Lifesize DIP rollup gives unfair advantage to lender, committee says

By Sarah Lizee

Olympia, Wash., June 29 – Lifesize Inc.’s proposed $20 million debtor-in-possession financing package with existing lender First Citizens Bank & Trust Co. drew a limited objection from the official committee of unsecured creditors, according to documents filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

The company said the $15 million rollup included in the facility’s amount gives an unfair advantage to the lender, as it would put one of the debtors’ most valuable and crucial unencumbered assets – avoidance actions – out of reach of unsecured creditors through the lien provided to the DIP lender.

“Having a lien on avoidance actions would constitute an improper windfall for the DIP lender at the expense of the debtors’ unsecured creditors,” the committee said in its objection.

The group also said the liens on commercial tort claims and the proceeds therefrom are improper, and that the releases and waivers granted to prepetition secured parties are overly broad.

Lifesize is an Austin, Tex.-based provider of video conferencing and omnichannel contact center solutions. The company filed bankruptcy on May 16 under Chapter 11 case number 23-50038.

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