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Mervyn's amends stipulation to allow continued cash collateral use
By Caroline Salls
Pittsburgh, March 6 - Mervyn's Holdings, LLC requested court approval of a stipulation that gives the company continued access to cash collateral while it continues to wind down its operations and liquidate remaining assets, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.
Under the stipulation, which amends a previous court-approved settlement of an official committee of unsecured creditors' bid procedures objection and case conversion motion, the company is no longer required to stick to a budget in connection with the cash collateral use.
In addition, Mervyn's debtor-in-possession facility lenders have agreed to fund a $2 million professional fee reserve. The proceeds from the reserve will be used exclusively to pay the fees and expenses incurred by estate professionals from the bankruptcy filing date to the date of conversion or dismissal of the company's Chapter 11 bankruptcy case.
The committee still has the authority under Thursday's stipulation to investigate and prosecute potential causes of action on behalf of the company.
Also under the stipulation, the lenders of Mervyn's $30 million promissory note have agreed to forgo their rights to seek conversion or dismissal of the bankruptcy case or to contest the company's continued use of cash collateral.
The parties to the amended stipulation include the company, its official committee of unsecured creditors, DIP agent Wachovia Capital Finance Corp. and promissory note lenders SCSF Mervyn's (Offshore), Inc. and SCSF Mervyn's (US), LLC.
A hearing is scheduled for March 25.
Mervyn's, a San Francisco-based department store, filed for bankruptcy on July 29, 2008. Its Chapter 11 case number is 08-11586.
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