Seaboard Realty secures DIP facility, $141 million stalking horse bid

By Caroline Salls

Pittsburgh, March 21 – Seaboard Realty, LLC requested court approval to obtain $4 million of debtor-in-possession financing from AREG Wedge Portfolio LLC, according to a motion filed March 18 with the U.S. Bankruptcy Court for the District of Delaware.

The company said it has been in negotiations with its mortgage lenders regarding funding of its Chapter 11 cases, but many of the mortgage lenders continue to object to Seaboard’s use of cash collateral to fund the cases and, in particular, restructuring costs.

“The debtors have been diligently working with their individual mortgage lenders, certain investors, and third parties, to negotiate a path forth to fund a competitive sale and/or plan process,” the motion said.

“In some instances, the debtors received proposals from their mortgage lenders (but to fund only a fraction of the restructuring costs requested and required and for a period insufficient to run a fulsome sale process that would maximize the value of the debtors’ assets), and in other instances, the mortgage lenders have served discovery, filed objections, or engaged in motion practice, all of which speak to further delays, not an expedient path forward.

“Thus, despite the court’s clear statements at the February 29 hearing that these cases must be funded, the mortgage lenders continue to refuse to permit any meaningful use of cash collateral for restructuring costs.”

As a result, Seaboard said it entered into an agreement with AREG to provide a junior, new money, cross-collateralized DIP financing facility, which will supplement the proposed order authorizing the use of cash collateral for purposes of operating disbursements “in the event that an agreement cannot be reached whereby the restructuring costs in these cases would be funded through the use of cash collateral.”

In addition, the company said the DIP lender submitted a letter of intent to act as a stalking horse bidder for the purchase of substantially all of the debtors’ assets with a $141 million offer.

Interest on the proposed DIP loan will be 14%.

The facility will mature on the earliest of July 29, 30 days after the date a sale of all or substantially all of the company’s assets and the acceleration of the loans or termination of the DIP commitment.

Seaboard is seeking interim access to $1 million of the DIP financing.

Seaboard owns office, hotel and residential properties throughout Stamford, Conn. The company filed for bankruptcy on Dec. 14 under Chapter 11 case number 15-12507.

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