Urban Commons obtains interim approval for DIP financing

Chicago, Dec. 29 – Urban Commons 2 West LLC won interim approval for post-petition financing and use of its cash collateral, according to an order filed with the U.S. Bankruptcy Court for the Southern District of New York.

The company was seeking up to $6,046,157 in the form of a loan from BPC DIP Lender, LLC.

Upon entry of the interim order, $816,425 was made available.

The judge, Philip Bentley, made his own modifications to the order, mainly removing references to the pre-petition lender.

The judge also noted that the insurance proceeds in the insurance escrow shall not be considered cash collateral, incorporating an objection.

The insurance proceeds condition had drawn an objection from Highgate Hotels, LP, which is now assigned to the official committee of unsecured creditors. Urban Commons maintains that the insurance proceeds constituted collateral in which BPC Lender had 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.

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