Interactive Health Chapter 7 trustee gets OK of cash collateral deal

By Sarah Lizee

Olympia, Wash., Feb. 26 – Interactive Health Solutions, Inc.’s Chapter 7 trustee, George L. Miller, secured court approval of a cash collateral sharing and reimbursement agreement between himself and pre-petition first-lien administrative agent Bank of Montreal, according to an order filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

Miller said in his motion that he needs to use the cash and the proceeds of the debtors’ existing accounts receivable to preserve the value of their assets and to fund the orderly liquidation of their assets. However, these items constitute part of the collateral of BMO and the pre-petition first-lien lenders and, therefore, may not be used absent compliance with section 363(c)(2) of the Bankruptcy Code.

BMO and the pre-petition first-lien lenders have consented to the trustee’s use of cash collateral, other than the cash on hand.

Miller said BMO and the pre-petition first-lien lenders want him to recover, preserve, market and sell the collateral under sales or other methods of liquidating and/or recovering collateral, so as to obtain the highest and best price for the collateral.

The trustee said he will conduct the asset sales, provided he can pay for the costs of those sales.

The debtors currently owe $116.43 million under the pre-petition credit agreement.

Interactive Health is a Schaumburg, Ill., provider of workplace health programs. The company filed bankruptcy on June 14, 2020 under Chapter 7 case number 20-11526.

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