Holiday Inn Express D.C. gets interim approval of cash collateral use

By Sarah Lizee

Olympia, Wash., March 9 – Birchington, LLC, doing business as Holiday Inn Express Washington D.C. Downtown, received interim authorization to use cash collateral, according to an interim order filed Wednesday with the U.S. Bankruptcy Court for the District of Columbia.

As previously reported, secured creditor Sschof II Washington DC, LLC had filed a motion seeking to block the debtor’s access to the cash collateral.

Sschof said the company is indebted to it under a real estate note with about $63.68 million outstanding, plus attorney fees and expenses. The creditor said the obligations are secured by liens and security interests encumbering all assets of the debtor.

Sschof said that on Feb. 21, the day after the petition was filed, it sent proposed counsel for the debtor an email stating that it doesn’t consent to the use of cash collateral absent entry of an order that provides for, among other things, payment of interest at the non-default contract rate and Sschof’s attorney’s fees and expenses.

When the debtor filed the cash collateral motion, it said the parties still hadn’t been able to come to an agreement on the cash collateral use.

However, the interim order on March 8 said that the lender had consented to the cash collateral use only on conditions contained within the order.

Among other things, the lender was granted a continuing replacement security interest in and lien on all prepetition collateral of the lender (excluding $170,217 in cash at United Bank), and property acquired by the debtor after the petition date.

The debtor will make monthly interest-only payments to the lender at the non-default rate of interest. The company was to make a payment of $250,000 to the lender by March 9.

Payment of professional fees and expenses, as allowed by the court, will also be made to the lender.

The order gave the company interim access to the cash collateral through March 31.

A final hearing is scheduled for March 30.

The Washington, D.C.-based hotel owner filed bankruptcy on Feb. 20 under Chapter 11 case number 23-00057.

© 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.