Elements Behavioral Health wins access to $4.5 million of financing

By Caroline Salls

Pittsburgh, Nov. 6 – Elements Behavioral Health, Inc. obtained access to $4.5 million of a proposed additional $18 million in supplemental debtor-in-possession financing under a third interim order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The order said the financing is necessary to the Elements debtors’ continued operations.

The interim financing will allow the company to fund its operations through Nov. 27, at which time the final hearing will be held.

The company was ordered to meet with its official committee of unsecured creditors and the DIP financing lender no later than Dec. 1 to discuss additional financing through the later of the sale closing or the wind down of Elements’ estates.

As previously reported, the committee objected to the company’s motion to amend its DIP credit agreement.

“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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