Handy Hardware DIP facility change OK'd; hope is for July confirmation

By Jim Witters

Wilmington, Del., May 13 - Handy Hardware Wholesale, Inc. received approval May 13 to amend its debtor-in-possession credit facility to allow an affiliate of potential asset buyer Littlejohn Management Holdings, LLC to purchase a $4 million back-end participation in the DIP financing.

Judge Mary F. Walrath granted the amendment, which also includes adjustments to the case's timeline, during a hearing in the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Littlejohn submitted a non-binding letter of intent to acquire the company's assets as a going concern through a confirmed plan of reorganization.

Handy Hardware is seeking a 90-day extension of its exclusive periods for filing a Chapter 11 plan and for soliciting plan acceptances to provide time to negotiate an asset purchase agreement with Littlejohn and conduct an auction and a sale hearing.

The company also needs to revise its proposed plan and disclosure statement, submitted in March, based on the Littlejohn deal, said debtors attorney Gregory Alan Taylor.

Taylor told the court he plans to seek approval of the disclosure statement, a plan support agreement with Littlejohn and an exit financing agreement on June 19.

The company hopes to receive confirmation of its reorganization plan in mid-July, he said.

Handy Hardware's DIP facility expires July 31.

One of the components of the Littlejohn proposal is its purchase of the participation in the Wells Fargo DIP loan to provide $4 million of additional liquidity to Handy Hardware during the bankruptcy case.

Also under the DIP loan amendment, Wells Fargo Bank NA agreed to waive existing defaults and approve a new budget.

If Handy Hardware proceeds with an alternative transaction, the party proposing that deal will be required to make a $4 million reduction to the DIP credit agreement or buy the back-end participation.

Handy Hardware, a hardware retailer co-operative based in Houston, filed for bankruptcy on Jan. 11. Its Chapter 11 case number is 13-10060.

© 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.