The U.S. Bankruptcy Court approved the motion of Life Partners Holdings and its Chapter 11 trustee for an order: (a) authorizing the Debtors to obtain post-petition secured financing and (b) granting security interests and super administrative expense claim.
As previously reported, “By this motion, the Trustee on behalf of LPHI and the Subsidiary Debtors seek approval on a final basis for LPI to borrow up to $10 million in new financing (the ‘D.I.P. Facility’) from Vida Capital (the ‘Lender’), which loan will be guaranteed by Life Partners Holdings (LPHU) and LPI Financial Services (LPIFS). The terms of the DIP Facility are the result of significant arms-length and good faith negotiations, by and among the Trustee, the Subsidiary Debtors, the Committee and the Lender.”
Court-filed documents continue, “The Debtors propose to borrow funds under the DIP Agreement to enable them continue to operate their businesses, preserve the value of the Policies, and pursue confirmation of a plan of reorganization. Following entry of an order granting this DIP Motion and authorizing the Debtors to enter into the DIP Credit Agreement, proceeds of draws under the DIP Credit Agreement may be used for the purposes set forth in this Motion and the DIP Credit Agreement. The financing will bear an interest rate of 4% per annum, payable quarterly in arrears; provided however, that interest shall begin to accrue on the greater of $5 million or the actual amount drawn on the first business day after the Court executes the order.”
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