| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers O > Headlines for Otelco Inc. > News item |
Otelco gets interim OK for cash collateral use; confirmation scheduled
By Jim Witters
Wilmington, Del., March 26 - Otelco Inc. received interim approval for continued use of its pre-petition lender's cash collateral and set the date for a combined hearing approving the adequacy of its disclosure statement and confirming its pre-packaged Chapter 11 plan of reorganization.
Judge Mary F. Walrath granted the first-day motions during a March 26 hearing in the U.S. Bankruptcy Court for the District of Delaware.
The company said it needs to use the cash collateral of its pre-bankruptcy lenders to fund its operations through the bankruptcy process.
The interim cash collateral order will expire on the earlier of 45 days after the bankruptcy filing date and entry of the final court order.
A final hearing on use of cash collateral is scheduled for April 18.
As previously reported, the plan - which is expected to strengthen the company by deleveraging its balance sheet and reducing its overall debt by $135 million - has been accepted by 100% of Otelco's senior lenders and voting holders of more than 96% in dollar amount of its senior subordinated notes.
Otelco reached an agreement earlier this year with its senior lenders to amend and extend the terms of its current senior financing through April 2016.
In addition, the company's income deposit securities units will be canceled, and the existing senior subordinated debt will be converted into equity.
A combined hearing for approval of the disclosure statement and confirmation of the plan is scheduled for 11:30 a.m. ET on May 6.
Otelco, an Oneonta, Ala.-based traditional wireline telephone services provider, filed for bankruptcy on March 24. Its Chapter 11 case number is 13-10593.
© 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.