[sheet: Cover]

Field	Value
Document Title	DIP Financing Closing Checklist
Matter	Driftwood Absolute Return Fund Ltd. — DIP Financing of Cascabel Financial Holdings, Inc.
Case No.	23-11487 (KFM)
Court	United States Bankruptcy Court for the District of Delaware
Judge	The Honorable Karen F. McAllister
Borrowers	Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC
DIP Lender	Driftwood Absolute Return Fund Ltd.
DIP Lender's Counsel	Calderwood & Harkness LLP
Facility Size	$75,000,000 ($43,000,000 New Money + $32,000,000 Roll-Up)
Petition Date	September 8, 2023
Interim DIP Order Entered	September 15, 2023
Final DIP Order Entered	October 13, 2023
Plan Effective Date / DIP Repaid	February 16, 2024
Prepared By	Amy Chesterton and Nathan Ikeda, Calderwood & Harkness LLP
Reviewed By	Colette Whitman, Responsible Partner
C&H New York Office	599 Lexington Avenue, New York, NY 10022
C&H Wilmington Office	1000 North King Street, Suite 300, Wilmington, DE 19801
Last Updated	February 16, 2024

[sheet: Conditions Precedent — Draw 1]

Item No.	Category	Description	DIP Credit Agreement Section	Responsible Party	Due Date	Date Completed	Status	Notes
1	Court Order	Entry of Interim DIP Order authorizing interim borrowing of $18,000,000, granting interim priming liens, and providing interim adequate protection	§ 4.01(a)	Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP	September 13, 2023 (5 bus. days from Petition Date)	September 15, 2023	Complete	Entered by Hon. Karen F. McAllister; Case No. 23-11487 (KFM)
2	Court Filing	Filing of voluntary Chapter 11 petition by Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC	§ 4.01(b)	Whitfield, Graves & Sato LLP (Jonathan R. Whitfield)	September 8, 2023	September 8, 2023	Complete	Jointly administered under Case No. 23-11487 (KFM); Ridgeline Community Bank excluded from filing
3	Court Filing	Filing of Motion for Entry of Interim and Final Orders Authorizing DIP Financing, Granting Priming Liens, and Approving Roll-Up	§ 4.01(a)	Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP	September 8, 2023	September 8, 2023	Complete	Filed simultaneously with petition
4	Executed Agreement	Execution and delivery of the Senior Secured Superpriority DIP Credit Agreement by Borrowers (Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC) and DIP Lender (Driftwood Absolute Return Fund Ltd.)	§ 4.01(c)	Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP	September 15, 2023	September 15, 2023	Complete	Execution version dated as of October 13, 2023 (effective upon Final DIP Order); interim provisions effective September 15, 2023
5	Executed Agreement	Execution and delivery of DIP Security Agreement and all ancillary security documents granting first priority priming liens on substantially all assets of the Debtors (excluding Ridgeline Community Bank assets subject to regulatory restrictions)	§ 4.01(d)	Calderwood & Harkness LLP	September 15, 2023	September 15, 2023	Complete	Includes lien on avoidance action proceeds
6	Officer's Certificate	Officer's Certificate of Cascabel Financial Holdings, Inc. signed by Susan K. Nakamura (CFO) certifying (i) accuracy of representations and warranties, (ii) no Event of Default, (iii) material adverse change, and (iv) corporate authority	§ 4.01(e)	Whitfield, Graves & Sato LLP / Susan K. Nakamura	September 15, 2023	September 15, 2023	Complete
7	Officer's Certificate	Secretary's Certificate of each Borrower certifying resolutions of board of directors/managers authorizing DIP facility, incumbency of officers, and organizational documents	§ 4.01(f)	Whitfield, Graves & Sato LLP	September 15, 2023	September 15, 2023	Complete	Includes certificates for both CFH and CAM
8	Legal Opinion	Legal opinion of Whitfield, Graves & Sato LLP (Debtor's counsel) as to corporate authority, enforceability, and no conflicts	§ 4.01(g)	Whitfield, Graves & Sato LLP (Jonathan R. Whitfield / Rachel P. Dumont)	September 15, 2023	September 15, 2023	Complete
9	Budget	Delivery of approved 13-week rolling cash flow budget (Exhibit B to DIP Credit Agreement)	§ 4.01(h)	Alderpoint Advisory Partners LLC (CRO Terrence M. Kowalski) / Calderwood & Harkness LLP	September 15, 2023	September 15, 2023	Complete	Budget includes projected receipts, operating disbursements, professional fee accruals, adequate protection payments, and DIP interest/fee calculations; variance thresholds: revenue ±10%, disbursements ±15%, tested cumulative bi-weekly
10	Lien Search	UCC lien search results for Delaware (Secretary of State) for Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC	§ 4.01(i)	Calderwood & Harkness LLP (Nathan Ikeda)	September 15, 2023	September 14, 2023	Complete	Confirms existing first lien in favor of Velthorn National Bank, N.A. as administrative agent for the $120,000,000 pre-petition first lien term loan
