Chem Rx first-lien agent seeks loan payment ahead of lien waiver

By Caroline Salls

Pittsburgh, Aug. 3 - Chem Rx Corp. first-lien agent Canadian Imperial Bank of Commerce, New York Agency, filed a lawsuit Tuesday, asking the court to rule that specified liens on a $37 million second-lien credit facility cannot be waived until the $105 million first-lien facility is paid in full, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, the agent is asking the court to declare that an intercreditor agreement between Chem Rx, the first-lien agent and the agent for the second-lien loan prohibits the second-lien agent and Western National Life Insurance Co.'s investment adviser from waiving the liens until the first-lien loan is paid.

In addition, Canadian Imperial Bank is asking the court to remove second-lien agent SAC Domestic Capital Funding, Ltd. from Chem Rx's official committee of unsecured creditors in light of the liens.

According to the lawsuit, SAC and Western National investment banker AIG Asset Management (U.S.) LLC were required to waive their liens as a condition to their appointment to Chem Rx's creditors committee.

Chem Rx, a Long Beach, N.Y.-based provider of institutional pharmacy services, filed for bankruptcy on May 11. Its Chapter 11 case number is 10-11567.

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