Shops at Broad seeks approval of $1.5 million DIP financing

By Sarah Lizee

Olympia, Wash., Oct. 11 – Shops at Broad, LLC is seeking court approval of a $1.5 million debtor-in-possession term loan facility from SSG 2003 Trust, according to a motion filed with the U.S. Bankruptcy Court for the Northern District of Texas.

The lender is an insider and member of the debtor that has a $5 million unsecured claim for funds previously loaned to the company.

If the debtor’s plan is confirmed, the DIP loan will be repaid by the debtor in monthly installments starting on the effective date of the plan. Payments will be interest only at WSJ Prime plus 100 basis points over 24 months with the DIP loan maturing at the end of the 24th month.

In the event a plan other than the debtor’s plan is confirmed, the DIP loan will be due on the effective date of the confirmed plan.

If the automatic stay if lifted, the case is converted or a Chapter 11 trustee is appointed, the debtor’s ability to use the proceeds will immediately terminate unless otherwise authorized by the lender.

As a condition of the financing, SSG requires a junior lien on all property owned by the debtor. The lien will be subordinate to all existing liens and will not impair the debtor’s existing lienholders.

Proceeds will be used to help fund operating expenses.

The Atlanta-based retail property owner filed bankruptcy on Sept. 2 under Chapter 11 case number 22-42059.

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