Macquarie Bank filed with the U.S. Bankruptcy Court an objection to Horsehead Holding’s motion for interim and final orders to obtain post-petition secured financing, authorizing the post-petition use of cash collateral, granting adequate protection to the pre-petition secured parties, scheduling a final hearing and granting related relief.
Macquarie Bank asserts, “In particular, the Debtors propose to provide Macquarie ‘adequate protection’ in the form of replacement liens in the Debtors’ assets and an allowed superpriority administrative claim (subject to a carve-out in the DIP Facility) that actually diminishes Macquarie’s security. Indeed, the protection offered to Macquarie is illusory because the terms of the Proposed DIP Facility permit Debtors to utilize the net proceeds from the sale or disposition of Collateral to pay obligations under the DIP Facility prior to the payment of obligations senior to the DIP Facility—such as Macquarie’s secured interests.”
The objection continues, “Moreover, Debtors’ offer of adequate protection fails to provide for the payment of the interest, fees and expenses to which Macquarie is entitled under the Bankruptcy Code and the Macquarie Credit Agreement. Inexplicably, not only does the adequate protection offered fail to protect Macquarie’s interests, but the adequate protection proposed to Macquarie is not even on par with what is being provided to lenders junior to Macquarie.”
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