Easterday Ranches secures interim approval to use cash collateral

By Sarah Lizee

Olympia, Wash., Feb. 4 – Easterday Ranches, Inc. received interim approval to use the cash collateral in which Washington Trust Bank and CHS Capital, LLC may assert an interest, including any funds to be prepaid by Tyson Fresh Meats, Inc., according to an order filed Wednesday with the U.S. Bankruptcy Court for the Eastern District of Washington.

“The debtor has an immediate and critical need to use cash collateral, including funds prepaid by Tyson, in order to permit, among other things, preservation and maintenance of the debtor’s cattle and other assets,” the order said.

The company is authorized to use the cash collateral through the earliest of entry of a final order, the effective date of a plan, the date a sale of all of the company’s assets closes, and the date a material breach by the debtor is made under the interim order.

As previously reported, the cash collateral motion had drawn an objection from Washington Trust Bank, the lender of the company’s $45 million revolving credit facility. Washington Trust requested that the motion be denied or continued until the debtor explains how maintaining Tyson’s cattle benefits the estate, identifies property of the estate upon which the bank’s replacement and/or adequate protection liens would attach, and removes language that prevents the bank’s adequate protection lien from attaching to avoidance actions.

According to Wednesday’s order, Washington Trust and CHS were granted replacement liens, and, solely to the extent of any diminution in value, an additional and replacement security interest in and lien on all property and assets of the debtor’s estate, provided that the security interest and lien will be junior to any existing prior perfected security interests and liens.

In the event that the debtor obtains post-petition financing, the security interest and lien may be junior to any granted to the post-petition lenders.

Also, the security interest and lien will not attach to any claims, defenses, causes of action or rights of the debtor arising under sections 542-553 of the Bankruptcy Code and applicable state fraudulent transfer law, including all proceeds thereof.

A final hearing is scheduled for March 8.

Easterday Ranches is a Pasco, Wash.-based cattle operator. The company filed bankruptcy on Feb. 1 under Chapter 11 case number 21-00141.

© 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.