| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers W > Headlines for Wickes Inc. > News item |
Wickes official creditors committee objects to DIP financing
By Jeff Pines
Washington, Feb. 10 - Wickes, Inc.'s official committee of unsecured creditors objected to the company's proposed $100 million debtor-in-possession financing, according to a Feb. 9 filing with the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division.
It said the lenders are trying to "insulate themselves" from bankruptcy code remedies and called the pricing "clearly excessive."
Wickes, a Vernon Hills, Ill.-based building supplies distributor, penned an agreement with Merrill Lynch Capital.
But what irks the committee is in the details. "The DIP financing as proposed in the interim document gives the lenders broad discretion to terminate the DIP financing, block cash collateral usage and quickly exercise remedies without any further court hearing based on numerous triggers," it said.
The committee also wants to get rid of the provision requiring any reorganization plan be acceptable to the lenders.
On pricing, it believes the facility is "essentially cash collateral usage, with little if any net advances." The committee called the pricing "outrageous."
For example, the commitment fee, administration fee and the success fee total $2.25 million. Also the letter of credit fee is 325 basis points, which the committee called "extraordinary" and a 50 basis point unused commitment fee, which it called "high."
To offer the company an alternative, it said it is "vigorously pursuing alternative DIP facilities."
A hearing is scheduled for Feb. 12. The company has until Feb. 24 to obtain a final order for its DIP facility.
Wickes filed for Chapter 11 on Jan. 20. The case number is 04-02221.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.