Orianna portfolio valued at $190 million; proceeds application denied

By Caroline Salls

Pittsburgh, Oct. 3 – The value of 4 West Holdings, Inc.’s (Orianna) transfer portfolio was set at $190 million in a Tuesday ruling made by the U.S. Bankruptcy Court for the Northern District of Texas.

In the order, the court denied Orianna’s motion to apply proceeds from the transfer portfolio to its debtor-in-possession credit agreement and working capital loan agreement. However, the court did leave the door open for the company to apply the proceeds through a confirmed Chapter 11 plan.

Orianna said in the motion for application of the proceeds that it filed bankruptcy to implement a global settlement with its largest creditor, Omega, in part through a transfer of the portfolio.

“Having received the benefit of the debtors’ transition of the transfer portfolio and a full marketing process and having provided the debtors’ estates with DIP financing that simply took out their pre-existing lender and provided limited incremental liquidity to the debtors’ estates, Omega now seeks to pull the plug on this case and drain the value available for all other constituents,” Orianna said in the Aug. 13 motion.

Specifically, the company said Omega attempted to terminate a restructuring support agreement, declare an event of default on the DIP financing and walk away from its remaining obligations.

“In doing so, Omega seeks to rob the estates of any consideration or value for the transfer portfolio,” the motion said.

As a result, Orianna said it asked the court to credit the value of the transfer portfolio against the outstanding balance under the DIP facility and working capital loan provided by Omega.

“This would enable the debtors to escape Omega’s inequitable chokehold and to effectuate a resolution to these cases in a fair manner for the benefit of all creditors,” the company said in the motion.

Dallas-based 4 West holds the Orianna Health Systems trademark. It filed for Chapter 11 on March 6, 2018 under case number 18-30777.

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