UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF IOWA CEDAR RAPIDS DIVISION
EMERGENCY MOTION OF DEBTOR FOR ENTRY OF INTERIM AND FINAL ORDERS (I) AUTHORIZING THE DEBTOR TO OBTAIN SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), 364(d), AND 507, (II) GRANTING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE CLAIMS, (III) AUTHORIZING THE USE OF CASH COLLATERAL, (IV) GRANTING ADEQUATE PROTECTION TO PRE-PETITION SECURED LENDERS, AND (V) SCHEDULING A FINAL HEARING
Greenfield Agricultural Partners LLC, the above-captioned debtor and debtor-in-possession (the "Debtor" or "GAP"), by and through its undersigned counsel, Calderwood & Harkness LLP, hereby files this Emergency Motion (the "Motion") pursuant to Sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), 364(d), and 507 of Title 11 of the United States Code (the "Bankruptcy Code"), Rules 2002, 4001(b), 4001(c), and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and the Local Rules of the United States Bankruptcy Court for the Northern District of Iowa, and respectfully represents as follows:
PRELIMINARY STATEMENT
Greenfield Agricultural Partners LLC ("Greenfield," the "Debtor," or "GAP") filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on May 15, 2025 (the "Petition Date"), commencing the above-captioned case. The Debtor is a vertically integrated agricultural chemicals manufacturer and distributor headquartered at 1400 Prairie Ridge Drive, Cedar Falls, Iowa 50613. The Debtor's operations span three manufacturing plants located in Cedar Falls, Iowa; Decatur, Illinois; and Jonesboro, Arkansas, along with fourteen regional distribution centers strategically positioned across the Midwest and Mid-South regions, and a 640-acre research and development farm in Ames, Iowa. Prior to the Petition Date, the Debtor employed approximately 2,300 individuals across these facilities, including chemists, agronomists, manufacturing technicians, logistics personnel, sales representatives, and administrative staff.
The Debtor manufactures and distributes a comprehensive portfolio of specialty agricultural chemicals, including herbicides, fungicides, adjuvants, and seed treatments. The Debtor's flagship product is ClearGuard XR, a proprietary post-emergent herbicide that has historically been one of the most widely used specialty herbicide formulations in the Midwest corn and soybean belt. The Debtor's products are sold directly to farming operations, agricultural cooperatives, and independent crop input retailers throughout a twelve-state region.
The Debtor's financial distress was precipitated by a confluence of adverse market conditions and regulatory developments. Severe drought conditions during the 2024 growing season significantly depressed demand for the Debtor's products as farmers curtailed input purchases in response to anticipated lower yields. Depressed commodity pricing for corn and soybeans further reduced farmer spending on crop protection chemicals, compressing the Debtor's margins. Most significantly, the delayed re-registration of ClearGuard XR by the United States Environmental Protection Agency ("EPA") undermined the Debtor's core revenue stream, as distributors and end-users deferred purchases pending regulatory clarity. These factors combined to produce fiscal year 2024 revenue of $612.4 million and EBITDA of only $38.7 million — substantially below the Debtor's internal projections and the performance levels contemplated by its credit agreements.
As of the Petition Date, the Debtor's total pre-petition funded debt stands at approximately $489.2 million, consisting of a $310 million first lien term loan, $72.3 million drawn on a $95 million asset-based lending revolving credit facility, $84.2 million in senior unsecured notes, and approximately $22.7 million in trade and other unsecured claims. The Debtor's cash on hand at the Petition Date was only $11.8 million — a sum grossly insufficient to fund ongoing operations, particularly during the critical spring and summer agricultural season when the Debtor's products are in peak demand and when the failure to deliver product would result in the permanent loss of customer relationships.
Accordingly, the Debtor urgently seeks authority to enter into a $175,000,000 senior secured superpriority debtor-in-possession revolving credit facility (the "DIP Facility") with Ironclad Capital Partners LP, as administrative agent and lead arranger (the "DIP Agent"), and Ironclad Capital Partners LP, Ridgeline Opportunity Fund III LP, and Bramblewood Credit Advisors LLC, as lenders (collectively, the "DIP Lenders"), with Meridian Trust Company serving as collateral agent (the "Collateral Agent"). The DIP Facility is the product of extensive arm's-length negotiations and a competitive marketing process, as detailed herein and in the Declaration of Nolan Ashworth of Claridge Advisory Group LLC filed concurrently herewith. The DIP Facility is essential to stabilize the Debtor's operations, pay its employees, maintain critical vendor relationships, fund the restructuring process, and pursue a path toward a plan of reorganization or a sale of substantially all assets under Section 363 of the Bankruptcy Code.
The Debtor requests that this Court enter an Interim Order (the "Interim Order"), substantially in the form attached hereto as Exhibit 1, authorizing an initial draw of $80,000,000 within five (5) business days of the Petition Date (i.e., by May 22, 2025), and that the Court schedule a final hearing (the "Final Hearing") for entry of a Final Order (the "Final Order"), substantially in the form attached hereto as Exhibit 2, authorizing access to the full $175,000,000 within thirty-five (35) days of the Petition Date (i.e., on or before June 19, 2025). Time is of the essence, and this Motion should be considered on an emergency basis.
I. JURISDICTION AND VENUE
1. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) (matters concerning the administration of the estate), (D) (orders to turn over property of the estate), (M) (orders approving the use or lease of property, including use of cash collateral), and (O) (other proceedings affecting the liquidation of the assets of the estate or the adjustment of the debtor-creditor or the equity security holder relationship). The Court may enter a final order on this Motion consistent with Article III of the United States Constitution.
2. Venue is proper in this District under 28 U.S.C. §§ 1408 and 1409. The Debtor's principal place of business and corporate headquarters are located at 1400 Prairie Ridge Drive, Cedar Falls, Iowa, which is within the Northern District of Iowa. The Debtor has maintained its principal place of business at this location for the greater part of the 180-day period preceding the Petition Date, and the Debtor's primary manufacturing operations, executive offices, and corporate records are situated within this District.
3. The statutory predicates for the relief requested herein are Sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), 364(d), and 507 of the Bankruptcy Code, together with Bankruptcy Rules 2002, 4001(b), 4001(c), and 9014.
