Wed 04/26/2023 20:55 PM
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Relevant Document:
Interim Cash Collateral Order

Counsel for the Beverly Hospital debtors, proposed DIP lender HRE Montebello LLC and bond trustee U.S. Bank Trust Co. advised Judge Sandra Klein at today’s continued DIP financing hearing that the parties believe U.S. Bank and HRE Montebello are close to resolving their open interim DIP financing issues and hope to submit a mutually agreeable order by next week.

In order to fund the hospital’s operations, including payroll, while discussions continue, the debtors’ use of cash collateral, which has been approved through Friday, April 28, at 8 p.m. ET, will be extended by at least one additional week through an additional order to be submitted by the debtors.

Justin Bernbrock of Sheppard Mullin, proposed counsel for the debtors, further advised the court that the debtors hope to submit a bidding procedures and sale motion with a proposed stalking horse bidder by next week and seek an expedited hearing.

According to Kevin Walsh of Greenberg Traurig, counsel for US Bank, and Eric Prezant of Bryan Cave Leighton Paisner, counsel to HRE Montebello, the parties’ unresolved DIP financing issues include uncertainty regarding the border between property believed to be part of US Bank’s collateral package and other property the debtors propose to pledge as collateral to HRE Montebello, the determination of which could affect whether a building that would be part of HRE Montebello’s collateral package would have access to a sufficient number of parking spots to continue to be used as a medical office.

Other open issues include the negotiation of a potential “springing lien” structure that would restore the bond trustee to its original position with respect to remaining proceeds in the event that HRE Montebello is granted a lien on and paid from proceeds of accounts and general intangibles that US Bank claims as collateral, as well as a potential second lien mortgage in US Bank’s favor on certain collateral to be pledged to HRE Montebello.
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