HRP Myrtle gets court approval to release $6.25 million to senior notes trustee

By Jennifer Lanning Drey

Portland, Ore., Dec. 18 - HRP Myrtle Beach, LLC obtained court approval of a stipulation allowing the release of funds to the trustee for its floating-rate senior secured notes due 2012, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company missed a semiannual interest payment of $6.25 million due on the notes on Oct. 1, according to the motion requesting the approval.

HRP Myrtle is party to a cash collateral and distribution agreement related to the $155 million of outstanding notes, which were issued by HRP Myrtle, HRP Myrtle Beach Capital Corp. and HRP Myrtle Beach Operations, LLC, according to the filing.

Under the distribution agreement, Deutsche Bank Trust Co. Americas is the disbursement agent related to the notes and controls a senior interest reserve account held solely to pay senior notes trustee, Wilmington Trust Co.

The account currently has $7.92 million plus accrued interest.

HRP Myrtle's Chapter 11 bankruptcy filing constitutes an event of default under the notes indenture. Accordingly, Deutsche Bank must disburse funds from the senior interest reserve account as directed by the senior notes trustee.

However, Wilmington Trust delayed issuing an entitlement order directing Deutsche Bank to disburse the senior interest reserve due to the possible impact of the automatic stay on Wilmington Trust's rights and obligations to issue the entitlement order and for Deutsche Bank to disburse the funds.

HRP is the Myrtle Beach, S.C.-based parent of Hard Rock Park. The company filed for bankruptcy on Sept. 24, and its Chapter 11 case number is 08-12193.

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