Prima Wawona’s proposed DIP loan draws objection from other lenders

By Sarah Lizee

Olympia, Wash., Jan. 17 – MVK FarmCo LLC’s (Prima Wawona) motion seeking approval of a $22 million debtor-in-possession multi-draw facility drew an objection from Cooperatieve Rabobank UA, New York Branch and Royal Bank of Canada, according to documents filed with the U.S. Bankruptcy Court for the District of Delaware.

The proposed financing is being provided by prepetition lenders Metropolitan Life Insurance Co., Compeer Financial, PCA and AgCountry Farm Credit Services, PCA, among other lenders.

Rabobank and RBC said the financing motion, if approved, would impair their sources of recovery.

The objectors said certain assets would be buried under the additional $22 million of post-petition secured debt without providing any adequate protection for the impairment to the lenders.

Also, the groundwork will have been laid for the DIP lenders to roll the post-petition secured debt into a senior secured exit facility that would prime a promissory note in favor of Rabobank and RBC, the lenders said.

The official committee of unsecured creditors has also filed an objection to the financing motion.

Prima Wawona is a Fresno, Calif.-based producer of stone fruit. The company filed bankruptcy on Oct. 13 under Chapter 11 case number 23-11721.

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