11	Lien Search	Judgment and tax lien searches for Debtors in Delaware and New York	§ 4.01(i)	Calderwood & Harkness LLP (Nathan Ikeda)	September 15, 2023	September 14, 2023	Complete	No material undisclosed liens identified
12	UCC Filing	Filing of UCC-1 financing statements in Delaware perfecting DIP priming liens in favor of Driftwood Absolute Return Fund Ltd.	§ 4.01(j)	Calderwood & Harkness LLP (Nathan Ikeda)	September 15, 2023	September 15, 2023	Complete	Filed with Delaware Secretary of State
13	Insurance	Evidence of insurance coverage satisfactory to DIP Lender, with DIP Lender named as additional insured and loss payee	§ 4.01(k)	Whitfield, Graves & Sato LLP / Cascabel	September 15, 2023	September 15, 2023	Complete
14	Fee Payment	Payment of commitment fee of $1,500,000 (2.00% × $75,000,000 total commitment) to Driftwood	§ 4.01(l)	Cascabel (Susan K. Nakamura) — funded from Draw 1 proceeds	September 15, 2023	September 15, 2023	Complete	Deducted from Draw 1 proceeds at closing
15	Reserve Funding	Funding of $3,500,000 adequate protection reserve from Draw 1 proceeds	§ 4.01(m)	Cascabel / Calderwood & Harkness LLP	September 15, 2023	September 15, 2023	Complete	Reserve for adequate protection of pre-petition first lien lenders (Velthorn $38M, Pinnacle $28M, Brindoval $22M = $88M)
16	Organizational Documents	Certified copies of certificate of incorporation, bylaws, and operating agreements of each Borrower	§ 4.01(n)	Whitfield, Graves & Sato LLP	September 15, 2023	September 15, 2023	Complete	CFH — Delaware corporation; CAM — Delaware LLC
17	Good Standing	Good standing certificates from the Delaware Secretary of State for Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC	§ 4.01(o)	Whitfield, Graves & Sato LLP	September 15, 2023	September 14, 2023	Complete	Dated within 10 days of closing
18	Solvency	Solvency certificate of CRO (Terrence M. Kowalski) with respect to the Debtors on a post-DIP basis (excluding Ridgeline Community Bank)	§ 4.01(p)	Alderpoint Advisory Partners LLC	September 15, 2023	September 15, 2023	Complete	Cascabel total assets ~$620M; total liabilities ~$710M; negative equity ~($90M); solvency measured on going-concern/reorganization basis
19	Wire Instructions	Delivery of wire instructions for DIP Lender (Driftwood) and Borrowers	§ 4.01(q)	Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP	September 15, 2023	September 15, 2023	Complete
20	Borrowing Notice	Delivery of borrowing notice for Draw 1 in the amount of $18,000,000	§ 2.02	Whitfield, Graves & Sato LLP / Susan K. Nakamura	September 15, 2023	September 15, 2023	Complete	Net proceeds after commitment fee ($1.5M) and adequate protection reserve ($3.5M) = $13,000,000
21	Regulatory Notice	Notice to the Delaware Office of the State Bank Commissioner regarding the Chapter 11 filing and DIP financing (as it relates to Ridgeline Community Bank, which is excluded from the Chapter 11 case but is a subsidiary of CFH)	§ 4.01(r)	Whitfield, Graves & Sato LLP	September 15, 2023	September 12, 2023	Complete	Ridgeline Community Bank continues operating under regulatory supervision; ring-fenced from Chapter 11 case
22	Regulatory Notice	Notice to the FDIC regarding the Chapter 11 filing and DIP financing of Cascabel Financial Holdings, Inc. as bank holding company of Ridgeline Community Bank (total deposits ~$385M)	§ 4.01(r)	Whitfield, Graves & Sato LLP	September 15, 2023	September 12, 2023	Complete

[sheet: Conditions Precedent — Draw 2]

Item No.	Category	Description	DIP Credit Agreement Section	Responsible Party	Due Date	Date Completed	Status	Notes
1	Court Order	Entry of Final DIP Order authorizing final borrowing (full $43,000,000 new money tranche including Draw 2 of $25,000,000), approving $32,000,000 roll-up of Driftwood's pre-petition first lien claims, granting final priming liens, and establishing Challenge Periods	§ 4.02(a)	Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP	October 13, 2023 (35 days from Petition Date)	October 13, 2023	Complete	Entered by Hon. Karen F. McAllister; Challenge Period: 75 days for Committee (expires Dec. 27, 2023), 60 days for other parties (expires Dec. 12, 2023)
2	Court Filing	Filing of Adequate Protection Stipulation between Driftwood, Cascabel, and Ad Hoc Group of First Lien Lenders (Velthorn National Bank, N.A. and Pinnacle Credit Partners Fund II, LP)	§ 4.02(b)	Calderwood & Harkness LLP / Hartwell & Crane LLP / Whitfield, Graves & Sato LLP	October 13, 2023	October 9, 2023	Complete	Resolves Ad Hoc Group objection filed Sept. 19, 2023; global settlement reached Oct. 6, 2023; enhanced adequate protection: replacement liens, § 507(b) claims, monthly current-pay interest on $88M at SOFR + 425 bps, $3.5M reserve, Hartwell & Crane fees capped at $1.2M
