Point Blank committees get interim OK of $25 million replacement loan

By Caroline Salls

Pittsburgh, Dec. 13 - Point Blank Solutions, Inc.'s official committee of unsecured creditors and official committee of equity holders received interim court approval of a $25 million replacement post-bankruptcy secured loan, which will be used to repay the company's existing debtor-in-possession financing, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

The final hearing is scheduled for Dec. 28.

According to the motion, Lonestar Partners, LP, Privet Fund Management LLC and Prescott Group Capital Management have agreed to provide an alternate source of post-bankruptcy financing, including the fully negotiated $25 million post-bankruptcy secured credit facility.

The replacement DIP loan will terminate on the earliest of May 16, 2011, the closing of a sale of substantially all company assets and the plan of reorganization effective date.

Interest will be Prime rate plus 1,100 basis points.

As previously reported, the DIP lenders have also committed to provide an equity infusion of between $15 million and $25 million on the plan effective date through a backstopped rights offering that will be made available to both unsecured creditors and some shareholders.

Point Blank, a Pompano Beach, Fla., producer of body armor systems for law enforcement and the military, filed for bankruptcy on April 14, 2010. Its Chapter 11 case number is 10-11255.

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