All American DIP approved; creditors committee withdraws conversion motion, sale procedures appeal

By Caroline Salls

Pittsburgh, May 21 - All American Semiconductor, Inc. obtained final court approval Monday of its up to $25 million of debtor-in-possession financing from Harris NA, according to a company news release.

All American said the DIP is expected to give it sufficient liquidity to continue operations during its Chapter 11 case.

Under the DIP agreement, any administrative expense claim of the DIP lenders will be subordinate to the first $750,000 in proceeds of unencumbered assets, and the DIP lenders will be entitled to recover the next $5.5 million of proceeds on unencumbered assets on account of their administrative expense claims, as well as 50% of any proceeds in excess of $20 million.

As previously reported, the DIP will expire on the earliest of June 8; the earlier of the effective date of a plan of reorganization or 30 days after plan confirmation; upon the dismissal or conversion of the Chapter 11 case; upon appointment of an examiner or trustee; upon the completion of a sale of substantially all company assets; and upon occurrence of an event of default, at the lenders' option.

Interest will be Base rate plus 300 basis points.

The company will pay a $250,000 commitment fee and a $50,000 agency fee.

The company's official committee of unsecured creditors also agreed to withdraw its motion to convert the case to Chapter 7 or to appoint a Chapter 11 trustee and to withdraw its appeal of the court's order authorizing sale and bidding procedures for the sale of substantially all of All American's assets.

Following the auction and sale hearing, the sale is expected to close no later than June 8.

All American, a Miami-based distributor of electronic components, filed for bankruptcy on April 25 in the U.S. Bankruptcy Court for the Southern District of Florida. Its Chapter 11 case number is 07-12963.

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