3	Court Order	Resolution of UCC limited objection — increase Committee Carve-Out share from $500,000 to $750,000 and extend Committee Challenge Period from 60 days to 75 days	§ 4.02(b)	Calderwood & Harkness LLP / Breckenridge McCoy LLP (Thomas A. Breckenridge)	October 13, 2023	October 9, 2023	Complete	UCC objection filed Oct. 2, 2023; resolved by agreement incorporated in Adequate Protection Stipulation
4	Roll-Up	Deemed roll-up of $32,000,000 of Driftwood's pre-petition first lien claims into the DIP facility with superpriority administrative expense claim status, pari passu with new money tranche	§ 2.04	Calderwood & Harkness LLP	October 13, 2023	October 13, 2023	Complete	Dollar-for-dollar roll-up; Driftwood's pre-petition first lien position: $32M face value (26.67% of $120M total first lien); cost basis: $21,760,000 ($32M × $0.68)
5	Officer's Certificate	Bring-down Officer's Certificate of Cascabel Financial Holdings, Inc. (Susan K. Nakamura, CFO) confirming continued accuracy of representations and warranties and no Event of Default	§ 4.02(c)	Whitfield, Graves & Sato LLP / Susan K. Nakamura	October 13, 2023	October 13, 2023	Complete
6	Budget	Delivery of updated 13-week rolling cash flow budget (updated per 4-week cycle)	§ 4.02(d)	Alderpoint Advisory Partners LLC (CRO Terrence M. Kowalski)	October 13, 2023	October 12, 2023	Complete	Variance testing: revenue ±10%, disbursements ±15%, tested cumulative bi-weekly
7	Compliance Certificate	Budget compliance certificate confirming Debtors are within permitted variances for the period since Draw 1	§ 4.02(e)	Alderpoint Advisory Partners LLC / Susan K. Nakamura	October 13, 2023	October 12, 2023	Complete
8	Borrowing Notice	Delivery of borrowing notice for Draw 2 in the amount of $25,000,000	§ 2.02	Whitfield, Graves & Sato LLP / Susan K. Nakamura	October 13, 2023	October 13, 2023	Complete	Total new money funded: $18M + $25M = $43M
9	No Material Adverse Change	Confirmation that no Material Adverse Change has occurred since the Petition Date	§ 4.02(f)	Whitfield, Graves & Sato LLP / Gerald T. Harmon (CEO)	October 13, 2023	October 13, 2023	Complete
10	Adequate Protection Payment	Confirmation of first adequate protection payment to pre-petition first lien lenders ($88M at SOFR + 425 bps; estimated ~9.58% all-in; monthly payment ~$702,133)	§ 4.02(g)	Cascabel / Velthorn National Bank, N.A. (as agent)	October 13, 2023	October 10, 2023	Complete	Payment covers period from Petition Date through September 30, 2023
11	Lien Search	Updated UCC and judgment lien searches for Debtors confirming no intervening liens	§ 4.02(h)	Calderwood & Harkness LLP (Nathan Ikeda)	October 13, 2023	October 11, 2023	Complete
12	No Challenge	Confirmation that no challenge to pre-petition liens or roll-up has been commenced as of the Final DIP Order date	§ 4.02(i)	Calderwood & Harkness LLP	October 13, 2023	October 13, 2023	Complete	Challenge Period not yet expired; no challenge filed

[sheet: Court Filings & Orders]

Item No.	Document	Filed / Entered Date	Docket No.	Filing Party	Responsible Attorney	Status	Notes
1	Voluntary Chapter 11 Petition — Cascabel Financial Holdings, Inc.	September 8, 2023	Dkt. 1	Cascabel Financial Holdings, Inc.	Jonathan R. Whitfield (Whitfield, Graves & Sato LLP)	Filed	Jointly administered with Cascabel Asset Management LLC; Ridgeline Community Bank excluded
2	Voluntary Chapter 11 Petition — Cascabel Asset Management LLC	September 8, 2023	Dkt. 2	Cascabel Asset Management LLC	Jonathan R. Whitfield	Filed	SEC-registered investment adviser; managed ~$1.2B in client AUM
3	Motion for Joint Administration	September 8, 2023	Dkt. 5	Debtors	Jonathan R. Whitfield	Filed / Granted	Granted September 8, 2023
4	First Day Motions (Cash Management, Wages, Utilities, etc.)	September 8, 2023	Dkt. 6–14	Debtors	Rachel P. Dumont (Whitfield, Graves & Sato LLP)	Filed / Granted	Interim orders entered September 15, 2023; final orders entered October 13, 2023
5	Motion for Entry of Interim and Final Orders Authorizing DIP Financing, Granting Priming Liens, and Approving Roll-Up	September 8, 2023	Dkt. 15	Debtors	Jonathan R. Whitfield / Colette Whitman (Calderwood & Harkness LLP)	Filed	$75M facility: $43M new money + $32M roll-up; §§ 364(c) and 364(d)
6	Declaration of Terrence M. Kowalski (CRO) in Support of DIP Motion	September 8, 2023	Dkt. 16	Debtors	Jonathan R. Whitfield	Filed	Details need for DIP financing and basis for proposed budget
