Daily News: December 17, 2012

GE Capital Objects to Use of Hilco Funds in Hostess Case


GE Capital, as agent for the a group of pre-petition ABL lenders, filed a motion with the U.S. Bankruptcy Court Southern District of New York, objecting to Hostess Brands’ authorization plan to retain and employ Hilco Industrial, Hilco IP Services and Hilco Real Estate as consulting and marketing agents and obtain related post-petition financing.

According to the bankruptcy court documents, GE said, as a result of its discovery and deposition process, it believes that Hostess is not entitled to the funds that would be advanced under the Hilco financing agreement and is requesting that the court deny such a finding and require the debtors apply the proceeds from the Hilco agreement to pay down the ABL pre-petition indebtedness.

GE Capital said it believes the debtors are not entitled to a finding that the funds advanced under the Hilco agreement would not constitute “net proceeds received by the debtors with respect to any term loan priority collateral” as such phrase is used in the wind-down order.

Previously on abfjournal.com:

Report: Over Two Dozen Bidders to Vie for Hostess, Friday, December 14, 2012

WSJ: Hostess Maneuver Deprived Pension, Tuesday, December 11, 2012