CHC interim cash collateral use OK’d; final hearing set for June 6

By Caroline Salls

Pittsburgh, May 9 – CHC Group Ltd. obtained interim court approval to use the cash collateral of its pre-bankruptcy secured parties to fund its operations while in bankruptcy, according to an order filed Saturday with the U.S. Bankruptcy Court for the Northern District of Texas.

The final hearing is scheduled for June 6.

As previously reported, CHC’s cash collateral use motion drew opposition from HSBC Bank plc.

HSBC said in its objection that CHC Cayman Investments I Ltd. moved $142.7 million of cash – the remainder of three $77.7 million credit facility draws – from a lender group-controlled account to a Bank of America, London Branch account.

“The debtors assert that Bank of America account is a non-control account and, therefore, the CHC Cayman cash is unencumbered,” said the objection.

“In addition, certain non-debtors entities that are not obligors under the revolving credit facility, senior secured notes or the ABL facility are alleged to hold approximately $90.1 million of cash in various jurisdictions, and, thus, the debtors assert that the non-debtor cash is also unencumbered.”

HSBC and the secured lenders dispute this and “assert a security interest in or other claim to the disputed unencumbered cash to the extent such funds constitute cash drawn from the revolving credit facility.”

Saturday’s order said all objections to the cash collateral use were overruled or resolved.

Based in Richmond, B.C., CHC is a commercial helicopter operator. It filed for Chapter 11 on May 5 under case number 16-31854.

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