Violin Memory granted interim access to $3.1 million of DIP financing

By Caroline Salls

Pittsburgh, Feb. 16 – Violin Memory, Inc. was granted interim access to $3.1 million of an $8 million debtor-in-possession facility, according to an order filed Feb. 16 with the U.S. Bankruptcy Court for the District of Delaware.

The final hearing is scheduled for March 6.

As previously reported, Quantum Partners LP affiliate VM Bidco LLC agreed to sponsor the company’s Chapter 11 plan and to provide the DIP facility to finance Violin Memory’s continued operations and restructuring efforts.

The DIP facility will be converted into an exit facility under a confirmed plan of reorganization.

The DIP facility will mature on the earliest of Aug. 30, 2017, the plan effective date, the occurrence of an event of default, the completion of any alternate transaction, entry of a court order granting foreclosure of any assets with a value in excess of $100,000 or a motion for appointment of a Chapter 11 trustee or examiner or for dismissal or conversion of the bankruptcy cases and Violin Memory’s filing of support for an alternate transaction that does not repay the DIP facility in full.

Interest will accrue at a rate of Libor plus 900 basis points, subject to a 1% Libor floor.

Santa Clara, Calif.-based Violin Memory develops and supplies computer data storage products. The company filed bankruptcy on Dec. 14 under Chapter 11 case number 16-12782.

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