Modern Continental granted interim access to $5 million DIP loan

By Caroline Salls

Pittsburgh, Aug. 7 - Modern Continental Construction Co., Inc. obtained interim court approval of an up to $5 million debtor-in-possession facility, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Massachusetts.

The final hearing is scheduled for Aug. 28.

St. Paul Fire and Marine Insurance Co. is the lender agent.

The proceeds of the DIP facility will be used for working capital and general corporate purposes, to pay the costs and expenses of the administration of Modern Continental's Chapter 11 bankruptcy case and to fund its business operations through Oct. 3.

Without the financing, the company said it would not have enough liquidity to meet its daily cash needs, including payroll, rent and insurance.

Interest will be Prime rate plus 200 basis points.

The DIP facility will mature on the earliest of Oct. 10, on the effective date of a plan of reorganization and upon dismissal or conversion of the company's Chapter 11 case or appointment of a trustee or examiner.

Modern Continental, a Dedham, Mass., contractor, filed for bankruptcy on June 23. Its Chapter 11 case number is 08-14558.

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