Merit Group gets final OK to access $55 million in DIP financing despite committee objection

By Lisa Kerner

Charlotte, N.C., June 8 - Merit Group, Inc. was granted final approval on Wednesday by the U.S. Bankruptcy Court for the District of South Carolina to obtain $55 million of debtor-in-possession financing from Regions Bank, according to an attorney familiar with the case.

Interest will be Libor plus 725 basis points.

The DIP loan will mature on the earliest of three months from closing or the closing of a sale of the company's assets.

As previously reported, the company's recently formed official committee of unsecured creditors, appointed just last week had objected to Merit's request to obtain final approval for the financing unless certain provisions were eliminated.

Those provisions included the superpriority administrative claim status granted to the DIP lender that has priority over all other administrative claims, completion of a sale of the debtors' assets within 90 days of the petition date and the $175,000 closing fee for the DIP loan.

Merit, a Spartanburg, S.C., paint sundry distributor, filed for bankruptcy on May 17. The Chapter 11 case number is 11-03216.

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