II. BACKGROUND
A. The Debtor's Business and Operations
4. Greenfield Agricultural Partners LLC is an Iowa limited liability company duly formed and existing under the laws of the State of Iowa. The Debtor's registered agent is Capitol Registered Agents Inc., located at 400 E. Court Avenue, Suite 200, Des Moines, Iowa 50309. The Debtor was originally formed in 2003 and has operated continuously in the agricultural chemicals industry for over two decades.
5. The Debtor manufactures and distributes specialty agricultural chemicals, including herbicides, fungicides, adjuvants, and seed treatments, serving the agricultural sector across a twelve-state region encompassing the Midwest and Mid-South. The Debtor's products are formulated, manufactured, and packaged at its three manufacturing facilities and distributed through its network of fourteen regional distribution centers. The Debtor's customer base includes large-scale farming operations, agricultural cooperatives, independent crop input retailers, and contract applicators.
6. The Debtor operates the following manufacturing facilities:
(a) Cedar Falls, Iowa (1400 Prairie Ridge Drive, Cedar Falls, Iowa 50613) — This facility serves as the Debtor's corporate headquarters and primary manufacturing plant. The Cedar Falls facility encompasses approximately 320,000 square feet of manufacturing, formulation, and warehouse space on a 45-acre campus. The facility operates three herbicide formulation lines, two fungicide blending lines, and an adjuvant processing unit, and employs approximately 850 individuals.
(b) Decatur, Illinois (2200 Industrial Boulevard, Decatur, Illinois 62521) — The Decatur facility is the Debtor's secondary manufacturing plant, encompassing approximately 185,000 square feet of manufacturing and warehouse space. This facility focuses primarily on the production of seed treatment products and specialty adjuvants, and employs approximately 420 individuals.
(c) Jonesboro, Arkansas (815 County Road 740, Jonesboro, Arkansas 72401) — The Jonesboro facility is the Debtor's Mid-South manufacturing and distribution hub, encompassing approximately 140,000 square feet. This facility produces herbicide and fungicide formulations tailored to the cotton, rice, and soybean markets of the Mid-South region, and employs approximately 310 individuals.
7. In addition to its manufacturing facilities, the Debtor operates fourteen regional distribution centers across the Midwest and Mid-South, strategically positioned to ensure timely delivery of products to customers during the critical application windows of the growing season. The Debtor also operates a 640-acre research and development farm located at 4500 University Boulevard, Ames, Iowa 50010, where the Debtor conducts field trials, efficacy testing, and product development research in collaboration with Iowa State University's College of Agriculture and Life Sciences.
8. As of the Petition Date, the Debtor employed approximately 2,300 individuals across all locations, including approximately 720 employees classified as direct manufacturing and formulation personnel, approximately 480 employees in logistics and distribution, approximately 340 employees in sales and marketing, approximately 180 employees in research and development, and the balance in administrative, finance, regulatory, and management functions.
9. The Debtor's business is inherently seasonal in nature, with peak sales concentrated in the second and third fiscal quarters (April through September), corresponding to the spring planting and application season and the full summer growing season. The timing of this Chapter 11 case is particularly significant because the Debtor filed its petition during the heart of the spring application season. Any interruption in the Debtor's ability to manufacture and deliver products during this critical window would result in the permanent loss of seasonal revenue, the erosion of customer relationships, and irreparable harm to the Debtor's enterprise value.
10. The Debtor's flagship herbicide product is ClearGuard XR, a proprietary post-emergent herbicide formulation designed for use in corn and soybean production. ClearGuard XR has historically accounted for approximately 28% of the Debtor's total annual revenue. As discussed further below, the EPA's delay in completing the re-registration review of ClearGuard XR has created significant uncertainty among distributors and end-users, adversely affecting orders and revenue.
B. The Chapter 11 Case
11. On May 15, 2025, the Debtor filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, commencing the above-captioned case. This is a single-entity filing; Greenfield Agricultural Partners LLC is the sole debtor in this case. The Debtor has no subsidiary entities that are debtors in this proceeding at this time.
12. The Debtor continues to operate its business and manage its properties as debtor-in-possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner, or official committee of unsecured creditors has been appointed in this case as of the date of this Motion, although the Debtor anticipates that the United States Trustee will seek to form an official committee of unsecured creditors in the ordinary course.
13. The Debtor's management team consists of the following individuals, each of whom continues to serve in his or her respective capacity:
(a) Derek Calloway — Chief Executive Officer and Manager. Mr. Calloway has served as CEO since 2018 and has over 25 years of experience in the agricultural chemicals industry.
(b) Patricia Langford — Chief Financial Officer. Ms. Langford has served as CFO since 2020 and oversees all financial reporting, treasury, and capital markets functions. Ms. Langford's Declaration in Support of this Motion is filed separately as Exhibit C.
(c) Russell Teague — Chief Operating Officer. Mr. Teague has served as COO since 2019 and oversees all manufacturing, supply chain, and distribution operations.
(d) Monica Huang — General Counsel and Secretary. Ms. Huang has served as General Counsel since 2021 and oversees all legal, regulatory, and compliance matters.
(e) James Delacroix — Vice President, Treasury and Capital Markets. Mr. Delacroix has served in this role since 2022 and has been instrumental in the Debtor's capital structure management and DIP financing negotiations.
C. Events Leading to the Chapter 11 Filing
14. The Debtor's Chapter 11 filing was the product of a series of compounding operational, financial, and regulatory pressures that collectively rendered the Debtor's pre-petition capital structure unsustainable.
15. Operational Pressures. The 2024 growing season was marked by severe drought conditions across the Debtor's primary service territory, particularly in Iowa, Illinois, Indiana, and Missouri. The drought significantly depressed demand for crop protection chemicals, as farmers reduced input spending in anticipation of lower yields and reduced profitability. At the same time, commodity prices for corn and soybeans declined materially during 2024, further reducing farmer purchasing power and willingness to invest in specialty chemical products. Most critically, the EPA's ongoing re-registration review of ClearGuard XR — the Debtor's flagship product — introduced significant uncertainty into the marketplace. Although the Debtor believes ClearGuard XR will ultimately receive re-registration approval, the protracted review process (which began in mid-2023 and remains pending) has caused distributors and end-users to defer purchases and, in some cases, to switch to competing products.
16. FY 2024 Financial Performance. For the fiscal year ended December 31, 2024, the Debtor reported revenue of $612.4 million and EBITDA of $38.7 million. The Debtor's last-twelve-months ("LTM") Adjusted EBITDA, as calculated pursuant to the definitions set forth in the First Lien Term Loan credit agreement, was $37.7 million. These results were substantially below the Debtor's internal budget and the performance levels contemplated by the covenants in its credit agreements.
