NBG Home upsizes DIP facility; Black Diamond moves to convert case

By Sarah Lizee

Olympia, Wash., June 16 – Nielsen & Bainbridge, LLC, which does business as NBG Home, received approval to amend its debtor-in-possession facility and increase the new money component by $1.85 million, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

The amendment also provides for the potential to increase the new money by an additional $4.99 million as well.

As background, the company entered into a restructuring support agreement with lenders holding the majority of its debt, comprised of credit funds and accounts managed by KKR Credit Advisors (US) LLC and funds managed by Silver Point Capital, LP.

Under the agreement, the company received a $60 million DIP facility via KKR and Silver Point. The facility consists of $30 million in new money and a $30 million rollup of prepetition loans.

A prior amendment lifted the new-money component by $6.3 million. The latest amendment brings the new money amount to $38.15 million, and potentially $43.14 million if increased again.

Together, the amendments further rolled up $39.43 million of prepetition loans, as part of an agreement with Silver Point and KKR to keep a 3:1 rollup ratio.

Objection, conversion motion

First-lien term loan lender Black Diamond Capital Management, LLC had filed an objection to the DIP increase, and simultaneously motioned for conversion of the company’s Chapter 11 case to Chapter 7.

Black Diamond called the motion an “abuse of process,” given that the debtors are authorized to upsize the initial $60 million facility by more than $52 million between the two amendments, which amounts will have to be repaid in full to KKR and Silver Point before any other creditors receive a recovery.

The lender said whether the debtors’ estates are administratively solvent remains to be shown.

“Nevertheless, the debtors continue to incur additional financing on a priming basis with an aggressive 3:1 roll-up of KKR’s and Silver Point’s prepetition loans that will only increase the debtors’ insolvency without any compelling evidence of their ability to execute on a going-concern reorganization of any kind,” Black Diamond said in the court documents.

“As has been the pattern, the debtors continue to run these Chapter 11 cases for the sole benefit of KKR and Silver Point.”

The home decor company is based in Austin, Tex. The company filed bankruptcy on Feb. 8 under Chapter 11 case number 23-90071.

© 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.