Pac-West Telecom gets court OK on plan funding agreement with DIP lender Pac-West Funding

By Reshmi Basu

New York, Aug. 24 - Pac-West Telecomm, Inc. received court approval of an agreement with debtor-in-possession financing lender Pac-West Funding Co., LLC, which will provide up to $18 million in exit financing, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

In exchange for the loan, Pac-West Funding will receive 100% in the new common stock in the reorganized company.

As reported earlier, the exit financing will have a term of five years and will bear interest at 13%.

In addition, Pac-West Funding will accept $18 million in cash and the conversion of the balance of the DIP facility into 100% of the new common stock in the reorganized company as payment in full for the DIP facility.

Pac-West, a Stockton, Calif., wholesale provider of advanced telecommunications services, filed for bankruptcy on April 30. Its Chapter 11 case number is 07-10562.

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