Edgemere withdraws motion for $5.4 million more DIP financing

By Sarah Lizee

Olympia, Wash., Jan. 13 – Northwest Senior Housing Corp., which does business as Edgemere Dallas, withdrew a motion seeking approval of $5.4 million of additional debtor-in-possession financing and a maturity date extension by the U.S. Bankruptcy Court for the Northern District of Texas.

As previously reported, this would have brought the facility’s amount to $15.5 million and extended the maturity through April 14.

The company did not give a reason for the withdrawal in the notice filed with the court.

However, the official committee of unsecured creditors had objected to the motion a day before it was withdrawn.

The committee said the DIP facility’s carveout and budget for its professionals was too small.

The proposed amended budget only allowed for the payments of committee professional fees of $445,408 for the extended five-month DIP period, or an average of $89,081.60 per month. Meanwhile, the debtors’ professionals would be allocated $2.01 million, averaging $402,800 per month.

“The debtors are once again attempting to improperly force the committee’s professionals to defer and finance a disproportionate share of the unpaid administrative expenses of these estates, which is not fair nor legally enforceable, especially when considering the outsized fees of the debtors’ professionals compared with the committee’s professionals,” the committee said.

If the amendment had been approved, the facility’s interest rate would also be changed to 12%, and the DIP lender would get a 2% commitment fee. Interest was previously 10%.

If a default occurred, interest would jump to 14%.

Some of the DIP facility’s case milestones would also change, including pushing the plan confirmation deadline to Feb. 10 and the effective date to April 14.

Bond trustee UMB Bank, NA is the lender.

The company also sought to extend the use of cash collateral through March 30.

The Dallas-based luxury senior living community filed Chapter 11 bankruptcy on April 14, 2022 under case number 22-30659.

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