7	Declaration of Marcus Ellison (Driftwood CIO) in Support of DIP Motion	September 8, 2023	Dkt. 17	Driftwood Absolute Return Fund Ltd.	Colette Whitman (Calderwood & Harkness LLP)	Filed	Details DIP Lender's pre-petition position and DIP terms
8	Interim DIP Order	September 15, 2023	Dkt. 48	Court	Hon. Karen F. McAllister	Entered	Authorizes Draw 1 of $18M; grants interim priming liens; schedules final hearing
9	Ad Hoc Group Objection to DIP Motion (Priming and Roll-Up)	September 19, 2023	Dkt. 62	Ad Hoc Group of First Lien Lenders (Velthorn $38M + Pinnacle $28M = $66M)	Monica L. Hartwell (Hartwell & Crane LLP)	Filed / Resolved	Resolved via Adequate Protection Stipulation
10	Schedules of Assets and Liabilities	September 22, 2023	Dkt. 71	Debtors	Rachel P. Dumont (Whitfield, Graves & Sato LLP)	Filed	Total assets ~$620M; total liabilities ~$710M; negative equity ~($90M)
11	Notice of Appointment of Official Committee of Unsecured Creditors	September 22, 2023	Dkt. 73	U.S. Trustee	—	Filed	Chair: Vendara Technology Solutions, Inc. (owed $3.2M); members include Cornerpoint Consulting Group LLC (owed $1.8M) and three former executives ($2.4M deferred comp)
12	Application to Retain Breckenridge McCoy LLP as UCC Counsel	September 28, 2023	Dkt. 82	Official Committee of Unsecured Creditors	Thomas A. Breckenridge (Breckenridge McCoy LLP)	Filed / Approved	Approved October 13, 2023
13	UCC Limited Objection to DIP Motion (Carve-Out and Challenge Period)	October 2, 2023	Dkt. 89	Official Committee of Unsecured Creditors	Thomas A. Breckenridge (Breckenridge McCoy LLP)	Filed / Resolved	Resolved: Committee Carve-Out increased to $750K; Challenge Period extended to 75 days
14	Debtors' Reply to Ad Hoc Group Objection and UCC Limited Objection	October 5, 2023	Dkt. 95	Debtors	Jonathan R. Whitfield / Rachel P. Dumont	Filed	Filed in advance of final hearing
15	Adequate Protection Stipulation	October 9, 2023	Dkt. 102	Driftwood / Cascabel / Ad Hoc Group	Colette Whitman (Calderwood & Harkness LLP) / Monica L. Hartwell / Jonathan R. Whitfield	Filed	Global settlement reached Oct. 6, 2023; embodies enhanced adequate protection package
16	Final DIP Order	October 13, 2023	Dkt. 115	Court	Hon. Karen F. McAllister	Entered	Authorizes full $43M new money + $32M roll-up; final priming liens; Challenge Period: Committee 75 days (exp. Dec. 27, 2023), others 60 days (exp. Dec. 12, 2023)
17	Plan and Disclosure Statement (Second Amended Plan of Reorganization)	December 7, 2023	Dkt. 289	Debtors	Jonathan R. Whitfield / Rachel P. Dumont	Filed	Filed within 90-day milestone (Day 90 = Dec. 7, 2023)
18	Order Approving Disclosure Statement	December 22, 2023	Dkt. 325	Court	Hon. Karen F. McAllister	Entered	Solicitation period: Dec. 23, 2023 – Jan. 19, 2024
19	Confirmation Order	January 29, 2024	Dkt. 412	Court	Hon. Karen F. McAllister	Entered	Day 143 from Petition Date; within 150-day milestone
20	Notice of Plan Effective Date	February 16, 2024	Dkt. 438	Debtors	Jonathan R. Whitfield	Filed	Day 161 from Petition Date; within 180-day milestone; DIP facility repaid in full

[sheet: Regulatory Notices]

Item No.	Regulator / Recipient	Subject	Date Sent	Sent By	Method	Acknowledgment Received	Status	Notes
1	Delaware Office of the State Bank Commissioner	Notice of Chapter 11 Filing by Cascabel Financial Holdings, Inc. (parent of Ridgeline Community Bank)	September 12, 2023	Whitfield, Graves & Sato LLP (Jonathan R. Whitfield)	Sundial Data Systems / Email	September 14, 2023	Complete	Ridgeline Community Bank excluded from Ch. 11 filing; continues operating under regulatory supervision; state-chartered commercial bank
2	FDIC	Notice of Chapter 11 Filing and DIP Financing — Cascabel Financial Holdings, Inc. as bank holding company of Ridgeline Community Bank (total deposits ~$385M)	September 12, 2023	Whitfield, Graves & Sato LLP (Jonathan R. Whitfield)	Sundial Data Systems / Email	September 18, 2023	Complete	Ridgeline ring-fenced from Chapter 11 case; DIP liens do not attach to Ridgeline assets
3	SEC (Division of Investment Management)	Notice regarding Cascabel Asset Management LLC Chapter 11 filing — SEC-registered investment adviser managing ~$1.2B in client AUM	September 12, 2023	Whitfield, Graves & Sato LLP	EDGAR / Email	September 15, 2023	Complete	CAM is a co-debtor in the Chapter 11 case
4	Delaware Office of the State Bank Commissioner	Notice of Entry of Final DIP Order and DIP Lien Structure (confirmation that DIP liens exclude Ridgeline Community Bank assets)	October 15, 2023	Whitfield, Graves & Sato LLP	Sundial Data Systems / Email	October 19, 2023	Complete