17. Leverage Covenant Breach. As of December 31, 2024, the Debtor's Total Net Leverage Ratio under the First Lien Term Loan credit agreement tested at approximately 9.82x, calculated as follows: total funded debt of $382.3 million ($310.0 million First Lien Term Loan plus $72.3 million ABL Revolver drawn balance), less cash on hand of $11.8 million, yielding net funded debt of $370.5 million, divided by LTM Adjusted EBITDA of $37.7 million. This ratio of 9.82x substantially exceeded the maximum Total Net Leverage Ratio covenant of 6.50x set forth in the First Lien Term Loan credit agreement, constituting an event of default thereunder.
18. Forbearance Agreement. On January 31, 2025, Prairie State Bank, National Association, in its capacity as administrative agent under the First Lien Term Loan credit agreement (the "First Lien Agent"), entered into a Forbearance Agreement with the Debtor. Pursuant to the Forbearance Agreement, the First Lien Agent and the requisite percentage of First Lien Lenders agreed to forbear from exercising remedies with respect to the leverage covenant default for a limited period. The Forbearance Agreement expired by its terms on May 1, 2025, without extension, despite the Debtor's requests for an additional forbearance period.
19. Missed Interest Payment on Senior Unsecured Notes. On March 15, 2025, the Debtor was required to make its semi-annual interest payment on the $84.2 million Senior Unsecured Notes (bearing interest at a fixed rate of 9.50% per annum, due March 2027, with Meridian Trust Company serving as Indenture Trustee). The total interest payment due was $3,999,500 (calculated as $84,200,000 × 9.50% ÷ 2). Due to acute liquidity constraints, the Debtor was able to make only a partial payment of $318,250, leaving $3,681,250 unpaid. The 30-day grace period provided under the Indenture expired on April 14, 2025, without the deficiency being cured, constituting an event of default under the Indenture.
20. Cedar Falls Plant Capital Expenditure. In the first quarter of 2025, the Debtor undertook a critical compressor overhaul at the Cedar Falls manufacturing plant at a total cost of $4.2 million. The compressor system is essential to the operation of the herbicide formulation lines at the Cedar Falls facility, and the overhaul was necessary to maintain continuous production capability. Due to cash flow constraints, $1.6 million of the total cost remains outstanding and payable to the contractor, Norris Industrial Services LLC of Waterloo, Iowa.
21. Critical Vendor Exposure. As of the Petition Date, the Debtor's top five chemical raw material suppliers were owed an aggregate of approximately $9.4 million in pre-petition trade payables. These suppliers provide essential active ingredients and formulation components without which the Debtor cannot manufacture its products. The Debtor's management team has been in active discussions with each of these suppliers to maintain supply continuity during the Chapter 11 case.
22. The combination of the leverage covenant default, the expiration of the Forbearance Agreement on May 1, 2025, the uncured default under the Senior Unsecured Notes Indenture, and the imminent threat of lender enforcement action, together with the Debtor's critical liquidity shortfall, precipitated the filing of this Chapter 11 case on the Petition Date.
D. Pre-Petition Capital Structure
23. As of the Petition Date, the Debtor's capital structure consisted of the following funded debt obligations:
24. First Lien Term Loan.
• Agent: Prairie State Bank, National Association, as administrative agent and collateral agent (500 Main Street, Suite 1200, Kansas City, Missouri 64105).
• Outstanding Principal: $310,000,000.
• Original Closing Date: November 2021.
• Maturity Date: November 2026.
• Interest Rate: Secured Overnight Financing Rate ("SOFR") plus 450 basis points (4.50%).
• Security: First-priority lien on substantially all assets of the Debtor, including real property, equipment, intellectual property, accounts receivable, inventory, general intangibles, and all proceeds thereof, subject to the split-collateral arrangement with the ABL Revolver on receivables and inventory.
25. ABL Revolver.
• Agent: Prairie State Bank, National Association, as administrative agent.
• Participating Banks: Hawthorn National Bank and Northland Savings Bank, F.S.B.
• Total Commitment: $95,000,000.
• Outstanding Drawn Amount: $72,300,000.
• Original Closing Date: March 2023.
• Maturity Date: May 2026.
• Interest Rate: SOFR plus 275 basis points (2.75%).
• Security: First-priority lien on accounts receivable and inventory of the Debtor, pursuant to a split-collateral intercreditor arrangement with the First Lien Term Loan. Under the Intercreditor Agreement dated March 2023, the ABL Agent holds first-priority liens on receivables and inventory (the "ABL Priority Collateral"), while the First Lien Agent holds first-priority liens on all other assets (the "Term Loan Priority Collateral").
26. Senior Unsecured Notes.
• Indenture Trustee: Meridian Trust Company (101 Park Avenue, 20th Floor, New York, New York 10178).
• Outstanding Principal: $84,200,000.
• Issuance Date: March 2024.
• Maturity Date: March 2027.
• Interest Rate: 9.50% fixed rate, payable semi-annually on March 15 and September 15.
• Security: Unsecured.
27. Trade and Other Unsecured Claims. As of the Petition Date, the Debtor estimates that it owes approximately $22,700,000 in trade payables and other unsecured obligations, including amounts owed to raw material suppliers, logistics providers, utilities, professional services firms, and other general unsecured creditors.
28. The Debtor's total funded debt as of the Petition Date is approximately $489,200,000, summarized as follows:
29. Cash on hand at the Petition Date was $11,800,000. The Debtor's management and its financial advisor, Claridge Advisory Group LLC, estimate the Debtor's enterprise value at a mid-point range of $280 million to $340 million, based on a combination of comparable company analysis, precedent transaction analysis, and discounted cash flow analysis. The Bellwether Valuation Services Inc. appraisal of real property, equipment, inventory, and intellectual property further supports this valuation range.
E. The Debtor's Professionals
30. The Debtor has retained or is in the process of retaining the following professionals to assist with the administration of this Chapter 11 case:
(a) Debtor's Bankruptcy Counsel: Calderwood & Harkness LLP. The engagement team consists of Nathaniel Bower (Responsible Partner, Bankruptcy & Restructuring), Colette Whitman (Billing Partner, Bankruptcy & Restructuring), Gabrielle Moss (Lead Associate, Bankruptcy & Restructuring), and Amy Chesterton (Working Associate, Bankruptcy & Restructuring). Calderwood & Harkness engagement number 1020-00002. An application to retain Calderwood & Harkness LLP as the Debtor's bankruptcy counsel is being filed concurrently herewith.
