Victory Memorial Hospital looks to pay deposit toward potential $12 million DIP financing

By Caroline Salls

Pittsburgh, June 21 - Victory Memorial Hospital requested court approval to pay a $25,000 deposit in connection with a commitment letter of intent for $12 million in debtor-in-possession financing, according to a Thursday filing with the U.S. Bankruptcy Court for the Eastern District of New York.

Clearbid Capital is the potential DIP lender.

Under the commitment letter of intent, the DIP facility will specifically provide advances up to the lesser of $12 million or 85% of the net collectable value of the hospital's accounts receivable.

Interest will be Libor plus 400 basis points.

Victory said the letter of intent requires it to make a deposit before the lender performs due diligence and further proceeds with the DIP facility.

The deposit will be applied toward closing costs and expenses if the DIP proceeds to closing.

The Brooklyn, N.Y.-based hospital filed for bankruptcy on Nov. 15, 2006. Victory Memorial's Chapter 11 case number is 06-44387.

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