5	FDIC	Notice of Entry of Final DIP Order	October 15, 2023	Whitfield, Graves & Sato LLP	Sundial Data Systems / Email	October 22, 2023	Complete
6	SEC (Division of Investment Management)	Notice of Entry of Final DIP Order and continued operations of Cascabel Asset Management LLC during Chapter 11	October 15, 2023	Whitfield, Graves & Sato LLP	EDGAR / Email	October 23, 2023	Complete
7	Delaware Office of the State Bank Commissioner	Notice of Plan Confirmation and Effective Date; continued regulatory status of Ridgeline Community Bank	February 14, 2024	Whitfield, Graves & Sato LLP	Sundial Data Systems / Email	February 16, 2024	Complete
8	FDIC	Notice of Plan Confirmation and Effective Date; continued regulatory status of Ridgeline Community Bank	February 14, 2024	Whitfield, Graves & Sato LLP	Sundial Data Systems / Email	February 19, 2024	Complete	Ridgeline Community Bank continues operating post-emergence

[sheet: Adequate Protection Payments]

Item No.	Payment Period	Due Date	Amount Paid	Interest Rate Applied	Principal Base	Paid To	Date Paid	Status	Notes
1	Sept. 8–30, 2023 (partial month)	October 15, 2023	$512,911	~9.58% (SOFR + 425 bps, assuming 5.33% SOFR)	$88,000,000	Velthorn National Bank, N.A. (as administrative agent for pre-petition first lien lenders: Velthorn $38M, Pinnacle $28M, Brindoval $22M)	October 10, 2023	Complete	Prorated for 22 days; paid from operating cash and adequate protection reserve
2	October 2023	November 15, 2023	$702,133	~9.58%	$88,000,000	Velthorn National Bank, N.A.	November 14, 2023	Complete	Monthly payment = $88M × 9.58% ÷ 12
3	November 2023	December 15, 2023	$702,133	~9.58%	$88,000,000	Velthorn National Bank, N.A.	December 14, 2023	Complete
4	December 2023	January 15, 2024	$702,133	~9.58%	$88,000,000	Velthorn National Bank, N.A.	January 12, 2024	Complete
5	January 2024	February 15, 2024	$702,133	~9.58%	$88,000,000	Velthorn National Bank, N.A.	February 14, 2024	Complete	Final adequate protection payment prior to Plan Effective Date
6	February 1–16, 2024 (partial month)	At Effective Date	$373,133	~9.58%	$88,000,000	Velthorn National Bank, N.A.	February 16, 2024	Complete	Prorated for 16 days; paid at Plan Effective Date

[sheet: Cover]
Field | Value
Document Title | DIP Financing Closing Checklist
Matter | Driftwood Absolute Return Fund Ltd. — DIP Financing of Cascabel Financial Holdings, Inc.
Case No. | 23-11487 (KFM)
Court | United States Bankruptcy Court for the District of Delaware
Judge | The Honorable Karen F. McAllister
Borrowers | Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC
DIP Lender | Driftwood Absolute Return Fund Ltd.
DIP Lender's Counsel | Calderwood & Harkness LLP
Facility Size | $75,000,000 ($43,000,000 New Money + $32,000,000 Roll-Up)
Petition Date | September 8, 2023
Interim DIP Order Entered | September 15, 2023
Final DIP Order Entered | October 13, 2023
Plan Effective Date / DIP Repaid | February 16, 2024
Prepared By | Amy Chesterton and Nathan Ikeda, Calderwood & Harkness LLP
Reviewed By | Colette Whitman, Responsible Partner
C&H New York Office | 599 Lexington Avenue, New York, NY 10022
C&H Wilmington Office | 1000 North King Street, Suite 300, Wilmington, DE 19801
Last Updated | February 16, 2024
[sheet: Conditions Precedent — Draw 1]
Item No. | Category | Description | DIP Credit Agreement Section | Responsible Party | Due Date | Date Completed | Status | Notes
1 | Court Order | Entry of Interim DIP Order authorizing interim borrowing of $18,000,000, granting interim priming liens, and providing interim adequate protection | § 4.01(a) | Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP | September 13, 2023 (5 bus. days from Petition Date) | September 15, 2023 | Complete | Entered by Hon. Karen F. McAllister; Case No. 23-11487 (KFM)
2 | Court Filing | Filing of voluntary Chapter 11 petition by Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC | § 4.01(b) | Whitfield, Graves & Sato LLP (Jonathan R. Whitfield) | September 8, 2023 | September 8, 2023 | Complete | Jointly administered under Case No. 23-11487 (KFM); Ridgeline Community Bank excluded from filing
3 | Court Filing | Filing of Motion for Entry of Interim and Final Orders Authorizing DIP Financing, Granting Priming Liens, and Approving Roll-Up | § 4.01(a) | Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP | September 8, 2023 | September 8, 2023 | Complete | Filed simultaneously with petition
4 | Executed Agreement | Execution and delivery of the Senior Secured Superpriority DIP Credit Agreement by Borrowers (Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC) and DIP Lender (Driftwood Absolute Return Fund Ltd.) | § 4.01(c) | Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP | September 15, 2023 | September 15, 2023 | Complete | Execution version dated as of October 13, 2023 (effective upon Final DIP Order); interim provisions effective September 15, 2023
