PTC Seamless creditors object to terms of proposed $5 million DIP loan

By Kali Hays

New York, May 7 – PTC Seamless Tube Corp. secured creditor Robinson Mechanical Contractors, Inc. and Wells Fargo NA objected to the company’s proposed $5 million debtor-in-possession loan, according to separate Thursday filings with the U.S. Bankruptcy Court for the Western District of Pennsylvania.

As previously reported, the facility consists of a delayed-draw term loan and PTC is seeking interim access to $3 million of the loan.

Black Diamond Commercial Finance, LLC is the agent.

Robinson holds a secured mechanic’s lien against PTC real property totaling $13.51 million and claims that the loan “threatens to further subordinate [the] lien, largely for the benefit of insiders and professionals” while offering Robinson “nothing in exchange for the proposed priming of its lien,” according to its objection.

Furthermore, Robins claims that Black Diamond is an insider to the debtors as it is “affiliated with the holders of a majority of the equity” in PTC’s parent company.

As the administrative and collateral agent to PTC’s pre-bankruptcy ABL lenders, Wells Fargo holds first and second priority liens on all of PTC’s assets and claims that the proposed DIP loan agreement violates its rights and accommodations under the pre-existing intercreditor agreement.

Specifically, Wells Fargo objected to the DIP agreement to the extent that the Adequate Protection Liens granted to Wells Fargo on the ABL priority collateral are subordinate to the DIP liens and the carve-out, according to its objection.

Both objecting parties asked that the court deny the financing in its current form and order amendments consistent with the objections.

A hearing to consider interim approval of the loan is set for May 8.

PTC Seamless is a Wexford, Pa.-based steel tubing mill construction project that filed for bankruptcy on April 26. The Chapter 11 case number is 15-21445.

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