(b) Financial and Restructuring Advisor: Claridge Advisory Group LLC. The engagement team consists of Nolan Ashworth (Managing Director) and Rebecca Liu (Director). Mr. Ashworth's Declaration in Support of this Motion is filed separately as Exhibit D.
(c) Auditor and Tax Advisor: Holloway & Birch LLP. The engagement partner is Andrew Sorensen (Audit Partner). Holloway & Birch LLP has served as the Debtor's auditor since 2019.
(d) Appraiser: Bellwether Valuation Services Inc. The engagement is led by Gregory Pineda (Senior Managing Director). Bellwether has prepared an appraisal of the Debtor's real property, equipment, inventory, and intellectual property assets, which is referenced herein in connection with the adequate protection analysis.
(e) D&O Insurance: The Debtor maintains directors' and officers' liability insurance with Stonebridge Insurance Group Ltd. under Policy No. SIG-DO-2024-07821, providing an aggregate limit of $15,000,000.
III. THE DIP FACILITY
A. The DIP Marketing Process and Selection of the DIP Lenders
31. Prior to the Petition Date, the Debtor, with the assistance of its financial advisor, Claridge Advisory Group LLC, conducted a thorough process to identify and evaluate potential sources of debtor-in-possession financing. Claridge Advisory Group LLC has extensive experience in distressed financing transactions in the agricultural, industrial, and specialty chemical sectors, and brought to bear its market knowledge and lender relationships in conducting this process.
32. Beginning in early April 2025, Claridge Advisory contacted approximately twelve potential DIP financing sources, including commercial banks, direct lending funds, distressed debt funds, and specialty finance companies. Of these, five institutions executed non-disclosure agreements and received access to a virtual data room containing the Debtor's financial projections, historical financial statements, asset appraisals, and business plan materials. After a period of due diligence and negotiation, the Debtor received two actionable financing proposals.
33. First, the Debtor received an indicative standalone proposal from Ridgeline Opportunity Fund III LP for a DIP facility in the amount of $125,000,000, bearing interest at SOFR plus 900 basis points, with a SOFR floor of 4.50%, a closing fee of 2.50%, and more restrictive milestone deadlines, including a requirement that the Debtor file a plan of reorganization or Section 363 sale motion within 120 days of the Petition Date.
34. Second, the Debtor received the syndicate proposal led by Ironclad Capital Partners LP, in which Ironclad, Ridgeline Opportunity Fund III LP, and Bramblewood Credit Advisors LLC proposed a DIP facility in the amount of $175,000,000, bearing interest at SOFR plus 850 basis points, with a SOFR floor of 4.00%, a closing fee of 2.00%, and milestone deadlines that the Debtor's management and advisors considered more achievable, including a 150-day deadline for filing a plan or sale motion.
35. After careful evaluation of both proposals, considering facility size, pricing (including all-in cost of funds), covenant flexibility, milestone timing, lender experience, and certainty of execution, the Debtor determined, with the concurrence of Claridge Advisory Group LLC, that the Ironclad-led syndicate proposal represented the best available financing on the most favorable terms reasonably obtainable. The Ironclad syndicate proposal offered $50 million in additional liquidity compared to the Ridgeline standalone proposal, at a lower interest rate spread (850 bps versus 900 bps), a lower closing fee (2.00% versus 2.50%), and more flexible milestones.
36. Nolan Ashworth, Managing Director of Claridge Advisory Group LLC, will provide detailed testimony in his Declaration (filed separately as Exhibit D) supporting the reasonableness and necessity of the DIP terms and confirming that the Ironclad-led syndicate proposal represents the best available financing for the Debtor's estate.
B. The DIP Parties
37. The parties to the DIP Credit Agreement are as follows:
38. Borrower: Greenfield Agricultural Partners LLC, as debtor and debtor-in-possession.
39. Administrative Agent and Lead Arranger: Ironclad Capital Partners LP, a Delaware limited partnership with offices at 600 Lexington Avenue, 34th Floor, New York, New York 10022. Ironclad Capital Partners LP is a credit-focused alternative investment firm with approximately $8.2 billion in assets under management, specializing in distressed debt, special situations, and debtor-in-possession lending across the industrial, energy, and agricultural sectors. Ironclad's deal team for this transaction consists of Martin Halberstam (Managing Partner), Diana Voss (Partner, Head of Structured Credit), and Kevin Pratt (Vice President, Portfolio Management, deal lead). Ironclad is committing $100,000,000, representing 57.14% of the total DIP Facility.
40. Co-Lender: Ridgeline Opportunity Fund III LP, a Delaware limited partnership with offices at 200 S. Wacker Drive, Suite 2900, Chicago, Illinois 60606. The Ridgeline contact for this transaction is Samuel Ostrowski (Managing Director, Special Situations). Ridgeline is committing $50,000,000, representing 28.57% of the total DIP Facility.
41. Co-Lender: Bramblewood Credit Advisors LLC, a Delaware limited liability company with offices at 100 Federal Street, Suite 3100, Boston, Massachusetts 02110. The Bramblewood contact for this transaction is Christine Morel (Principal). Bramblewood is committing $25,000,000, representing 14.29% of the total DIP Facility.
42. Collateral Agent: Meridian Trust Company, a New York trust company with offices at 101 Park Avenue, 20th Floor, New York, New York 10178. The Meridian contact for this transaction is Robert Fennimore (Vice President, Corporate Trust). Meridian Trust Company also serves as the Indenture Trustee for the Debtor's pre-petition Senior Unsecured Notes; Meridian has represented that it has implemented appropriate information barriers and conflict management procedures with respect to its dual roles in this case.
43. Counsel to DIP Agent and DIP Lenders: Harmon & Keach LLP, 51 West 52nd Street, New York, New York 10019. The Harmon & Keach team consists of Richard Yeung (Partner, lead counsel) and Laura Brennan (Senior Associate).
