Velocity Express granted final access to $14 million DIP facility

By Alice Popovici

New York, Oct. 16 - Velocity Express Corp. was granted final access to its $14 million debtor-in-possession facility from Burdale Capital Finance, Inc. during a Friday hearing with the U.S. Bankruptcy Court for the District of Delaware, despite objections filed by the creditors committee.

In September the company was granted interim access to the financing.

On Oct. 14 the company's committee of unsecured creditors filed an objection claiming that the terms of the facility do not allow it to "adequately investigate and pursue other restructuring and sale opportunities."

As previously reported, the DIP facility will mature on the earliest of Dec. 7, the asset sale closing date, 21 days after entry of the interim order if a final order has not been entered, confirmation of a plan of reorganization and occurrence of an event of default.

Interest will be Base rate plus 600 basis points, with a 4% floor.

Velocity is required to pay a $175,000 closing fee.

Velocity Express, a regional delivery services provider based in Westport, Conn., filed for bankruptcy on Sept. 24. Its Chapter 11 case number is 09-13294.

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