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GENERAL44158
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Last modified
8/24/2016 8:12:59 PM
Creation date
11/23/2007 12:52:30 PM
Metadata
Fields
Template:
DRMS Permit Index
Permit No
M1977376
IBM Index Class Name
General Documents
Doc Name
MEMORANDUM IN SUPPORT OF MOTION OF DEBTORS FOR ORDER AUTHORIZING FINANCING GRANTING SENIOR LIENS &
Media Type
D
Archive
No
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<br />Debtors to remain in business. The Debtors currently have no <br />lender secured by accounts receivable, inventory, general <br />intangibles, or other personal property, so there is no need to <br />request that the Court, pursuant to section 364(d) of the <br />Bankruptcy Code, "prime11 a senior lien to facilitate the <br />financing contemplated by the Motion, and no adequate protection <br />need be given. <br />Standards for Incurring Debt on a Suoeroriority and Secured <br />Basis. The Debtors seek to incur secured and superpriority <br />postpetition financing under section 364(c)(2) of the Bankruptcy <br />Code and Bankruptcy Rule 4001. Section 364(c) provides ire part: <br />If the trustee is unable to obtain unsecured <br />credit allowable under section 503(b)(1) of this title <br />as an administrative expense, the court, after notice: <br />and a hearing, may authorize the obtaining or the <br />incurring of a debt-- <br />(1) with priority over all <br />administrative expenses of a kind specified <br />in section 503 (b) or 507(b) of this title; <br />[or] <br />(2) secured by a lien on property of the <br />estate that is not otherwise subject to a <br />lien; . <br />Under section 364, a debtor must demonstrate that it is unable to <br />obtain unsecured financing, whether in the ordinary course of <br />business or not, before a court may consider the incurring of <br />superpriority or secured debt under section 364(c). In re <br />American Resources Management Coro., 51 Bankr. 713, 721 (Bankr. <br />D. Utah 1985); In re Ames Dent. Stores, 115 Bankr, at 39; In re <br />Skv Vallev, Inc., 100 Bankr. 107, 113 (Bankr. N.D. Ga. 1938). <br />The Debtors have made substantial efforts but been unable to <br />obtain unsecured debt. The Debtors have met their burden of <br /> <br />4 <br />
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