Birch Telecom gets interim approval for up to $2 million DIP financing

By Caroline Salls

Pittsburgh, Aug. 16 - Birch Telecom, Inc. obtained interim approval to use up to $2 million of its $5 million debtor-in-possession financing from Bank of America, NA, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The term for the interim financing will be the earlier of 35 days or on entry of an order approving the final DIP.

The term for the final DIP is the earlier of 270 days from the petition date, the date of termination of the revolving credit commitments, the date on which existing revolving credit loans are no longer permitted to remain outstanding under the DIP agreement or the date of payment in full of the revolving credit loans.

Interest is Prime rate plus 700 basis points.

A hearing on final approval of the DIP is scheduled for Sept. 14.

Birch, a Kansas City, Mo.-based comprehensive voice and data services company, filed for bankruptcy on Friday. Its Chapter 11 case number is 05-12237.

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