July 18, 2014
Partner Eric R. Wilson and special counsel Kristin S. Elliott were mentioned in a Law360 article entitled “Creditors Say Kid Brands Doesn't Need $49M DIP Loan.” The Kelley Drye team is serving as counsel to the Official Committee of Unsecured Creditors in In re: Kid Brands Inc.
Reporting on proceedings in the United States Bankruptcy Court for the District of New Jersey, the July 18 article states that “creditors unhappy with Kid Brands Inc.’s proposal to tap $49 million in debtor-in-possession financing said that the loan is unnecessary for the child product maker’s continued operations and will hand lender Salus Capital Partners LLC undeserved collateral rights over dwindling company assets.”
According to the article, “the unsecured creditors committee lodged an objection on Wednesday to a final DIP financing motion, arguing that Kid Brands has sufficient positive cash flow to sustain the chapter 11 sale process and that Salus has manufactured a fictitious ‘need’ for new financing in order to grab liens on previously unencumbered assets.”
As a result, Law360 reports that “U.S. Bankruptcy Judge Donald Steckroth approved the proposed DIP package on an interim basis on June 20. A hearing on final approval of the DIP loan that was to take place July 14 has been rescheduled for July 22 in light of objections from the U.S. Trustee’s office and, now, the unsecured creditors.”
To read full article, click here (may need subscription).