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Keywords

contractsettlementhearingmotionbankruptcygood faith
settlementmotionbankruptcy

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In re Project Orange Associates, LLC, Not Reported in B.R. Rptr., 2011 WL 13502514

Facts

Project Orange Associates, LLC, the debtor, filed an amended motion seeking authorization to obtain financing to meet its obligations under a Settlement Agreement. The debtor required the funds to post letters of credit and to pay contractors for the demolition of its cogeneration facility in Syracuse, New York. The court held hearings on the motion, considering the necessity of the financing for the debtor's estate and the implications for its creditors.

Project Orange Associates, LLC, the debtor, filed an amended motion seeking authorization to obtain financing to meet its obligations under a Settlement Agreement.

Issue

Whether the debtor should be authorized to obtain the Third DIP Loan and use the proceeds in accordance with the proposed budget and Settlement Agreement.

Whether the debtor should be authorized to obtain the Third DIP Loan and use the proceeds in accordance with the proposed budget and Settlement Agreement.

Rule

The court applied sections 105, 363(b), and 364(c) of the Bankruptcy Code, along with relevant Bankruptcy Rules, to determine the appropriateness of the financing and the use of funds.

The court applied sections 105, 363(b), and 364(c) of the Bankruptcy Code, along with relevant Bankruptcy Rules, to determine the appropriateness of the financing and the use of funds.

Analysis

The court found that the debtor demonstrated good cause for the financing, emphasizing the urgency of meeting payment and demolition timelines set forth in the Settlement Agreement. The court noted that failure to meet these timelines would reduce the value of the debtor's estate, thereby impacting creditors. The court also recognized that the financing was negotiated in good faith and was necessary for the debtor's operations.

The court found that the debtor demonstrated good cause for the financing, emphasizing the urgency of meeting payment and demolition timelines set forth in the Settlement Agreement.

Conclusion

The court granted the debtor's motion, authorizing the borrowing of up to $4,100,000 and the use of funds as outlined in the budget. The order was effective immediately upon entry.

The court granted the debtor's motion, authorizing the borrowing of up to $4,100,000 and the use of funds as outlined in the budget.

Who won?

Project Orange Associates, LLC prevailed in the case as the court granted its motion for financing, recognizing the necessity of the funds for the debtor's obligations.

Project Orange Associates, LLC prevailed in the case as the court granted its motion for financing, recognizing the necessity of the funds for the debtor's obligations.

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