Angelo, Gordon Energy Servicer filed with the U.S. Bankruptcy Court an objection to Rooster Energy’s emergency post-petition financing motion.
The objection asserts, “Since the Petition Date, the Administrative Agent and the Holders have, at the request of the Debtors, allowed the Rooster Debtors to use Cash Collateral in an amount of at least $1,493,535.40….The Administrative Agent and the Holders object to the proposed DIP Financing because it must provide for payment of the Allowed Superpriority Adequate Protection Claims in full before any other payments are made, or at the very least the Rooster Debtors must hold the full amount of such Allowed Superpriority Adequate Protection Claims in escrow until they are paid in full.”
In addition, “Further, obtaining the proposed DIP Financing is not a reasonable exercise of the Rooster Debtors’ business judgment because they have no way of ever paying such money back. Rather, the proposed DIP Financing is nothing more than an inside play by Morrison, desperate to keep the Rooster Debtors out of chapter 7 and tied to Cochon Properties and Morrison Wells Services (MWS) – the only Debtor entities with any value – for his own benefit. The Court should therefore deny the relief requested in the Motion….Furthermore, the Rooster Debtors lack a valid business reason for incurring this disgorgement risk. Corn Meal’s proposed DIP Financing, if approved, would do nothing to improve the Rooster Debtors’ business prospects or likelihood of rehabilitation.”
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