C. Summary of Material Terms of the DIP Credit Agreement
44. The following is a summary of the material terms of the DIP Credit Agreement, dated as of May 22, 2025 (the anticipated date of entry of the Interim Order), a copy of which is attached as Exhibit B to the Proposed Interim Order. This summary is qualified in its entirety by reference to the DIP Credit Agreement, and in the event of any conflict between this summary and the terms of the DIP Credit Agreement, the DIP Credit Agreement shall control.
45. Facility Type. Senior secured superpriority revolving credit facility.
46. Facility Size. $175,000,000 in aggregate commitments, allocated among the DIP Lenders as follows:
47. Interest Rate. SOFR plus 850 basis points (8.50%) per annum, calculated on the basis of a 360-day year for actual days elapsed. The DIP Credit Agreement provides for a SOFR floor of 4.00%, resulting in an effective minimum all-in interest rate of 12.50% (4.00% floor plus 8.50% spread). Upon the occurrence and during the continuance of an Event of Default, the interest rate shall increase by an additional 200 basis points (i.e., SOFR plus 1,050 basis points), which default interest shall accrue automatically without further notice. Interest shall be payable monthly in arrears on the first business day of each calendar month.
48. Fees.
(a) Closing Fee: 2.00% of total commitments, equal to $3,500,000, earned in full upon entry of the Interim Order and payable from the initial DIP draw.
(b) Unused Line Fee: 0.50% per annum on the average daily undrawn portion of the DIP commitments, payable quarterly in arrears.
(c) Exit Fee: 1.00% of aggregate commitments, equal to $1,750,000, payable upon the earlier of maturity, termination, or repayment in full of the DIP Facility.
49. Interim Draw. Upon entry of the Interim Order, the Debtor shall be authorized to draw up to $80,000,000 under the DIP Facility to fund immediate operational needs, professional fees, and other purposes permitted by the DIP Orders and the DIP Budget.
50. Final Draw. Upon entry of the Final Order, the remaining $95,000,000 in availability under the DIP Facility shall become accessible to the Debtor, subject to satisfaction of the applicable conditions precedent set forth in the DIP Credit Agreement.
51. Maturity. The DIP Facility shall mature on the earliest of: (a) twelve (12) months from the Petition Date (i.e., May 15, 2026); (b) the effective date of a confirmed plan of reorganization in this Chapter 11 case; (c) the consummation of a sale of substantially all of the Debtor's assets under Section 363 of the Bankruptcy Code; or (d) the occurrence of an Event of Default that has not been waived by the requisite DIP Lenders.
52. Use of Proceeds. The proceeds of the DIP Facility shall be used for the following purposes, as set forth in the DIP Budget: (a) working capital and general corporate purposes of the Debtor in the ordinary course of business; (b) payment of costs of administration of this Chapter 11 case, including professional fees and expenses of the Debtor's retained professionals and any official committee; (c) adequate protection payments to pre-petition secured lenders as provided in the DIP Orders; (d) capital expenditures consistent with the DIP Budget; and (e) other purposes as may be approved by the DIP Agent or permitted under the DIP Orders.
53. Roll-Up. As a condition of the ABL Revolver lenders' consent to the DIP Facility and to priming, $20,000,000 of pre-petition ABL Revolver obligations owed to Prairie State Bank, N.A., Hawthorn National Bank, and Northland Savings Bank, F.S.B. shall be "rolled up" into the DIP Facility and treated as DIP obligations bearing the same interest rate, priority, and security as all other DIP obligations. The roll-up shall be effectuated from the proceeds of the initial interim draw.
D. Security and Priority of the DIP Facility
54. The DIP Facility is secured and prioritized as follows:
55. Superpriority Administrative Expense Claim. Pursuant to Section 364(c)(1) of the Bankruptcy Code, all DIP obligations shall constitute allowed superpriority administrative expense claims against the Debtor's estate, with priority over all administrative expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy Code, subject only to the Carve-Out (as defined below). The DIP superpriority claims shall have recourse to all pre-petition and post-petition property of the Debtor and the estate.
56. First-Priority Priming Liens. Pursuant to Section 364(d) of the Bankruptcy Code, all DIP obligations shall be secured by first-priority priming liens on all pre-petition collateral, priming the existing liens of Prairie State Bank, N.A., in its capacity as First Lien Agent under the First Lien Term Loan credit agreement and as Agent under the ABL Revolver credit agreement, and the liens of any other pre-petition secured creditor. The DIP priming liens shall be senior to and prime all existing liens on the Debtor's assets, subject only to the Carve-Out and to any valid, perfected, and non-avoidable liens existing as of the Petition Date that are senior to the pre-petition liens by operation of applicable non-bankruptcy law (e.g., certain statutory liens and purchase money security interests).
57. First-Priority Lien on Unencumbered Assets. Pursuant to Sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code, all DIP obligations shall be secured by first-priority liens on all assets of the Debtor that were not subject to valid, perfected liens as of the Petition Date, including any property acquired by the estate after the Petition Date, all proceeds and products thereof, and all post-petition assets of every kind and nature.
58. All DIP liens and superpriority claims are subject to the Carve-Out, as described in Section III.G below.
E. Financial Covenants
59. The DIP Credit Agreement contains the following financial covenants, which shall be tested on the dates and in the manner specified in the DIP Credit Agreement:
(a) Minimum Liquidity. The Debtor shall maintain minimum liquidity of not less than $15,000,000 at all times, measured as the sum of unrestricted cash and cash equivalents held by the Debtor plus the unused and available portion of the DIP commitments. Liquidity shall be tested daily based on the Debtor's internal treasury reports.
(b) Maximum Cumulative Variance to Budget. The Debtor's actual aggregate disbursements shall not exceed budgeted aggregate disbursements (as set forth in the DIP Budget) by more than fifteen percent (15%) on a rolling four-week basis. Budget variance shall be tested weekly, with reporting to the DIP Agent on each Wednesday for the preceding four-week period ending on the prior Friday.
(c) Minimum EBITDA. The Debtor's EBITDA (as defined in the DIP Credit Agreement) shall not be less than negative $5,000,000 for any rolling four-week period. This covenant establishes a floor on negative EBITDA performance, ensuring that the Debtor's operational losses do not exceed a level that would threaten the viability of the restructuring process.
F. Milestones.
60. The DIP Credit Agreement requires the Debtor to achieve the following case milestones:
(a) Interim DIP Order. The Court shall have entered the Interim Order approving the DIP Facility on an interim basis within five (5) business days of the Petition Date (i.e., by May 22, 2025).
