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Case 16-42529 Doc 53 Filed 04/13/16 Entered 04/13/16 12:50:57 Main Document <br />Pg5of31 <br />annually and are paid by the Debtors through their Brokers (as defined below) or through <br />financing agreements (the "Financing Agreements") that the Debtors have executed with AFCO <br />Premium Credit LLC ("AFCO") and BankDirect Capital Finance ("BankDirect" and, with AFCO, <br />the "Financiers"). The Financing Agreements grant the Financiers a security interest in, among <br />other things, amounts that may become payable to the Debtors in connection with the financed <br />Insurance Policies, such as unearned premiums or dividends.5 Pursuant to the terms of the <br />Financing Agreements, the Debtors are paying AFCO and BankDirect a combined approximate <br />total of $12.4 million (the "Premium Financing Pam") throughout the year.6 The Debtors <br />have already made certain of these Premium Financing Payments. As of the Petition Date, the <br />Debtors estimate that they owe approximately $4.2 million in Premium Financing Payments over <br />the remaining term of the Financing Agreements. <br />10. Certain of the Insurance Policies for which the Debtors pay premiums <br />cover certain of the Debtors' non -Debtor affiliates. In certain circumstances, the non -Debtor <br />affiliates will reimburse the Debtor for an allocated portion of the premium. <br />11. Although the majority of the Debtors' Insurance Policies will not expire in <br />the days and weeks immediately following the Petition Date, the Debtors anticipate that they <br />likely will have to begin renewing or replacing expiring Insurance Policies as early as <br />The Financing Agreements also contain a limited power of attorney granted to the Financiers by the <br />Debtors, which, upon a default by the Debtors, may allow the Financiers to cancel the financed Insurance <br />Policies. From and after the Petition Date, the Financiers' ability to utilize this remedy is limited by and <br />subject to the terms of the automatic stay imposed by section 362 of the Bankruptcy Code. <br />The Debtors pay AFCO in installments over a nine-month period. The Debtors pay BankDirect in <br />installments over a ten-month period. <br />-5- <br />