ITT Educational trustee seeks OK of $6 million post-bankruptcy loan

By Caroline Salls

Pittsburgh, Oct. 27 – ITT Educational Services, Inc. Chapter 7 trustee Deborah J. Caruso requested court approval to obtain $6 million in post-bankruptcy financing from Cerberus Business Finance, LLC, according to a motion filed Thursday with the U.S. Bankruptcy Court for the Southern District of Indiana.

The financing will be used to fund the wind-down of the ITT estates, pay lender and agent fees and expenses, pay fees and expenses of the trustee’s professional and pay other bankruptcy-related charges.

The loan will mature on the earliest of July 17, 2017, 30 days after entry of the interim order if a final order has not been entered, the date of the sale, transfer or other disposition of all or substantially all of the company’s assets, payment in full of the pre-bankruptcy secured obligations, reduction of the post-bankruptcy loan obligations to zero with the loan parties having at least $5 million in cash that is not subject to a lien and termination of the commitments and acceleration of the loans.

Interest will accrue at a rate of 9%.

ITT Educational Services provided postsecondary degree programs and is based in Carmel, Ind. The company filed for bankruptcy on Sept. 16 under Chapter 7 case number 16-07207.

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