$40.5 Million Debtor-In-Possession (DIP) Loan
The client is the owner of a the Coral Reef Hotel & Resort, a leading hotelier based in Waikiki Beach, Hawaii.
The hotel was underperforming due to its physical condition and poor management, resulting in bankruptcy. The Company was facing liquidation, despite the desirable location and potential for profitability. They had been unable to find a lender willing to take the loan risk, only a handful of firms are willing to provide DIP financing.
Business Capital has access to and relationships with the firms that are willing and able to provide DIP financing and was able to successfully present the merits of the company’s situation and reorganization plan. Working with their lending partners, Business Capital structured a $40.5 million first mortgage DIP loan providing immediate cash, ongoing working capital and sufficient time for the company to become stronger through a bank approved reorganization and restructuring plan. Business Capital also secured a subordinated co-investment by an experienced hotel investment and management company, and thereby restore vendor and customer confidence and avoided liquidation.