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Case 16-42529 Doc 23 Filed 04/13/16 Entered 04/13/16 11:20:44 Main Document <br />Pg 14 of 32 <br />immediate and irreparable harm and is justified under section 105(a) of the Bankruptcy Code and <br />the doctrine of necessity. <br />The Surety Bond Program May Be an Authorized Secured Extension of Credit <br />28. Section 364(c) of the Bankruptcy Code permits a debtor unable to obtain <br />unsecured credit in the ordinary course of business under section 364(a) of the Bankruptcy Code <br />to obtain credit (a) with priority over any or all administrative expenses specified in sections <br />503(b) or 507(b) of the Bankruptcy Code, (b) secured by a lien on property of the estate that is <br />not otherwise subject to a lien or (c) secured by a junior lien on property of the estate that is <br />subject to a lien. To obtain secured credit on a postpetition basis, a debtor must demonstrate "by <br />a good faith effort that credit was not available" to the debtor on an unsecured or administrative <br />expense basis. Bray v. Shenandoah Fed. Say. & Loan Ass'n (In re Snowshoe Co.), <br />789 F.2d 1085, 1088 (4th Cir. 1986) (affirming lower court's approval of a loan made to the <br />debtor under section 364(d) of the Bankruptcy Code). See also In re Ames Dept. Stores, Inc., <br />115 B.R. 34, 37 (Bankr. S.D.N.Y. 1990) (debtor must demonstrate inability to obtain unsecured <br />credit to acquire approval of loan under section 364(c)). In making this showing, the Bankruptcy <br />Code "imposes no duty to seek credit from every possible lender before concluding that such <br />credit is unavailable." In re Snowshoe Co., 789 F.2d at 1088. See also In re Ames Dept. Stores, <br />115 B.R. at 40 (to obtain relief under section 364(c), "a debtor is not required to seek credit from <br />every possible source"). Courts grant a debtor considerable deference in exercising its sound <br />business judgment to obtain such credit, provided that the agreement is consistent with the <br />provisions of, and policies underlying the Bankruptcy Code. See In re Farmland Indus., Inc., <br />294 B.R. at 879-81 (court may consider debtor's business judgment, among other things, in <br />determining whether to approve postpetition financing under section 364). <br />-14- <br />