Galaxy Energy granted interim approval for $4.37 million line of credit; immediate access to $308,000

By Jennifer Lanning Drey

Portland, Ore., April 11 - Galaxy Energy Corp. received interim court approval Friday of a $4.37 million post-bankruptcy revolving line of credit from the Bruner Family Trust, according to an attorney.

The U.S. Bankruptcy Court for the District of Colorado granted the company permission to immediately access up to $308,000 of the funding.

The hearing for final approval is scheduled for April 25.

As previously reported, advances can be made on the line of credit through Sept. 30.

Interest will be 10%.

The loan is scheduled to mature on the earliest of Nov. 15, 2008, upon closing of a sale of substantially all company assets, upon the dismissal of the case or conversion to Chapter 7 bankruptcy and on the effective date of a plan of reorganization.

According to the motion, proceeds of the line of credit will be used to fund field work, drilling, general, administrative and bankruptcy expenses, utility deposits, contract operator assumption and cure amounts, as well as to fund interest payments on the company's senior notes.

The Bruner Trust is a family trust formed by 14% Galaxy shareholder Marc A. Bruner for the benefit of his children and grandchildren. Galaxy president and board chairman Marc E. Bruner is one of the trustees.

Galaxy, a Denver-based independent oil and gas company, filed for bankruptcy on March 14. Its Chapter 11 case number is 08-13164.

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