Eye Care Leaders’ replacement DIP loan draws committee objection

By Sarah Lizee

Olympia, Wash., Feb. 15 – Eye Care Leaders Portfolio Holdings, LLC’s motion for approval of a replacement $8 million debtor-in-possession facility drew a limited objection from the official committee of unsecured creditors, according to documents filed Thursday with the U.S. Bankruptcy Court for the Northern District of Texas.

The company filed a motion on Wednesday seeking approval of replacement financing with Colorado Bankers Life Insurance.

Eye Care Leaders said that although the total commitment under the new facility will be the same as the prior facility, the economics are now more favorable to the debtors.

The new financing would carry a 10% non-default interest rate rather than 15%, and a 12% default interest rate rather than 17%.

There are also no origination, commitment, closing or other fees, other than paying the out-of-pocket fees, costs disbursements and expenses of the replacement DIP lender.

The financing also provides for more flexibility on the case milestones, the company said.

The committee said Thursday that while it is supportive of the debtors’ seeking approval of the less expensive financing option, it has concerns regarding some terms of the financing, including recent revisions seemingly made by the replacement DIP lender.

The committee said it also has concerns regarding the appropriateness of paying a closing fee to the original DIP lender, Create Capital, LLC.

“If the closing fee is required to be paid by the debtors, Create Capital will earn a total of $500,000 (or nearly 40% of the $1.3 million lent under the original DIP facility) plus interest payable on the $1.3 million funding after having lent the debtors funds for just 17 days,” the committee said in the objection.

Eye Care Leaders is a Durham, N.C.-based practice management software provider for eye doctors. The company filed bankruptcy on Jan. 16 under Chapter 11 case number 24-80001.

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