Katy Industries gets interim access to $4.5 million of DIP financing

By Caroline Salls

Pittsburgh, May 17 – Katy Industries, Inc. obtained court approval to use $4.5 million of a proposed $7.5 million of debtor-in-possession financing on an interim basis, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The final hearing is scheduled for June 16.

The financing will be provided by a newly created entity co-owned by Highview Capital, LLC and affiliates of Victory Park Capitol Advisors.

The company said the DIP financing will be used to maintain uninterrupted service and delivery of products to Katy customers during the completion of its sale transaction and to ensure payment to vendors for post-bankruptcy purchases.

Interest on the DIP financing will accrue at Libor plus 1,500 basis points.

The facility will mature on the earliest of 150 days from the bankruptcy filing date, upon completion of a sale of the collateral, 45 days after the bankruptcy filing date if a final order has not been entered, upon acceleration of the loan and termination of the commitments under an event of default and the effective date of a Chapter 11 plan.

Katy, a St. Louis-based manufacturer, importer and distributor of commercial cleaning and consumer storage products, filed bankruptcy on May 14. The Chapter 11 case number is 17-11101.

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