November 27, 2018 – The court hearing the LBI Media case approved the Debtors’ request for interim debtor-in-possession (“DIP”) financing [Docket No. 86].
As previously reported in respect of the Debtors’ motion [Docket No. 12], “The Debtors seek authorization to obtain DIP Financing under a multiple-draw super-priority senior secured term loan facility in an aggregate principal amount not to exceed $38 million (the ‘DIP Facility’) agented by HPS Investment Partners, LLC (‘HPS,’ and in such capacity, the ‘DIP Agent’). The Debtors seek interim authority to draw up to $10 million under the DIP Facility.
The Debtors are entering Chapter 11 with minimal cash on hand. Access to DIP Financing and the use of Cash Collateral is thus critical to ensure the Debtors’ smooth entry into Chapter 11 and their ability to prudently operate their business during the pendency of these Chapter 11 cases….The DIP Financing has been market tested and evaluated by the Debtors’ committee of independent directors formed to lead and oversee the Debtors’ restructuring efforts (the ‘Restructuring Committee’). The DIP Financing will provide sufficient liquidity to fund these Chapter 11 cases and the Debtors’ operations and will allow the Debtors to send a strong message to their vendors, customers, and employees that the Debtors are well-capitalized and well positioned for a successful reorganization The Debtors negotiated the DIP Financing and the adequate protection proposed herein in good faith and at arm’s length. The terms of the DIP Facility are reasonable and the best that could be obtained under the totality of the circumstances.”
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