Nuverra Environmental Solutions’ official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors’ financing motion.
The objection asserts, “The two DIP Facilities provide little or no operating funds beyond use of cash collateral, yet extract overbearing terms to advance the false characterization that these Bankruptcy Cases are ;prepacks.; These Bankruptcy Cases are not prepacks, rather they are traditional chapter 11 bankruptcy cases in which certain creditors are party to a restructuring support agreement with the Debtors, while other creditors not party to the restructuring support agreement are slated to receive almost nothing or nothing under the Plans. The DIP Lenders’ many requests in connection with the provision of these DIP Facilities are simply unwarranted given the proposed fast-track nature of these cases.”
In addition, “If approved, the DIP Facilities would be secured by previously unencumbered assets, including avoidance actions, commercial tort claims and any other unencumbered assets that may exist. This sweep of unencumbered assets even includes the lenders own collateral if the pre-petition lenders’ liens are successfully avoided….The DIP Revolving Facility Lenders are also requesting approval of a $5 million restructuring fee (the ‘Restructuring Fee’). Notwithstanding the excessive nature of such a feefor what is plainly the continued consensual use of cash collateral (which consensual use benefits nobody more than the lenders themselves), such amount is excessive. On top of this fee, the DIP Lenders also seek 506(c), 552(b) and marshalling waivers.”
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