(b) Final DIP Order. The Court shall have entered the Final Order approving the DIP Facility on a final basis within thirty-five (35) days of the Petition Date (i.e., by June 19, 2025).
(c) Filing of Plan or Sale Motion. The Debtor shall have filed either a plan of reorganization or a motion to sell substantially all of the Debtor's assets under Section 363 of the Bankruptcy Code within one hundred fifty (150) days of the Petition Date (i.e., by October 12, 2025).
(d) Confirmation or Closing. The Debtor shall have obtained either (i) entry of an order confirming a plan of reorganization or (ii) closing of a sale of substantially all assets under Section 363, within two hundred seventy (270) days of the Petition Date (i.e., by February 8, 2026).
61. Failure to achieve any milestone by the applicable deadline shall constitute an Event of Default under the DIP Credit Agreement, unless waived by the requisite DIP Lenders.
G. Carve-Out.
62. The DIP liens and DIP superpriority claims are subject to a carve-out (the "Carve-Out") for the payment of certain fees and expenses, structured as follows:
(a) Pre-Trigger Carve-Out. Prior to the delivery of a Carve-Out Trigger Notice (as defined below), the Carve-Out shall include all accrued but unpaid professional fees and expenses of the Debtor's retained professionals, any official committee's retained professionals, and fees payable to the United States Trustee or the Clerk of the Bankruptcy Court, in each case without cap or limitation.
(b) Post-Trigger Carve-Out. Upon the occurrence and delivery of a Carve-Out Trigger Notice by the DIP Agent (which may be delivered upon the occurrence of an Event of Default, a termination of the DIP commitments, or an acceleration of the DIP obligations), the Carve-Out shall include:
(i) $2,500,000 for the aggregate post-trigger professional fees and expenses of estate professionals, including the Debtor's counsel, financial advisors, and any official committee's counsel and advisors; and
(ii) $500,000 for fees payable to the United States Trustee under 28 U.S.C. § 1930 and to the Clerk of the Bankruptcy Court.
63. The aggregate post-trigger Carve-Out is $3,000,000. The Carve-Out is designed to ensure that estate professionals and the United States Trustee retain the ability to perform their essential functions even in a default or enforcement scenario, thereby preserving the integrity of the bankruptcy process and protecting the interests of all stakeholders in the estate. The Carve-Out structure is consistent with market practice in comparable Chapter 11 cases involving debtors of similar size and complexity.
H. DIP Budget
64. The Debtor, with the assistance of Claridge Advisory Group LLC, has prepared a thirteen-week cash flow budget (the "DIP Budget") covering the period from May 15, 2025 through August 13, 2025. The DIP Budget is attached as Exhibit A to the Proposed Interim Order and is incorporated herein by reference.
65. The DIP Budget reflects the Debtor's best estimate of its projected cash receipts and disbursements during the initial thirteen-week period, taking into account the seasonal nature of the Debtor's business, the anticipated trajectory of customer orders during the spring application and summer growing seasons, the Debtor's ongoing raw material and supply chain requirements, and the costs of administering this Chapter 11 case.
66. A summary of the DIP Budget is set forth in the following table (all figures in thousands of dollars):
67. As shown above, the Debtor projects a total net cash outflow of $35,050,000 over the thirteen-week budget period. The reconciliation is as follows: opening cash of $11,800,000 plus interim DIP draw of $80,000,000 less net cash outflow of $35,050,000 equals ending cash of $56,750,000. The projected ending cash balance of $56,750,000 comfortably exceeds the minimum liquidity covenant of $15,000,000, and the Debtor projects compliance with all DIP financial covenants throughout the initial thirteen-week budget period.
68. The DIP Budget reflects several important features of the Debtor's cash flow profile:
(a) Operating receipts increase from $38,200,000 in Weeks 1–4 to $49,800,000 in Weeks 9–13, reflecting the seasonal ramp-up in product deliveries and collections during the summer growing season.
(b) Operating disbursements remain relatively stable across the budget period, reflecting the Debtor's ongoing raw material purchases, payroll obligations, and other operating costs.
(c) Net operating cash flow improves from negative $5,900,000 in Weeks 1–4 to positive $2,300,000 in Weeks 9–13, as the seasonal revenue increase outpaces operating cost growth.
(d) Restructuring professional fees of $16,100,000 represent the estimated costs of the Debtor's counsel, financial advisor, and other retained professionals during the initial thirteen-week period.
(e) Debt service and adequate protection payments of $11,050,000 represent current-pay interest obligations to the pre-petition secured lenders as contemplated by the adequate protection provisions of the DIP Orders.
(f) Capital expenditures of $3,600,000 represent essential maintenance and safety-related capital spending required to maintain the Debtor's manufacturing plants in continuous operation.
69. The DIP Budget may be extended in four-week increments upon DIP Lender approval, and the Debtor anticipates preparing updated rolling thirteen-week budgets on a regular basis throughout the Chapter 11 case.
I. Events of Default
70. The DIP Credit Agreement contains customary events of default, including but not limited to the following:
(a) Failure by the Debtor to make any payment of principal, interest, fees, or other amounts when due under the DIP Credit Agreement or the DIP Orders;
(b) Breach of any representation or warranty made by the Debtor in the DIP Credit Agreement, the DIP Orders, or any certificate or other document delivered in connection therewith, which breach is material and, if curable, remains uncured for a period of five (5) business days after written notice from the DIP Agent;
(c) Breach by the Debtor of any financial covenant set forth in the DIP Credit Agreement, including the minimum liquidity covenant, the budget variance covenant, or the minimum EBITDA covenant;
(d) Failure by the Debtor to achieve any milestone set forth in Section III.F above by the applicable deadline;
(e) Conversion of this Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code, or dismissal of this Chapter 11 case;
(f) Appointment of a Chapter 11 trustee or an examiner with expanded powers (i.e., powers beyond the investigation of the Debtor's acts, conduct, assets, liabilities, and financial condition) in this Chapter 11 case;
(g) Entry of an order by the Court granting relief from the automatic stay under Section 362 of the Bankruptcy Code with respect to any material asset of the Debtor, where "material" is defined as any asset or group of related assets with a fair market value in excess of $2,500,000;
(h) Failure by the Debtor to comply with any provision of the DIP Orders;
(i) The occurrence of a material adverse change in the Debtor's business, assets, financial condition, or results of operations that, in the reasonable judgment of the Required DIP Lenders (as defined in the DIP Credit Agreement), materially impairs the Debtor's ability to perform its obligations under the DIP Credit Agreement or the DIP Orders;
(j) Cross-default to any other material obligation of the Debtor, where "material" is defined as any obligation in excess of $1,000,000.
