Tarragon's DIP facility lender seeks repayment of $4.15 million loan

By Lisa Kerner

Charlotte, N.C., March 8 - Tarragon Corp. debtor-in-possession facility lender Westminster Funding asked the court to enforce the final DIP order and credit agreement and force Tarragon to make a cash payment to Westminster, according to a Monday filing with the U.S. Bankruptcy Court for the District of New Jersey.

Westminster said in the filing that Tarragon has approximately $3 million in its cash reserves based on its December monthly operating report.

In addition, Westminster wants the court to order Tarragon to liquidate other estate assets in order to satisfy its obligation to Westminster.

In December, the court granted final approval of the $4.15 million DIP facility from Westminster. The court previously granted the company interim access to the DIP facility to fund operations beyond the week ended Nov. 27.

As previously reported, the replacement loan was to mature on the earliest of Jan. 22, the filing of a plan of reorganization that has not been agreed to by Westminster, the earlier of the effective date of a Westminster-approved plan and 30 days after confirmation of that plan and the closing of a sale of substantially all company assets that does not have Westminster's consent.

Interest will be 12%.

Tarragon, a New York homebuilder, filed for bankruptcy on Jan. 12, 2009. Its Chapter 11 case number is 09-10555.

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