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First Mariner Bancorp Financing Approved

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The U.S. Bankruptcy Court approved First Mariner Bancorp’s motion for an order, pursuant to Sections 105, 362 and 364 of the Bankruptcy Code, (a) authorizing and approving debtor-in- possession financing and granting security interests and a super-priority administrative claim in connection therewith, (b) approving the terms and conditions of that super-priority debtor-in-possession credit agreement and related documents and (c) modifying the automatic stay to the extent necessary to enter into the D.I.P. financing and effectuate the terms thereof. As previously reported, “Contemporaneously with the filing of this Motion, the Debtor has filed a motion (the ‘Sale Motion’) seeking authority to effectuate a transfer and sale of its primary asset, 100% of the equity of First Mariner Bank (the ‘Bank’), together with certain related assets (collectively, the ‘Purchased Assets’). Because the Debtor does not have any independent operations, it lacks sufficient funds to consummate the proposed transaction as set forth in the Sale Motion (the ‘M&A Transaction’), including the funds to pay the costs of administering its Chapter 11 Case and obligations required to be satisfied in connection with the M&A Transaction. By the instant Motion, the Debtor seeks authority to enter into a secured, superpriority, non-priming postpetition delayed-draw term loan facility (the ‘DIP Facility’) provided by RKJS (who is also the ‘stalking horse’ bidder under the M&A Transaction), in an amount of up to $2,500,000, to function as a ‘bridge’ to the closing of the M&A Transaction. The Debtor also seeks certain other and related relief, including contingent approval of replacement debtor-in-possession financing, on substantially the same terms set forth in the DIP Credit Agreement, from a competing bidder in the event that such competing bidder, rather than the ‘stalking horse’ bidder, prevails at the auction for the Purchased Assets. Importantly, if RKJS is the successful bidder for the Purchased Assets, and subject to the closing of the M&A Transaction, the Debtor will not be obligated to pay any interest on the DIP Facility – i.e., RKJS will have provided interest-free postpetition financing. In light of the favorable terms of the DIP Facility and the necessity for the financing, the Debtor respectfully requests that the Motion be approved.”

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