Legacy Cares receives access to cash collateral and DIP financing

Chicago, May 5 – Legacy Cares, Inc. was granted access to its cash collateral on an emergency, interim basis, according to a signed order filed in the U.S. Bankruptcy Court for the District of Arizona.

The company needs the funds to operate its business and preserve its going concern value.

The debtor was also given permission to enter into a debtor-in-possession credit facility on an interim basis with UMB Bank, NA.

UMB is receiving security for the facility in the form of security interests and liens on all property of the estate with the same priority as UMB’s liens on the petition date, junior liens on all property of the estate and senior liens on all property of the estate that was unencumbered on the petition date.

Previously reported, Legacy Cares is seeking court approval of a $9 million debtor-in-possession facility with UMB as trustee.

Interest on the facility is 12% per annum. Default interest would jump up to 14%.

There is a fee on 2% of the total borrowing cap.

The facility is set to mature on Sept. 30, subject to earlier maturity following certain events.

The company was seeking interim access to $1.6 million of the facility.

A final hearing is scheduled for May 25.

Objections are due by May 19.

Legacy Cares is based in Mesa, Ariz. The Chapter 11 case number is 23-02832.

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