225 Bowery gets court approval to continue using cash collateral

By Sarah Lizee

Olympia, Wash., Jan. 19 – 225 Bowery LLC secured court approval to continue using cash collateral, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

The court also granted additional protection to the lender, 225 Bowery Lender LLC.

As background, prior to the petition date, the debtor negotiated the consensual use of cash collateral during the Chapter 11 case with the secured lender’s predecessor, Bank Hapaolim, BM, in exchange for an adequate protection package that included replacement liens, adequate protection claims and the payment of Bank Hapaolim’s professional fees.

Following 225 Bowery Lender’s acquisition of the $68 million secured loan from Bank Hapaolim in April 2023, a number of disputes arose between the debtor and the secured lender, including whether the adequate protection package approved prior to the loan acquisition was still sufficient under the circumstances.

After negotiations between the parties, the debtor filed a motion seeking approval of the first supplemental cash collateral through which the court authorized an adequate protection payment on Nov. 2.

The debtor said that since then, negotiations over the debtor’s treatment of the secured lender under the plan have progressed significantly, and while the parties have not completed their negotiations, the company believes that the parties are close to finalizing an agreement for the consensual treatment of the secured lender claim under the plan.

In connection with these negotiations, the secured lender requested that the debtor seek approval to make an additional adequate protection payment as soon as possible in an amount up to $4 million to be applied to unpaid interest that accrued on the secured lender claim during the case.

As such, the company requested that the court approve the payment, provided that the lender submits a ballot accepting its Chapter 11 plan and the parties reach an agreement on amended and restated loan documents.

The New York-based hotel property owner filed Chapter 11 bankruptcy on Jan. 24, 2023 under case number 23-10094.

© 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.