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MModal Holdings Financing Approval Sought
MModal Holdings filed with the U.S. Bankruptcy Court a motion for an order (i) authorizing Debtors to obtain post–petition financing and use cash collateral (ii) granting adequate protection to prepetition secured parties' pursuant (iii) granting liens and superpriority claims and (iv) modifying automatic stay. The financing consists of a senior secured priming and superpriority debtor–in–possession term loan credit facility in an original principal amount of $30,000,000. Royal Bank of Canada will act as the D.I.P agent and collateral agent. All amounts outstanding under the D.I.P. facility will bear interest at, for Eurodollar loans, LIBOR plus 7.95% with a LIBOR floor of 1.5% and for base rate loans, the base rate plus 6.95% with a base rate floor of 2.5%. Upon default, the DIP Facility will accrue interest at an additional 2.0% per annum. The motion explains, "The Debtors need to obtain access to the Financing (including cash collateral) to permit, among other things, the orderly continuation of the operation of their businesses, to maintain business relationships with vendors, suppliers and customers, to make payroll, and to satisfy other working capital and operational needs, including to address potential adverse impact on their business and operations relating to the filing of these cases. The access of the Debtors to sufficient working capital and liquidity through the Financing is vital to the preservation and maintenance of the going concern values of the Debtors, to their ability to sustain market confidence in the business and for a successful reorganization contemplated by the Plan Support Agreement. The Prepetition Secured Parties have consented to the Debtors' use of their cash collateral on an interim basis only, and without a consensual funding package, it is likely that the Prepetition Secured Parties would have objected to the Debtors' use of cash collateral, resulting in unnecessary litigation, costs and expenses and uncertainty as to the Debtors' on–going operations. As discussed herein, the DIP Lenders have committed to provide financing and consented to the continued use of cash collateral to allow the Debtors to operate their business as debtors-in-possession." The Court scheduled a May 6, 2014 hearing on the financing motion.
Green Field Energy Services Plan Approved
The U.S. Bankruptcy Court approved Green Field Energy Services' second amended Joint Plan of Liquidation. According to the documents filed with the Court, "The Plan and Plan Documents reflect and incorporate a settlement and compromise of controversies. In particular, the Plan reflects a settlement between the Debtors, Shell, the Senior Secured Noteholders and the Official Creditors' Committee, on behalf of the general unsecured creditors regarding, among other things, potential causes of action against Shell, the value of the collateral securing the senior noteholder claims and the distribution of remaining assets of the estates between the senior secured noteholders and general unsecured creditors. The Plan provides for the liquidation of assets of the estates, including the investigation and prosecution of causes of action by a liquidation trust to be formed pursuant to the plan and a liquidation trust agreement…. The liquidation trust is to be managed by a liquidation trustee under the oversight of a liquidation trust oversight committee. The liquidation trust will be responsible for liquidating the assets of the estates and making distributions to holders of allowed claims, and, if applicable, allowed interests, as well as all other administrative tasks necessary for ultimate resolution of the Chapter 11 Cases, pursuant to the terms of the Plan and the liquidation trust agreement."
Coldwater Creek Sale Approval Sought
Coldwater Creek filed with the U.S. Bankruptcy Court a motion for an order authorizing the Debtors to (i) assume the purchase and sale agreement with respect to real property located in Kootenai, Idaho, (ii) perform settlement conditions pursuant to the purchase and sale agreement and (iii) sell real property free and clear of liens, claims and encumbrances. The motion explains, "CCM&L owns approximately 21 acres of real property located in Kootenai, Idaho, which has been developed as a multi–building commercial campus that functions as the Debtors' headquarters (the "Campus"). The Campus is one of the largest parcels of commercial office and warehouse space in Bonner County. As part of its orderly wind-down and to maximize the value of the Campus, the Debtors determined to subdivide the Campus into multiple parcels in order to facilitate sales to multiple counterparties that are interested in some of the commercial real estate but do not have a use for the entire Campus…. The negotiations regarding the Purchase and Sale Agreement were done at arm's…length as, to the best of the Debtors' knowledge, neither the Debtors nor any of their members or officers have any relationship with the Purchaser…. The Purchaser, Litehouse Foods is the largest private employer in Bonner County after the Debtors according to the Idaho Department of Labor. As such, it is one of the most natural buyers of the Property. Its offer to purchase the Property for $2.6 million is subject to few closing conditions and the Purchaser has indicated that it will accept the Property "as is"…. Before entering into the Purchase and Sale Agreement, the Debtors sought input from both Wells Fargo Bank, National Association, as its prepetition revolving lender (and now, the Debtors' postpetition DIP financing lender), as well as CC Holdings Agency Corporation, its prepetition term loan lender (collectively, the "Secured Lenders"). The Secured Lenders reviewed the Debtors' appraisal of the Property and discussed with Coldwater management the Debtors' marketing efforts for the Property. Ultimately, the Secured Lenders consented to the Debtors' sale pursuant to the Purchase and Sale Agreement. On or about April 9, 2014, CCM&L and the Purchaser entered into the Purchase and Sale Agreement, pursuant to which CCM&L agreed to deliver to the Purchaser a special warranty deed and bill of sale among other deliverables as conditions to settlement and receipt of the $2.6 million purchase price. Thus, the Debtors now seek authority to assume the Purchase and Sale Agreement, to allow the Debtors to perform the settlement conditions there under and sell the Property to the Purchaser free and clear of all liens, claims and encumbrances." The Court scheduled a May 21, 2014 hearing to consider this sale motion.
Dolan Committee Appointed
The U.S. Trustee assigned to the Dolan's case appointed an official committee of unsecured creditors. The following members will serve on the committee: Jan Loeb of Leap Tide Capital Management; Alexandre Zyngier; Joe McInnis of Greywolf Capital Management; Stephen Scott Roth of Severn River Capital Management and Jake Miller of DS Fund I.
City of Detroit Notice of Appeal Filed
Syncora Guarantee Inc. and Syncora Capital Assurance Inc. filed with the U.S. Bankruptcy Court a notice of appeal from an order granting the motion of the City of Detroit for an order approving a settlement and plan support agreement. According to the settlement order, "ordered that the Motion seeking approval of the settlement and plan support agreement substantially in the form filed in this case is approved in its entirety…. Ordered that each of UBS and MLCS is hereby granted an allowed claim (collectively, the "Secured Claims") against the City secured by liens on the Pledged Property (the "Liens"), which, solely for purposes of distributions from the City, shall be deemed to be in the aggregate principal amount of $42,500,000.00 for each of UBS and MLCS, as of January 1, 2014, plus any interest accruing thereafter as provided in the Agreement (together, the "Distribution Amount"), payable in cash; and it is further ordered that, except as reduced by payments as set forth herein or in the Agreement, the Secured Claims and the Liens, which were previously granted for the exclusive benefit of UBS and MLCS, shall not be subject to avoidance, reduction, subordination, reconsideration, merger, re–characterization, consolidation, recoupment, recovery, deduction, attack, offset, objection, defense, claim (as defined in the Bankruptcy Code) or counterclaim…. Ordered that UBS and MLCS reserve and retain all rights, claims and remedies related to the Swap Agreements or the Swap Insurance Policies against any person that is not a Party, including, without limitation, against either Service Corporation, Syncora Guarantee Inc., Syncora Capital Assurance Inc. or Financial Guaranty Insurance Company; provided that neither UBS nor MLCS will exercise any right, claim or remedy against a Swap Insurer in connection with the Swap Insurance Policies that."