Urban Commons outlines proposed DIP loan with BPC DIP Lender

Chicago, Dec. 21 – Urban Commons 2 West LLC is filing for authorization to obtain post-petition financing and use of its cash collateral, according to filings with the U.S. Bankruptcy Court for the Southern District of New York.

The proposed debtor-in-possession order drew objections from Highgate Hotels, LP and Battery Park City Authority, each of which are now represented on the official committee of unsecured creditors.

According to the DIP loan term sheet, the company is seeking up to $6,046,157 in the form of a loan from BPC DIP Lender, LLC.

Multiple draws will be available and the proceeds may be used for general corporate purposes and working capital in accordance with the DIP budget.

The maturity date will be the earlier of the closing of a sale of substantially all of the debtors’ assets, a confirmation of a Chapter 11 plan or 112 days from Jan. 3.

BPC will advance $816,425 as interim funding.

Interest will be 12%, payable at maturity. The default interest rate is 15%.

A 3% fee on the entire loan will be due and payable on closing.

Conditions for closing the DIP facility include the release of $5,592,323.80 in insurance proceeds to BPC Lender to be applied to pre-petition loan documents from Sept. 20, 2018.

The insurance proceeds condition drew an objection from Highgate. Urban Commons maintains that the insurance proceeds constitute collateral in which BPC Lender has a first priority. The insurance proceeds relate to an Oct. 4, 2020 water damage loss sustained at the hotel.

Urban Commons is a Corona Del Mar, Calif.-based company that modernizes underperforming hotels. The company filed Chapter 11 bankruptcy on Nov. 15 under case number 22-11509.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.