DIP Financing-Update
On November 20, 2006, the Court entered an interim order approving debtor-in-possession financing in the amount of $350,000 from Bear Sterns Investment Products, Inc. ("Bear Sterns"). The interim order authorizes use of the $350,000 in conjunction with an approved budget which is designed to meet some of the Debtors' emergent needs, including, among other things, insurance, security for the developments and payroll.
In connection with the Bear Sterns financing, on an interim basis, Bear Sterns was granted a lien on all avoidance actions (preferences, fraudulent transfers, etc.) in addition to junior liens on all the debtors' real estate assets.
The Committee and its professionals, in conjunction with the Debtors and their professionals, are in the process of negotiating a final order and attempting to address certain of the concerns raised by the Court at the interim hearing, as well as the substantial objections raised by the Debtors' secured lenders, alleged mezzanine lenders, construction lien claimants and vendee lien claimants.
To that end, there has been established an aggressive discovery and deposition schedule over the next week to address the concerns and objections raised.
The final hearing is scheduled for December 1, 2006 at 9:00 am and will determine if the balance of the proposed $2.6 million in DIP Financing will be advanced to the Debtors to fund operations consistent with a proposed budget.
In connection with the Bear Sterns financing, on an interim basis, Bear Sterns was granted a lien on all avoidance actions (preferences, fraudulent transfers, etc.) in addition to junior liens on all the debtors' real estate assets.
The Committee and its professionals, in conjunction with the Debtors and their professionals, are in the process of negotiating a final order and attempting to address certain of the concerns raised by the Court at the interim hearing, as well as the substantial objections raised by the Debtors' secured lenders, alleged mezzanine lenders, construction lien claimants and vendee lien claimants.
To that end, there has been established an aggressive discovery and deposition schedule over the next week to address the concerns and objections raised.
The final hearing is scheduled for December 1, 2006 at 9:00 am and will determine if the balance of the proposed $2.6 million in DIP Financing will be advanced to the Debtors to fund operations consistent with a proposed budget.
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