Ecko gets final approval on $7 million DIP loan from stalking horse

By Kali Hays

New York, April 24 - Ecko Unlimited obtained final approval of its proposed $7 million debtor-in-possession financing and the use of cash collateral, according to an April 24 order with the U.S. Bankruptcy Court for the District of New Jersey.

The company received interim access to up to $1.84 million of the financing April 7.

As previously reported, the financing lender for the DIP loan is Schuman, LLC, which is also the stalking-horse bidder for the company's assets.

The DIP loan will mature on the earliest of six months from the bankruptcy filing date, the effective date of a plan of reorganization, the closing date of a sale or liquidation of all or substantially all of the company's assets and a termination of the financing upon an event of default.

Interest will be 6%.

However, the financing cannot be used to pay any claim exceeding $50,000, and the company is required to file a weekly report of its expenditures with Schuman.

The use of cash collateral is conditioned upon the company making scheduled payments to reduce the total debt of the existing factor lien claims to $4 million by May 10.

Ecko, a New York-based clothing retailer, filed for bankruptcy April 2. The Chapter 11 case number is 14-14684.

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