just to make things clearer, i believe the way it works is if the company's plan passes the monitor's smell test (not thaaat hard), and the monitor tells the judge they think the ongoing operation is a "viable core business", and creditors have no complaints, then the court puts the stamp of approval.
Dunno, but if as meme's suggestion that the Canadian courts love to keep money losing operations open is correct, maybe KremeKo is giving them some cover by juicing the cash flow a bit.
It's funny that the monitor says in every report that the projections for the next period look reasonable and then KremeKo misses them.
Has anyone figured out the distinctions between the first and second tranche of the second lien? Does one get paid before the other? (Or is this not covered in the loan agreement, and possibly covered in a side agreement to which KKD is not a party, and which we've not seen?) Do we know which of the lenders is in which tranche?
There was quite a bit of shuffling among the second lien lenders between the original contract filing and the recent amendment. Either this was planned, or it reflects that something (most likely KKD's business) is not going as planned. Understanding the two tranches might help figure that out.
well KKDC didn't pay those creditors in full, so maybe if the stores are shuttered there's a period of time during which BNS and GE are allowed to go back and ask for more $.
i also read in a few places that Canadian courts looove ongoing concerns
nevertheless my comments regarding WFF "putting up with things" still stand. I spoke with them on the phone a few months back and I think it was pretty clear:
They're don't care about EBITDA at all actually, only hard assets. BUT if the hard assets are there, the real estate won't depreciate by much, so they arn't scared of lending the entire $75mm, they love the fees, the love the interest, and they love the collatreal. They love lending. This is a sure bet for them and it's overcollateralized for sure, especially a place like KKD that has propietary fixtures & all.
Silver Point, is the one who does not want Cooper to borrow $75mm freely, because if the CEBITDA sucks they get neither going concern value nor liquidation value. They insisted on the Borrowing Base for the 1st lien.
Even if they're not viable, would the Canadian court order them to be shuttered? If I'm the court and kkd wants to continue to run a money losing business, I'd let them as long as didn't damage other creditors.
Since kkd appears to be the only substantial creditor remaining and those creditors would be shut out anyway if kremeko were to shut down, wouldn't the court bend over backwards to keep them open?