Christmas Tree Shops gets final OK of DIP after committee resolution

By Sarah Lizee

Olympia, Wash., June 6 – Christmas Tree Shops, LLC received final approval of a $45 million debtor-in-possession facility after reaching a resolution with the official committee of unsecured creditors, which had previously filed an objection to the motion, according to documents filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

Following those negotiations, adjustments were made to the facility’s budget and third-party challenge rights.

Also, the early termination fee under the prepetition asset-based facility was adjusted so that, if on or before June 30, the committee waives its rights to assert a challenge against all prepetition secured parties, liens and obligations, then $416,750 of the prepetition ABL obligations (which amount represents 25% of the revolving early termination fee) will be deemed forgiven, and preserved for recovery by unsecured creditors.

The DIP and prepetition lenders also agreed that they would not recover from avoidance proceeds and proceeds form commercial torts until after their recovery against all other DIP collateral and prepetition collateral.

Additionally, the prepetition and DIP parties agreed to support the retention of SSG Advisors, LLC as investment banker to the debtors.

Also, as part of a consensual resolution of some landlords’ objections to the DIP financing, the debtors are directed to reserve for stub rent in the weekly amounts set forth in the updated approved budget.

As previously reported, Christmas Tree Shops received a commitment for the DIP financing from Eclipse Business Capital SPV LLC and ReStore Capital LLC which will provide the company with enough financing to maintain normal business operations during the Chapter 11 process.

Interest on the facility is SOFR plus 775 basis points.

There is a 1% closing fee, a 0.5% commitment fee, an administrative fee of $7,000 per month, a 0.5% exit fee, and a $250,000 exit fee to ReStore.

The facility is set to mature on the earlier of Nov. 5 and the occurrence of a termination event.

The company also received final approval to use the cash collateral of its prepetition lenders.

Middleborough, Mass.-based Christmas Tree Shops sells home goods with a specialty focus on seasonal products. The company filed bankruptcy on May 5 under Chapter 11 case number 23-10576.

© 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.