5 | Executed Agreement | Execution and delivery of DIP Security Agreement and all ancillary security documents granting first priority priming liens on substantially all assets of the Debtors (excluding Ridgeline Community Bank assets subject to regulatory restrictions) | § 4.01(d) | Calderwood & Harkness LLP | September 15, 2023 | September 15, 2023 | Complete | Includes lien on avoidance action proceeds
6 | Officer's Certificate | Officer's Certificate of Cascabel Financial Holdings, Inc. signed by Susan K. Nakamura (CFO) certifying (i) accuracy of representations and warranties, (ii) no Event of Default, (iii) material adverse change, and (iv) corporate authority | § 4.01(e) | Whitfield, Graves & Sato LLP / Susan K. Nakamura | September 15, 2023 | September 15, 2023 | Complete
7 | Officer's Certificate | Secretary's Certificate of each Borrower certifying resolutions of board of directors/managers authorizing DIP facility, incumbency of officers, and organizational documents | § 4.01(f) | Whitfield, Graves & Sato LLP | September 15, 2023 | September 15, 2023 | Complete | Includes certificates for both CFH and CAM
8 | Legal Opinion | Legal opinion of Whitfield, Graves & Sato LLP (Debtor's counsel) as to corporate authority, enforceability, and no conflicts | § 4.01(g) | Whitfield, Graves & Sato LLP (Jonathan R. Whitfield / Rachel P. Dumont) | September 15, 2023 | September 15, 2023 | Complete
9 | Budget | Delivery of approved 13-week rolling cash flow budget (Exhibit B to DIP Credit Agreement) | § 4.01(h) | Alderpoint Advisory Partners LLC (CRO Terrence M. Kowalski) / Calderwood & Harkness LLP | September 15, 2023 | September 15, 2023 | Complete | Budget includes projected receipts, operating disbursements, professional fee accruals, adequate protection payments, and DIP interest/fee calculations; variance thresholds: revenue ±10%, disbursements ±15%, tested cumulative bi-weekly
10 | Lien Search | UCC lien search results for Delaware (Secretary of State) for Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC | § 4.01(i) | Calderwood & Harkness LLP (Nathan Ikeda) | September 15, 2023 | September 14, 2023 | Complete | Confirms existing first lien in favor of Velthorn National Bank, N.A. as administrative agent for the $120,000,000 pre-petition first lien term loan
11 | Lien Search | Judgment and tax lien searches for Debtors in Delaware and New York | § 4.01(i) | Calderwood & Harkness LLP (Nathan Ikeda) | September 15, 2023 | September 14, 2023 | Complete | No material undisclosed liens identified
12 | UCC Filing | Filing of UCC-1 financing statements in Delaware perfecting DIP priming liens in favor of Driftwood Absolute Return Fund Ltd. | § 4.01(j) | Calderwood & Harkness LLP (Nathan Ikeda) | September 15, 2023 | September 15, 2023 | Complete | Filed with Delaware Secretary of State
13 | Insurance | Evidence of insurance coverage satisfactory to DIP Lender, with DIP Lender named as additional insured and loss payee | § 4.01(k) | Whitfield, Graves & Sato LLP / Cascabel | September 15, 2023 | September 15, 2023 | Complete
14 | Fee Payment | Payment of commitment fee of $1,500,000 (2.00% × $75,000,000 total commitment) to Driftwood | § 4.01(l) | Cascabel (Susan K. Nakamura) — funded from Draw 1 proceeds | September 15, 2023 | September 15, 2023 | Complete | Deducted from Draw 1 proceeds at closing
15 | Reserve Funding | Funding of $3,500,000 adequate protection reserve from Draw 1 proceeds | § 4.01(m) | Cascabel / Calderwood & Harkness LLP | September 15, 2023 | September 15, 2023 | Complete | Reserve for adequate protection of pre-petition first lien lenders (Velthorn $38M, Pinnacle $28M, Brindoval $22M = $88M)
16 | Organizational Documents | Certified copies of certificate of incorporation, bylaws, and operating agreements of each Borrower | § 4.01(n) | Whitfield, Graves & Sato LLP | September 15, 2023 | September 15, 2023 | Complete | CFH — Delaware corporation; CAM — Delaware LLC
17 | Good Standing | Good standing certificates from the Delaware Secretary of State for Cascabel Financial Holdings, Inc. and Cascabel Asset Management LLC | § 4.01(o) | Whitfield, Graves & Sato LLP | September 15, 2023 | September 14, 2023 | Complete | Dated within 10 days of closing
18 | Solvency | Solvency certificate of CRO (Terrence M. Kowalski) with respect to the Debtors on a post-DIP basis (excluding Ridgeline Community Bank) | § 4.01(p) | Alderpoint Advisory Partners LLC | September 15, 2023 | September 15, 2023 | Complete | Cascabel total assets ~$620M; total liabilities ~$710M; negative equity ~($90M); solvency measured on going-concern/reorganization basis
