BHCosmetics gets interim court approval to access cash collateral

By Sarah Lizee

Olympia, Wash., Jan. 19 – BHCosmetics Holdings, LLC received interim court approval to use the cash collateral of its prepetition lenders, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company’s prepetition debt includes a $25 million asset-based facility maturing Dec. 28, 2022.

The facility was entered into on Dec. 28, 2017 with Fifth Third Bank, NA as administrative and collateral agent, lender, letter-of-credit issuer and swingline lender.

The facility consists of an initial term loan commitment of $15 million and a revolving credit commitment of $10 million, which includes an up to $2.5 million swingline loan and a $2.5 million letter of credit.

As of the petition date, the outstanding balance of the term loan and revolver were $9.63 million and $13.86 million, respectively, and in each case including accrued interest through Dec. 21, but not including certain fees and other charges.

The company said that without access to the cash collateral, a substantial value degradation would occur as a result of its inability to continue operations, which would not only impact revenue, but also negatively impact the debtors’ employees, vendors, customers and brand, jeopardizing the debtors’ ability to effect a successful sale process.

BHCosmetics is a Culver City, Calif.-based beauty brand that focuses on clean, vegan and cruelty-free cosmetics. The company filed bankruptcy on Jan. 14 under Chapter 11 case number 22-10050.

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