Debtors seek authority to proactively assume the benefits and perform their obligations under the Exit Commitment Letter, including the approval of the Commitment Fee as a superpriority administrative expense under section 503(b)(1) of the Bankruptcy Code.”