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Coin Cloud gets interim approval to use $2.5 million of DIP financing
By Sarah Lizee
Olympia, Wash., Feb. 21 – Cash Cloud, Inc., which does business as Coin Cloud, received court approval to access $2.5 million under a proposed $5 million debtor-in-possession facility, according to an interim order filed with the U.S. Bankruptcy Court for the District of Nevada.
The company had asked for access to $3 million of the facility.
As previously reported, creditor Cole Kepro International, LLC objected to the financing early last week. Prior to the petition date, Cole Kepro manufactured and sold digital currency kiosks that Coin Cloud uses in the operation of its business.
Recently, Coin Cloud and Cole Kepro were engaged in litigation that arose out of the debtor’s failure to pay amounts owed for a portion of the kiosks delivered under a purchase order in the amount of $34 million, and the debtor’s anticipatory repudiation of a separate purchase order in the amount of $100 million.
In the litigation, Cole Kepro asserted a secured claim of about $10 million and an unsecured claim in an amount to be determined.
The creditor said the debtor is seeking the $5 million of DIP financing without demonstrating the need for it, and that the debtor has significant equity over and above its disputed and undisputed secured claims.
“Any relief granted with respect to the motion should be limited to the extent necessary to avoid immediate, irreparable harm,” Cole Kepro said in the objection.
“All remaining relief should be deferred until such time that an official committee of unsecured creditors can review and respond.”
A committee was appointed on Friday.
Interest on the facility is 15% per annum, payable in kind. The default rate would be 20% PIK.
A final hearing is scheduled for March 17.
The Las Vegas-based digital currency machine company filed bankruptcy on Feb. 7 under Chapter 11 case number 23-10423.
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