19 | Wire Instructions | Delivery of wire instructions for DIP Lender (Driftwood) and Borrowers | § 4.01(q) | Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP | September 15, 2023 | September 15, 2023 | Complete
20 | Borrowing Notice | Delivery of borrowing notice for Draw 1 in the amount of $18,000,000 | § 2.02 | Whitfield, Graves & Sato LLP / Susan K. Nakamura | September 15, 2023 | September 15, 2023 | Complete | Net proceeds after commitment fee ($1.5M) and adequate protection reserve ($3.5M) = $13,000,000
21 | Regulatory Notice | Notice to the Delaware Office of the State Bank Commissioner regarding the Chapter 11 filing and DIP financing (as it relates to Ridgeline Community Bank, which is excluded from the Chapter 11 case but is a subsidiary of CFH) | § 4.01(r) | Whitfield, Graves & Sato LLP | September 15, 2023 | September 12, 2023 | Complete | Ridgeline Community Bank continues operating under regulatory supervision; ring-fenced from Chapter 11 case
22 | Regulatory Notice | Notice to the FDIC regarding the Chapter 11 filing and DIP financing of Cascabel Financial Holdings, Inc. as bank holding company of Ridgeline Community Bank (total deposits ~$385M) | § 4.01(r) | Whitfield, Graves & Sato LLP | September 15, 2023 | September 12, 2023 | Complete
[sheet: Conditions Precedent — Draw 2]
Item No. | Category | Description | DIP Credit Agreement Section | Responsible Party | Due Date | Date Completed | Status | Notes
1 | Court Order | Entry of Final DIP Order authorizing final borrowing (full $43,000,000 new money tranche including Draw 2 of $25,000,000), approving $32,000,000 roll-up of Driftwood's pre-petition first lien claims, granting final priming liens, and establishing Challenge Periods | § 4.02(a) | Calderwood & Harkness LLP / Whitfield, Graves & Sato LLP | October 13, 2023 (35 days from Petition Date) | October 13, 2023 | Complete | Entered by Hon. Karen F. McAllister; Challenge Period: 75 days for Committee (expires Dec. 27, 2023), 60 days for other parties (expires Dec. 12, 2023)
2 | Court Filing | Filing of Adequate Protection Stipulation between Driftwood, Cascabel, and Ad Hoc Group of First Lien Lenders (Velthorn National Bank, N.A. and Pinnacle Credit Partners Fund II, LP) | § 4.02(b) | Calderwood & Harkness LLP / Hartwell & Crane LLP / Whitfield, Graves & Sato LLP | October 13, 2023 | October 9, 2023 | Complete | Resolves Ad Hoc Group objection filed Sept. 19, 2023; global settlement reached Oct. 6, 2023; enhanced adequate protection: replacement liens, § 507(b) claims, monthly current-pay interest on $88M at SOFR + 425 bps, $3.5M reserve, Hartwell & Crane fees capped at $1.2M
3 | Court Order | Resolution of UCC limited objection — increase Committee Carve-Out share from $500,000 to $750,000 and extend Committee Challenge Period from 60 days to 75 days | § 4.02(b) | Calderwood & Harkness LLP / Breckenridge McCoy LLP (Thomas A. Breckenridge) | October 13, 2023 | October 9, 2023 | Complete | UCC objection filed Oct. 2, 2023; resolved by agreement incorporated in Adequate Protection Stipulation
4 | Roll-Up | Deemed roll-up of $32,000,000 of Driftwood's pre-petition first lien claims into the DIP facility with superpriority administrative expense claim status, pari passu with new money tranche | § 2.04 | Calderwood & Harkness LLP | October 13, 2023 | October 13, 2023 | Complete | Dollar-for-dollar roll-up; Driftwood's pre-petition first lien position: $32M face value (26.67% of $120M total first lien); cost basis: $21,760,000 ($32M × $0.68)
5 | Officer's Certificate | Bring-down Officer's Certificate of Cascabel Financial Holdings, Inc. (Susan K. Nakamura, CFO) confirming continued accuracy of representations and warranties and no Event of Default | § 4.02(c) | Whitfield, Graves & Sato LLP / Susan K. Nakamura | October 13, 2023 | October 13, 2023 | Complete
6 | Budget | Delivery of updated 13-week rolling cash flow budget (updated per 4-week cycle) | § 4.02(d) | Alderpoint Advisory Partners LLC (CRO Terrence M. Kowalski) | October 13, 2023 | October 12, 2023 | Complete | Variance testing: revenue ±10%, disbursements ±15%, tested cumulative bi-weekly
7 | Compliance Certificate | Budget compliance certificate confirming Debtors are within permitted variances for the period since Draw 1 | § 4.02(e) | Alderpoint Advisory Partners LLC / Susan K. Nakamura | October 13, 2023 | October 12, 2023 | Complete
