Musicland's interim DIP financing carried over until Feb. 17 hearing

By Rebecca Melvin

Princeton, N.J., Feb. 7 - The judge for Musicland Holding Corp.'s bankruptcy court case signed an order to carry over interim access to debtor-in-possession financing until the next hearing scheduled for Feb. 17, according to a company spokesperson.

Judge Stuart Bernstein of the U.S. Bankruptcy Court for the Southern District of New York extended the interim court approval Musicland received last month to access $60 million of an up to $75 million revolving credit DIP facility from Wachovia Bank, NA., the spokesperson said.

"As regards the DIP, the judge just signed a second interim order carrying the date over," the spokesman said.

DIP financing was one of about 10 items on the hearing agenda Tuesday. All of the items were either resolved or carried over, the spokesperson said.

Proceeds from the DIP will be used for general operating and working capital purposes.

According to the motion, the company wants to convert its pre-bankruptcy loan agreement with Wachovia into the DIP facility. The company has $38.1 million outstanding under the pre-bankruptcy facility.

Musicland, a Minnetonka, Minn., specialty retailer of pre-recorded entertainment software products, filed for bankruptcy on Jan. 12. The company's Chapter 11 case number is 06-10064.

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