71. Upon the occurrence and during the continuance of an Event of Default, the DIP Agent may, upon five (5) business days' written notice to the Debtor, counsel for any official committee, and the United States Trustee, exercise remedies available under the DIP Credit Agreement and the DIP Orders, including but not limited to termination of the DIP commitments, cessation of advances, and acceleration of all outstanding DIP obligations. All remedies are subject to the Carve-Out as provided in Section III.G above. The five-business-day notice period is designed to afford the Debtor, any official committee, and the Court an opportunity to respond to any proposed enforcement action before it takes effect.
J. Governing Law
72. The DIP Credit Agreement is governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles. The bankruptcy proceedings are governed by federal law, including the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules of the United States Bankruptcy Court for the Northern District of Iowa.
IV. THE DEBTOR'S NEED FOR DIP FINANCING
73. The Debtor's need for debtor-in-possession financing is urgent, immediate, and critical. As of the Petition Date, the Debtor had only $11,800,000 in cash — a sum that is grossly insufficient to fund even a single week of the Debtor's operations. As shown in the DIP Budget, operating disbursements in Weeks 1–4 alone total $44,100,000. Without immediate access to DIP financing, the Debtor will exhaust its available cash within days of the Petition Date and will be forced to cease operations entirely.
74. A cessation of operations would be catastrophic for all stakeholders in this case. Specifically, without immediate access to DIP financing, the Debtor will be unable to:
(a) Pay its employees. The Debtor employs approximately 2,300 individuals across its manufacturing plants, distribution centers, R&D farm, and corporate offices. The Debtor's biweekly payroll obligation is approximately $5,200,000. Without DIP financing, the Debtor will be unable to meet its payroll obligations, resulting in the loss of its skilled workforce, potential claims under the WARN Act, and the inability to restart operations even if financing were subsequently obtained.
(b) Purchase critical chemical raw materials. The Debtor's manufacturing operations require a continuous supply of active ingredients, solvents, surfactants, and other chemical raw materials. The Debtor's top five chemical raw material suppliers — which include essential sources of proprietary and sole-sourced active ingredients — are owed an aggregate of approximately $9,400,000 in pre-petition trade payables. Without DIP financing, the Debtor will be unable to pay for ongoing raw material deliveries, and these suppliers may refuse to ship product, resulting in the shutdown of the Debtor's manufacturing lines.
(c) Continue operations at its manufacturing plants. The Debtor's three manufacturing plants are designed for continuous or near-continuous operation. A shutdown of these facilities would require costly restart procedures, would result in the loss of work-in-progress inventory, and could trigger environmental compliance issues related to the handling and storage of chemical materials.
(d) Fund the restructuring process. The administration of this Chapter 11 case requires the retention of experienced bankruptcy counsel, financial advisors, and other professionals. The DIP Budget projects restructuring professional fees of $16,100,000 over the initial thirteen-week period. Without DIP financing, the Debtor will be unable to fund the retention and compensation of these professionals, undermining the restructuring process and the prospects for a value-maximizing outcome.
(e) Make adequate protection payments. The adequate protection package described in Section V below contemplates current-pay interest to the pre-petition secured lenders. Without DIP financing, the Debtor will be unable to make these payments, potentially jeopardizing the consent of the pre-petition secured lenders to the DIP Facility and exposing the estate to motions for relief from the automatic stay.
75. The seasonal nature of the Debtor's business makes the timing of this Motion particularly critical. The DIP Budget captures the tail of the spring application season and the full summer growing season — the period during which the Debtor generates the substantial majority of its annual revenue. Failure to operate during this period would not merely defer revenue; it would permanently destroy the Debtor's customer relationships, as farmers and distributors would be forced to source crop protection chemicals from competing suppliers. The Debtor's management team and financial advisor have determined that a failure to maintain operations during this critical window would reduce the Debtor's enterprise value by an estimated $80 million to $120 million, effectively rendering a successful reorganization or value-maximizing sale impossible.
76. The Debtor has been unable to obtain unsecured credit or credit secured only by junior liens on the Debtor's assets. As described in Section III.A above, the Debtor conducted a comprehensive marketing process and was unable to attract any financing proposal that did not require superpriority administrative expense status and priming liens. The Debtor's existing secured indebtedness of $382,300,000, combined with the Debtor's distressed financial condition and the uncertainty surrounding the ClearGuard XR re-registration, preclude the availability of unsecured or junior-lien financing in any amount sufficient to meet the Debtor's needs. The superpriority and priming lien structure set forth in the DIP Credit Agreement is therefore necessary and appropriate under the circumstances.
77. The Declaration of Patricia Langford, the Debtor's Chief Financial Officer, provides detailed testimony regarding the Debtor's urgent liquidity needs, the inadequacy of the Debtor's cash on hand, the seasonal dynamics of the Debtor's business, and the Debtor's inability to obtain financing on less burdensome terms. Ms. Langford's Declaration is filed separately as Exhibit C.
78. The Declaration of Nolan Ashworth, Managing Director of Claridge Advisory Group LLC, provides independent expert testimony regarding the marketing process conducted to identify potential DIP financing sources, the evaluation of competing proposals, the reasonableness of the DIP terms relative to market conditions, and the adequacy of the DIP Budget. Mr. Ashworth's Declaration is filed separately as Exhibit D.
V. ADEQUATE PROTECTION FOR PRE-PETITION SECURED LENDERS
A. The Pre-Petition Secured Lenders' Interests
79. The DIP Facility contemplates the grant of priming liens under Section 364(d) of the Bankruptcy Code, which will prime the existing liens of the pre-petition secured lenders. Accordingly, the Debtor is required to demonstrate that the interests of the pre-petition secured lenders are adequately protected within the meaning of Section 361 of the Bankruptcy Code.
80. Prairie State Bank, N.A., in its capacity as administrative agent under the First Lien Term Loan credit agreement, holds first-priority liens on substantially all assets of the Debtor on behalf of the First Lien Term Loan lenders. The outstanding principal balance under the First Lien Term Loan is $310,000,000.
