BioNitrogen Holdings filed with the U.S. Bankruptcy Court a motion to (i) authorize the Debtors to obtain post-petition financing, nunc pro tunc to the date of borrowing, and (ii) granting the lender super-priority administrative expense.
The motion explains, “By this Motion, the Debtors request entry of an order (i) authorizing the Debtors to borrow $43,981.00 from the Lender for the purpose of funding Debtors’ counsel administrative legal fees and expenses retainer; (ii) authorizing the Debtors to borrow $1,600 to pay patent certificates in the Peoples Republic of China; and (ii) granting the Lender a super priority administrative expense for the full amount of the Advances, including the Prepetition Advance, nunc pro tunc to the dates of borrowing. Section 364(c)(1) provides that, if a debtor in possession is unable to obtain credit on an unsecured basis or as an administrative expense, the court, after notice and a hearing, may authorize the obtaining of credit or incurring of debt ‘with priority over any or all administrative expenses of the kind specified in section 503(b) or 507(b) of this title.'”
The motion continues, “Given the Debtors’ lack of operations and cash flow as of the Petition Date as well as the emergency nature of the filing of these cases, the Debtors were not able to obtain financing from any other source on an emergency basis in order to fund the preparation of the chapter 11 cases as well as commitment to fund ongoing legal fees and expenses of the chapter 11 cases. The Lender, however, which is controlled by a member of BION’s board of directors, has agreed to fund the Postpetition Advances on the condition that it be granted an administrative expense with priority over all other administrative expenses (except chapter 11 professionals and US Trustee fees) for all amounts advanced. Additionally, the Lender is not charging interest on the Advances or otherwise subjecting the Debtor to any onerous terms that are typically required from traditional debtor-in-possession lenders.”
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