First Mariner wins approval of DIP loan, share trading restrictions

By Caroline Salls

Pittsburgh, March 12 - First Mariner Bancorp received court approval to obtain $2.5 million of debtor-in-possession financing from stalking horse bidder RKJS Bank, according to a March 12 filing with the U.S. Bankruptcy Court for the District of Maryland.

Interest will be 6%, provided, however, that there will be no interest on the loan if RKJS is the winning bidder for the company's bank subsidiary.

The DIP financing will mature on the earliest of four months from the date of the first loan, subject to change if the lender is the winning bidder, the acquisition closing, the first business day after the court approves a sale with a winning bidder other than RKJS, the termination date of the merger and acquisition agreement, the earlier of the Chapter 11 plan effective date and the date the obligations come due as a result of a default and the date that Federal Deposit Insurance Corp. is appointed as a receiver or conservator of the bank.

First Mariner also received final court approval of the notification and hearing procedures for transfers of some of its equity securities.

Under the transfer procedures, any person who is or becomes a substantial holder of First Mariner's shares must declare that status within 30 days of the interim procedures order or 10 days of becoming a substantial shareholder.

The company will then have 15 days to object to the proposed transfer of securities on the grounds that it would hurt its ability to use net operating losses.

Any transfer that does not comply with the procedures will be null and void.

The order defines a substantial shareholder as any person holding 4.75% or more of First Mariner's common stock.

First Mariner, the Baltimore-based holding company for 1st Mariner Bank, filed bankruptcy on Feb. 10. The Chapter 11 case number is 14-11952.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.