Smart Papers granted interim approval to use up to $20 million of DIP

By Caroline Salls

Pittsburgh, March 23 - Smart Papers, LLC obtained interim court approval to use up to $20 million of its proposed $46 million in interim debtor-in-possession financing from Wachovia Bank, NA, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

The facility includes a revolving loan with a limit of $33 million through April 27, $27 million from April 28 to June 8 and $25 million thereafter, with a $46 million maximum credit.

In addition, there is a supplemental loan limit of $1 million through April 30 and $1.25 million thereafter.

Maturity is the earliest of March 22, 2007 or completion of a plan of reorganization.

Maturity on the supplemental loan is the earlier of an event of default or March 22, 2007. There will be a early termination fee of 50 basis points.

Smart Papers will pay a $460,000 DIP facility fee.

The final hearing is scheduled for April 10.

Smart Papers, a Hamilton, Ohio-based paper manufacturer, supplier and marketer, filed for bankruptcy on Tuesday. The Chapter 11 case number is 06-10269.

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