Wave2Wave Communications' $3.5 million DIP facility approved

By Lisa Kerner

Charlotte, N.C., March 19 - Wave2Wave Communications, Inc. received court approval to obtain $3.5 million of debtor-in-possession financing from the Robert DePalo Special Opportunity Fund, LLC in the U.S. Bankruptcy Court for the District of New Jersey on Monday, according to an attorney familiar with the case.

As previously reported, the DIP lender managing member Robert DePalo is the chief executive officer and managing member of first-lien and second-lien lenders Brookville and Veritas.

The proposed DIP facility will be a "sandwich DIP" loan, meaning it will be subordinate to Brookville and Veritas and prime Mennen Trust and M Brothers debt, with the consent of all of those parties.

The facility will mature three months from the date of the DIP note. Interest will be 10%.

Proceeds will be used to make utility-related payments, payments required under a consulting agreement with DePalo, a $500,000 payment due to Arjent Ltd. (UK), LLC and to pay all DIP loan fees.

Wave2Wave said $2.6 million of the DIP facility will be available on an interim basis, and $900,000 will be available after entry of a final order.

The company will pay a 5% commitment fee.

Wave2Wave is a Hackensack, N.J.-based provider of high-speed broadband services. It filed for bankruptcy Feb. 17 under Chapter 11 case number 12-13896.

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