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Pegasus Home gets approval of DIP financing, bid procedures
By Sarah Lizee
Olympia, Wash., Sept. 28 – Pegasus Home Fashions, Inc. received approval of debtor-in-possession financing and bid procedures for its assets, according to two orders filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.
As previously reported, the company lined up a stalking horse agreement with an affiliate of prepetition secured lender Blue Torch Finance, LLC. Webster and Blue Torch are prepetition secured lenders and DIP lenders to the company.
The purchase price would include assumed liabilities, assumption of or payment in cash of all debt under a prepetition revolver and a $64.1 million credit bid of prepetition term loan debt and debtor-in-possession term loan debt.
Originally, the agreement provided for an expense reimbursement of up to $1 million. However, the court approved an expense reimbursement of $100,000 instead.
Under the bid procedures, the bid deadline is 5 p.m. ET on Oct. 24, an auction will take place on Oct. 27, and a sale hearing will take place on Nov. 2.
DIP financing
The $25 million in debtor-in-possession financing consists of a $20 million asset-based revolver with Webster Business Credit and a $5 million term loan with Blue Torch Finance.
The DIP revolver will bear interest at SOFR plus 250 basis points, and the DIP term loan will bear interest at SOFR plus 800 bps.
The financing also includes a rollup of all outstanding ABL debt.
The facilities are set to mature in 150 days from closing.
Elizabeth, N.J.-based Pegasus Home Fashions manufactures bedding and home products. The company filed bankruptcy on Aug. 24 under Chapter 11 case number 23-11235.
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