Orleans Homebuilders unsecured creditors committee opposes financing

By Lisa Kerner

Charlotte, N.C., April 9 - Orleans Homebuilders, Inc.'s official committee of unsecured creditors objects to the company's obtaining post-petition financing and its use of cash collateral, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

The committee said Orleans' debtor-in-possession financing motion and related agreement should not be approved because the debtors recently received an $18.2 million tax refund.

As previously reported in March, Orleans received court approval for interim access to up to $26 million of the company's DIP financing.

The interim DIP loan includes up to $11 million in cash funding and up to $15 million of letters of credit and will be used to finance Orleans' business expenses.

Orleans said previously that the DIP facility consists of a $40 million revolving credit facility and an $80 million term loan. The term loan will be rolled up from the company's pre-bankruptcy debt.

Orleans Homebuilders, a Bensalem, Pa.-based developer, builder and marketer of single-family homes, townhouses and condominiums, filed for bankruptcy on March 1 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 10-10684.

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