81. Prairie State Bank, N.A., in its capacity as agent under the ABL Revolver credit agreement, along with participating banks Hawthorn National Bank and Northland Savings Bank, F.S.B., hold first-priority liens on accounts receivable and inventory of the Debtor under a split-collateral intercreditor arrangement. The outstanding drawn balance under the ABL Revolver is $72,300,000 of a $95,000,000 total commitment.
82. The Senior Unsecured Notes, held through Meridian Trust Company as Indenture Trustee, are unsecured obligations and therefore are not entitled to adequate protection in connection with the DIP priming.
B. Adequate Protection Package
83. Prairie State Bank, N.A., as First Lien Agent and ABL Agent, has indicated its conditional consent to the priming of its pre-petition liens by the DIP Facility, subject to the provision of the following adequate protection package. The Debtor understands that a formal consent letter, signed by Thomas Whitaker, Senior Vice President, Loan Workout Group, is expected to be delivered on or before May 20, 2025, in advance of the anticipated Interim Hearing. The adequate protection package consists of the following elements:
(a) Replacement Liens. The pre-petition secured lenders shall receive replacement liens on all DIP collateral (including all pre-petition and post-petition assets of the Debtor), which replacement liens shall be junior only to the DIP liens and the Carve-Out, and shall otherwise maintain the same relative priority as the pre-petition liens held by the First Lien Agent and the ABL Agent, respectively, prior to the Petition Date.
(b) Superpriority Administrative Expense Claim. The pre-petition secured lenders shall receive an allowed superpriority administrative expense claim under Section 507(b) of the Bankruptcy Code to the extent of any diminution in value of their collateral from and after the Petition Date, which claim shall be junior only to the DIP superpriority claim and the Carve-Out.
(c) Current-Pay Interest. The pre-petition secured lenders shall receive current-pay interest at the applicable non-default contract rate: SOFR plus 450 basis points for the First Lien Term Loan obligations, and SOFR plus 275 basis points for the ABL Revolver obligations. Interest shall be payable monthly in arrears. Current-pay interest is designed to compensate the pre-petition secured lenders for the time value of their investment during the pendency of this Chapter 11 case.
(d) Monthly Reporting. The Debtor shall provide to Prairie State Bank, N.A., as First Lien Agent and ABL Agent, a monthly reporting package containing detailed financial and operational information, including monthly financial statements, DIP Budget variance reports, accounts receivable and inventory aging reports, and such other information as the First Lien Agent may reasonably request.
84. In addition, the ABL Revolver lenders — Prairie State Bank, N.A., Hawthorn National Bank, and Northland Savings Bank, F.S.B. — have indicated their support for the DIP Facility, contingent on the roll-up of $20,000,000 of pre-petition ABL Revolver obligations into the DIP Facility, as described in Section III.C above. The roll-up provides the ABL lenders with enhanced recovery prospects by elevating a portion of their pre-petition claims to DIP-priority status, thereby securing their consent to the overall DIP structure.
85. The Adequate Protection Stipulation between the Debtor and Prairie State Bank, N.A. (in its dual capacity as First Lien Agent and ABL Agent) is being filed concurrently herewith and sets forth the detailed terms of the adequate protection package.
C. The Pre-Petition Secured Lenders Are Adequately Protected
86. The adequate protection package described above satisfies the requirements of Sections 361 and 364(d) of the Bankruptcy Code for several independent reasons.
87. First, the collateral value provides an adequate equity cushion. The Debtor's estimated enterprise value, at the mid-point of the $280 million to $340 million range, is $310 million. While the DIP Facility and pre-petition secured debt, in the aggregate, exceed this valuation, the going-concern value of the Debtor's business is expected to be preserved and enhanced through the Chapter 11 process. The DIP Facility, by enabling the Debtor to continue operations during the critical growing season, maintain its customer base, and pursue an orderly restructuring, is expected to maximize the value available for distribution to all creditors, including the pre-petition secured lenders. The alternative — an immediate cessation of operations and a forced liquidation of assets — would destroy significant value and leave the pre-petition secured lenders with recoveries far below current collateral values.
88. Second, the replacement liens and Section 507(b) superpriority claims ensure that the pre-petition secured lenders maintain the same relative priority they held pre-petition, adjusted only for the interposition of the DIP liens, which are necessary to preserve the going-concern value of the estate for the benefit of all stakeholders. The replacement liens attach to all pre-petition and post-petition assets, including any increase in asset value that results from the Debtor's continued operations during the Chapter 11 case.
89. Third, current-pay interest at the non-default contract rate ensures that the pre-petition secured lenders are not disadvantaged by the passage of time during the Chapter 11 case. The DIP Budget demonstrates that the Debtor's projected cash flows are sufficient to service adequate protection payments of $11,050,000 over the initial thirteen-week budget period.
90. Fourth, the monthly reporting package ensures that the pre-petition secured lenders receive timely and detailed information regarding the Debtor's financial performance, enabling them to monitor the status of their collateral and the progress of the restructuring.
91. Fifth, the Bellwether Valuation Services Inc. appraisal of real property, equipment, inventory, and intellectual property further supports the existence of adequate protection by establishing a floor on collateral values.
92. Taken together, the elements of the adequate protection package — replacement liens, Section 507(b) claims, current-pay interest, and reporting — provide robust and sufficient protection for the interests of the pre-petition secured lenders, satisfying the requirements of the Bankruptcy Code.
VI. LEGAL BASIS FOR THE RELIEF REQUESTED
A. Authority to Obtain Post-Petition Financing Under Section 364
93. Section 364 of the Bankruptcy Code sets forth a graduated framework for post-petition financing, reflecting Congressional intent to balance the need to attract post-petition credit with the protection of pre-petition creditor interests. At the lowest rung, Section 364(a) permits a debtor to obtain unsecured credit in the ordinary course of business. Where the debtor is unable to obtain unsecured credit allowable as an administrative expense under Section 503(b)(1), Section 364(b) permits the court, after notice and a hearing, to authorize the debtor to obtain such credit. Where the debtor is unable to obtain credit under Sections 364(a) or (b), Section 364(c) authorizes the court to approve post-petition financing with superpriority administrative expense status and/or liens on unencumbered or encumbered property. Finally, where even the protections of Section 364(c) are insufficient, Section 364(d) authorizes the court to approve post-petition financing secured by priming liens that are senior to existing liens, provided that the interests of existing lienholders are adequately protected.