Elements Behavioral Health committee balks at additional financing

By Caroline Salls

Pittsburgh, Oct. 22 – Elements Behavioral Health, Inc.’s official committee of unsecured creditors objected to the company’s motion to amend its debtor-in-possession credit agreement to allow it to obtain $18 million in supplemental financing, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

“Since its appointment, the committee has raised numerous concerns that these Chapter 11 cases were initiated and being run for the exclusive benefit of Project Build Behavioral Health, LLC, the debtors’ pre-petition senior secured lender, DIP lender and stalking horse bidder,” the objection said.

Despite withdrawing its objection to Elements’ asset sale and spending significant time working with the case parties to negotiate the terms of a plan of liquidation, the committee said “following months of delays in filing the plan, PBBH is now reneging on its agreement to fund certain administrative expense claims, including the fees and expenses of the committee’s professionals.”

The creditor group said the refusal to fund the expense claims “will render the debtors’ estates administratively insolvent and any Chapter 11 plan unconfirmable.”

Elements is a Long Beach, Calif.-based behavioral health company. The company filed bankruptcy on May 23 under Chapter 11 case number 18-11212.

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