Tousa cash collateral use affirmed on appeal

By Caroline Salls

Pittsburgh, March 12 - An appeal filed by Tousa, Inc. creditors and the administrative agent for the company's second-lien credit agreement was dismissed Thursday by the U.S. District Court for the Southern District of Florida for "mootness and lack of standing."

As previously reported, the creditors and lender agent appealed a bankruptcy court order granting the company limited access to cash collateral of its first-lien and second-lien lenders in June 2008.

In Thursday's ruling, which dismissed the appeal and affirmed the cash collateral approval, judge Alan S. Gold said the cash collateral order is not a final order, and leave to appeal should not be granted.

Gold also said "the appeals fail on the merits."

The appellants included creditors Aurelius Capital Master, Ltd., Aurelius Capital Partners, LP, GSO Special Situations Fund LP, GSO Special Situations Overseas Master Fund Ltd., GSO Credit Opportunities Fund (Helios), LP and Carlyle Strategic Partners and second-lien agent Wells Fargo Bank, NA.

Tousa's debtor-in-possession facility was terminated on June 20, 2008, but the company received court approval to use the cash collateral of its first-lien and second-lien secured lenders for six months.

Tousa, a Hollywood, Fla.-based homebuilder, filed for bankruptcy on Jan. 29. Its Chapter 11 case number is 08-10928.

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