MV Realty loan agent objects to motion for cash collateral use

By Sarah Lizee

Olympia, Wash., Sept. 27 – MV Realty PBC, LLC’s motion for approval to use cash collateral drew an objection from loan agent Monroe Capital Management Advisors, LLC, according to documents filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Florida.

“Debtors commenced these Chapter 11 cases without the benefit of coordinating with, or even the knowledge of, their prepetition secured lenders,” the agent said in the objection.

“Because of this, the secured parties and debtors have not had the opportunity to collaborate on any potential use by debtors of the secured parties’ cash collateral.”

Monroe Capital said that the secured parties may be willing to negotiate an appropriate cash collateral arrangement with sufficient adequate protection terms and conditions, but the terms proposed by debtors in the motion are inadequate.

“Thus, the secured parties cannot provide consent to the use of their cash collateral at this time,” Monroe Capital said.

In the motion, the company said it owes Monroe $40 million, and it owes the Goodwood Funds close to $12 million.

The company is hoping to use $1.04 million in cash collateral over 21 days.

Background

The company said that since November 2022, certain states have started actions against the debtor, among others. The allegations include telemarketing violations and unfair or deceptive trade practices.

In defending against the state actions and other regulatory matters, the debtors have spent and incurred millions of dollars in legal fees, the company said.

“The debtors commenced these Chapter 11 proceedings to protect and maximize the value of their assets and for the purpose of implementing one or more strategies aimed at alleviating or otherwise minimizing the financial strain of the state actions,” the company said.

“The debtors also intend to protect the assets from any adverse creditor action, and otherwise preserving estate assets for the benefit of all creditors.”

The Boca Raton, Fla.-based real estate company filed bankruptcy on Sept. 22 under Chapter 11 case number 23-17590.

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