South Edge trustee granted interim access to $4.5 million of financing

By Caroline Salls

Pittsburgh, July 25 - South Edge, LLC's Chapter 11 trustee was granted interim court approval to use $4.5 million of a $21.4 million senior priming secured post-bankruptcy loan from affiliates of the company's settling builders, according to a July 25 filing with the U.S. Bankruptcy Court for the District of Nevada.

The final hearing is scheduled for Aug. 12.

The facility will mature on the earliest of the termination of the company's plan support agreement, termination of a trustee consent agreement, the effective date of a plan of reorganization and Nov. 30.

There will be no interest on the loan, unless a default occurs, at which time the interest rate would be Prime rate plus 500 basis points.

According to the motion, the facility was made possible by a recent settlement between the settling builders, the company's pre-bankruptcy lender agent and its credit agreement lenders.

The trustee said the settlement will be implemented through a plan of reorganization.

The loan is designed to bridge South Edge's estate to a near-term bankruptcy exit.

South Edge is a joint venture between KB Home wholly owned subsidiary KB Home Nevada Inc. and a third-party property management firm.

An involuntary bankruptcy case was filed against South Edge on Dec. 9, 2010. The Chapter 11 case number is 10-32968.

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