Strike’s DIP facility draws objection from unsecured creditors

By Sarah Lizee

Olympia, Wash., Dec. 30 – Strike, LLC’s official committee of unsecured creditors objected Wednesday to the company’s proposed $112.6 million debtor-in-possession facility, according to a filing with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the company is seeking approval of a $112.6 million senior secured superpriority priming DIP credit facility, consisting of a new money multiple-draw term loan facility of up to $26 million, comprised of $22 million in tranche A DIP loans and $4 million in tranche B DIP loans from American Industrial Partners, Ltd. (AIP), and a roll-up of the prepetition senior loan facility held by AIP in the amount of $86.6 million to refinance in its entirety AIP’s prepetition senior loan secured debt.

The new money DIP loans are intended to provide the debtors with liquidity to fund the costs of the cases, including the sale process pursuant to which AIP has submitted a stalking horse bid in an amount equal to the amount of the new money DIP loans actually drawn plus AIP’s senior loan secured obligations to acquire substantially all of the debtors’ assets.

“No legitimate or rational business justification has been provided, however, for the roll-up or for the other overreaching proposed terms of the DIP facility which are structured in a manner to further entrench AIP’s position in these cases and limit the committee’s ability to acquit its fiduciary duties,” the committee said in its objection.

The committee said it understands the value inherent in a going-concern sale and is eager to work with all parties to ensure that the sale process currently underway results in a value maximizing transaction, whether with AIP or another party.

“AIP has established itself as a formidable party in these cases, and has imposed extensive case controls and tight milestones in furtherance of its credit bid and stated desire to own the debtors’ assets,” the committee said.

The group said that through the sale process, AIP will likely seek a good faith purchaser finding and a full release, in addition to a designation that the assets are to be sold free and clear.

“AIP must pay to play for the benefits it seeks from these cases, and its restrictive hold on the debtors should not come at the expense of unsecured creditors or the committee appointed to represent their interests,” the committee said.

Strike is based in The Woodlands, Tex., and is a full-service pipeline, facilities and energy infrastructure solutions provider. The company filed bankruptcy on Dec. 6 under Chapter 11 case number 21-90054.

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