Ebix’s DIP financing package draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Jan. 10 – Ebix, Inc.’s proposed $105 million debtor-in-possession financing package with existing lenders drew an objection from Region 6 U.S. trustee Kevin M. Epstein, according to documents filed Wednesday with the U.S. Bankruptcy Court for the Northern District of Texas.

The facility includes a $35 million new-money facility and a $70 million rollup of claims under the company’s prepetition credit facility, as previously reported.

Regions Bank is the administrative and collateral agent.

Epstein called the financing package “inappropriate” because it would automatically repay portions of the prepetition secured parties’ prepetition debt, converting that into a post-petition claim with super-priority administrative expense status, and is secured with estate assets, including currently unencumbered avoidance actions.

“The final roll-up DIP inappropriately improves the position of the senior secured parties by granting a super-priority claim of prepetition debt over post-petition debt, including Chapter 5 avoidance actions,” Epstein said in the objection.

A hearing on the DIP financing is scheduled for Jan. 16.

Ebix is a Johns Creek, Ga.-based international supplier of on-demand software and e-commerce services to the insurance, financial, health care and e-learning industries. The company filed bankruptcy on Dec. 17 under Chapter 11 case number 23-80004.

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