Allied Systems Holdings Wins Interim Court Approval of DIP Loan
Friday, June 15, 2012
Allied Systems Holdings, Inc., an automotive transportation company, announced that it has obtained interim court approval of several key requests that will enable the company to continue operating business as usual as it completes its financial restructuring.
At a hearing on June 12, U.S. Judge Christopher Sontchi approved all of the company's requests, including an interim authorization for the company to obtain up to $10 million in debtor-in-possession (DIP) financing from Yucaipa American Alliance Fund II as DIP agent and Yucaipa American Alliance Fund II and Yucaipa American Alliance (Parallel) Fund II as lenders.
This financing, together with cash generated from operations, will be used to support Allied during the restructuring process. Allied intends to return to court in July to seek authorization on a final basis for the full $20 million in financing offered by the company's lenders. Allied also received court authority to pay certain key providers in the normal course for services provided on or prior to the commencement of the Chapter 11 process on June 10, 2012 to ensure uninterrupted delivery on all routes.
"The relief granted today will enable Allied to continue operations as normal throughout the restructuring and allow us to continue providing best in class service to all of our customers," said Mark J. Gendregske, the company's president and CEO.
All of the approvals were granted on an interim basis, as is typical in Chapter 11 restructurings. The hearing to consider final approval of the requests is scheduled for July 12. As previously announced, Allied and 18 subsidiaries, including Allied Automotive Group, Inc., Axis Group, Inc., and Allied's Canadian units, on June 10, 2012 implemented a financial restructuring through Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. The court process does not include captive insurance company Haul Insurance Limited or any of the company's Mexican or Bermudan subsidiaries. The company also received foreign recognition of its Chapter 11 cases in Canada.