Burro Sand secured creditor objects to DIP financing motion

By Sarah Lizee

Olympia, Wash., Sept. 8 – CL V Funding LLC, a secured creditor of Aequor Mgt LLC, which does business as Burro Sand, objected to the company’s motion for a final order authorizing it to access a $1.5 million debtor-in-possession multiple-draw term loan credit facility with Independence TX LLC as lender and to use cash collateral, according to documents filed Friday with the U.S. Bankruptcy Court for the Eastern District of Texas.

CL V said it holds a first-priority lien on substantially all of the debtor’s assets, subject only to a potential lien on the debtor’s assets in favor of Independence Texas.

The amount of CL V’s claim against the debtors exceeds $40 million.

On May 5, the debtor filed a plan indicating their intent to liquidate through Chapter 11, but the debtors haven’t made any progress toward a viable plan, are not generating any income, and their financial condition is deteriorating, CL V said.

“Debtor seeks DIP financing under the guise of needing cash to maintain its current assets and operations and to fund the orderly sale of its assets, including paying its consultant to run a sale process,” CL V said in the objection.

“In reality, the debtor’s operation has been defunct for years and substantially all of its most valuable tangible assets were removed by ITX, an insider of the debtor, to support ITX’s own mining operation.

“Thus, there is nothing to maintain, and other than land, there is nothing of value to sale.”

CL V said it strongly opposes the priming of its lien as requested in the DIP motion and believes the requested relief is “wholly inappropriate” under the circumstances of this case.

Tyler, Tex.-based Burro Sand is a frac sand mining and processing plant. The company filed bankruptcy on Jan. 5, 2023 under Chapter 11 case number 23-60010.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.