Incora closes in on final DIP order after ‘hard-fought’ discussions; notes trustee still objects

Chicago, July 7 – Wesco Aircraft Holdings, Inc. (Incora) is close to coming to an agreement with the official committee of unsecured creditors for its case and debtor-in-possession secured parties regarding a final order for DIP financing, according to a statement filed by the committee with the U.S. Bankruptcy Court for the Southern District of Texas.

While close, it was noted that there are still a few remaining issues to resolve before the final DIP financing hearing.

So far, modifications include the following:

• The post-trigger fee cap has been increased to $6 million from $5 million;

• A clarification that neither the first lien noteholder group, the prepetition secured notes trustees, nor the prepetition ABL agent shall be entitled to deliver a trigger notice until and unless the DIP obligations have been indefeasibly paid in full and the DIP commitments;

• A provision that the committee will receive all financial reporting substantially contemporaneously with the DIP agent;

• An increase in an investigation budget to $150,000;

• A preservation of the committee’s challenge rights with respect to the credit bidding provisions in the final DIP order in accordance with paragraph 19 of the final DIP order;

• The inclusion of a mechanism to provide notice of the basis for any distributions on account of any 507(b) claim that is included in a plan of reorganization;

• A clarification that no event of default (as defined in the DIP note purchase agreement) under section 7.01(b) of the DIP note purchase agreement shall occur solely due to the occurrence of a breach of default under any of the prepetition debt documents;

• An increase in facility-based fees or the creation of additional facility-based fees as a material DIP amendment that requires further court approval;

• The certainty that there are no restrictions on how carve-out funds are to be disbursed other than the aggregate cap on funds used for the committee investigation as to the prepetition secured parties; and

• A provision that the DIP secured parties and the prepetition secured parties shall use commercially reasonable efforts to first satisfy the claims and liens of such parties from applicable collateral other than avoidance proceeds or proceeds of claims or causes of actions against the debtors’ current or former directors and officers before seeking to recover from avoidance proceeds or proceeds of claims or causes of actions against the debtors’ current or former directors and officers before seeking to recover from avoidance proceeds or proceeds of claims or causes of actions against the debtors’ current or former directors and officers.

BOKF objection

Not all entities agree that the changes are enough to warrant approval of the final DIP financing order.

In a separate objection filed with the court, BOKF, NA objected to the final orders as trustee of the company’s notes.

BOKF notes that the DIP motion involves classes that have benefitted from insider transactions.

Some of the DIP purchasers’ prepetition secured parties are defendants on certain claims.

BOKF says that the debtors should be provided with the liquidity they need to maintain their business; however, creditors and the committee should not be prejudiced before their rights can be adjudicated.

Based in Fort Worth, Incora is a provider of comprehensive supply chain management services to the global aerospace and other industries. The company filed bankruptcy on June 1 under Chapter 11 case number 23-90611.

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