Metropolitan 885 Third Avenue can use cash collateral through March

By Lisa Kerner

Charlotte, N.C., Dec. 8 - Metropolitan 885 Third Avenue Leasehold, LLC was granted approval to use cash collateral through March 31, 2011, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Metropolitan 885 made a pre-packaged Chapter 11 bankruptcy filing in November after reaching a plan support agreement with principal secured lender Royal Bank of Canada and an equity commitment agreement with New Lipstick LLC.

RBC, the company's largest unsecured creditor, has an $80 million claim for the unsecured deficiency portion of a $210 million bank loan.

The bank elected to accelerate the loan debt after Metropolitan allegedly failed to maintain a $2.3 million balance in a debt service fund.

Under a plan support agreement, RBC agreed to reduce the outstanding principal amount of the loan to $130 million, and Metropolitan will be required to prepay a $15 million portion, leaving a $115 million balance.

Metropolitan owns the leasehold interest in the "Lipstick Building" in New York. The company filed for bankruptcy on Nov. 16. Its Chapter 11 case number is 10-16103.

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