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RMH Franchise lender agent objects to exclusivity extension request
By Caroline Salls
Pittsburgh, Nov. 14 – RMH Franchise Holdings, Inc. lender agent Bank of America, NA objected to the company’s proposed extension of its exclusive periods for filing and soliciting votes on a Chapter 11 plan, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.
Bank of America said RMH agreed as part of its cash collateral use order that a termination event would occur if a plan of reorganization is not confirmed by the court by Dec. 4.
The bank said the requested extensions would mean the plan would be confirmed well past the agreed deadlines.
“Generally, the standard for determining whether ‘cause’ for an extension exists is whether granting the extension will increase the likelihood of a successful reorganization,” the objection said.
“Here, [the RMH debtors] have offered nothing to support their contention that the requested extensions are likely to lead to a better outcome.”
In addition, given that RMH’s cash projections indicate that its cash position will decline to less than $1 million for the week ended Dec. 2, the lender agent said the requested extensions put the company at an increased risk of not being able to meet operating requirements as they become due.
“If a plan is not confirmed by Dec. 4, 2018, thereby terminating debtors’ right to use cash collateral, the exclusive periods should also terminate,” the objection said, giving the agent, the senior lenders and other parties in interest the chance to file their own proposed plan.
RMH is an Atlanta-based Applebee’s franchisee. The company filed for bankruptcy on May 8 under Chapter 11 case number 18-11092.
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