8 | Borrowing Notice | Delivery of borrowing notice for Draw 2 in the amount of $25,000,000 | § 2.02 | Whitfield, Graves & Sato LLP / Susan K. Nakamura | October 13, 2023 | October 13, 2023 | Complete | Total new money funded: $18M + $25M = $43M
9 | No Material Adverse Change | Confirmation that no Material Adverse Change has occurred since the Petition Date | § 4.02(f) | Whitfield, Graves & Sato LLP / Gerald T. Harmon (CEO) | October 13, 2023 | October 13, 2023 | Complete
10 | Adequate Protection Payment | Confirmation of first adequate protection payment to pre-petition first lien lenders ($88M at SOFR + 425 bps; estimated ~9.58% all-in; monthly payment ~$702,133) | § 4.02(g) | Cascabel / Velthorn National Bank, N.A. (as agent) | October 13, 2023 | October 10, 2023 | Complete | Payment covers period from Petition Date through September 30, 2023
11 | Lien Search | Updated UCC and judgment lien searches for Debtors confirming no intervening liens | § 4.02(h) | Calderwood & Harkness LLP (Nathan Ikeda) | October 13, 2023 | October 11, 2023 | Complete
12 | No Challenge | Confirmation that no challenge to pre-petition liens or roll-up has been commenced as of the Final DIP Order date | § 4.02(i) | Calderwood & Harkness LLP | October 13, 2023 | October 13, 2023 | Complete | Challenge Period not yet expired; no challenge filed
[sheet: Court Filings & Orders]
Item No. | Document | Filed / Entered Date | Docket No. | Filing Party | Responsible Attorney | Status | Notes
1 | Voluntary Chapter 11 Petition — Cascabel Financial Holdings, Inc. | September 8, 2023 | Dkt. 1 | Cascabel Financial Holdings, Inc. | Jonathan R. Whitfield (Whitfield, Graves & Sato LLP) | Filed | Jointly administered with Cascabel Asset Management LLC; Ridgeline Community Bank excluded
2 | Voluntary Chapter 11 Petition — Cascabel Asset Management LLC | September 8, 2023 | Dkt. 2 | Cascabel Asset Management LLC | Jonathan R. Whitfield | Filed | SEC-registered investment adviser; managed ~$1.2B in client AUM
3 | Motion for Joint Administration | September 8, 2023 | Dkt. 5 | Debtors | Jonathan R. Whitfield | Filed / Granted | Granted September 8, 2023
4 | First Day Motions (Cash Management, Wages, Utilities, etc.) | September 8, 2023 | Dkt. 6–14 | Debtors | Rachel P. Dumont (Whitfield, Graves & Sato LLP) | Filed / Granted | Interim orders entered September 15, 2023; final orders entered October 13, 2023
5 | Motion for Entry of Interim and Final Orders Authorizing DIP Financing, Granting Priming Liens, and Approving Roll-Up | September 8, 2023 | Dkt. 15 | Debtors | Jonathan R. Whitfield / Colette Whitman (Calderwood & Harkness LLP) | Filed | $75M facility: $43M new money + $32M roll-up; §§ 364(c) and 364(d)
6 | Declaration of Terrence M. Kowalski (CRO) in Support of DIP Motion | September 8, 2023 | Dkt. 16 | Debtors | Jonathan R. Whitfield | Filed | Details need for DIP financing and basis for proposed budget
7 | Declaration of Marcus Ellison (Driftwood CIO) in Support of DIP Motion | September 8, 2023 | Dkt. 17 | Driftwood Absolute Return Fund Ltd. | Colette Whitman (Calderwood & Harkness LLP) | Filed | Details DIP Lender's pre-petition position and DIP terms
8 | Interim DIP Order | September 15, 2023 | Dkt. 48 | Court | Hon. Karen F. McAllister | Entered | Authorizes Draw 1 of $18M; grants interim priming liens; schedules final hearing
9 | Ad Hoc Group Objection to DIP Motion (Priming and Roll-Up) | September 19, 2023 | Dkt. 62 | Ad Hoc Group of First Lien Lenders (Velthorn $38M + Pinnacle $28M = $66M) | Monica L. Hartwell (Hartwell & Crane LLP) | Filed / Resolved | Resolved via Adequate Protection Stipulation
10 | Schedules of Assets and Liabilities | September 22, 2023 | Dkt. 71 | Debtors | Rachel P. Dumont (Whitfield, Graves & Sato LLP) | Filed | Total assets ~$620M; total liabilities ~$710M; negative equity ~($90M)
11 | Notice of Appointment of Official Committee of Unsecured Creditors | September 22, 2023 | Dkt. 73 | U.S. Trustee | — | Filed | Chair: Vendara Technology Solutions, Inc. (owed $3.2M); members include Cornerpoint Consulting Group LLC (owed $1.8M) and three former executives ($2.4M deferred comp)
12 | Application to Retain Breckenridge McCoy LLP as UCC Counsel | September 28, 2023 | Dkt. 82 | Official Committee of Unsecured Creditors | Thomas A. Breckenridge (Breckenridge McCoy LLP) | Filed / Approved | Approved October 13, 2023
13 | UCC Limited Objection to DIP Motion (Carve-Out and Challenge Period) | October 2, 2023 | Dkt. 89 | Official Committee of Unsecured Creditors | Thomas A. Breckenridge (Breckenridge McCoy LLP) | Filed / Resolved | Resolved: Committee Carve-Out increased to $750K; Challenge Period extended to 75 days
14 | Debtors' Reply to Ad Hoc Group Objection and UCC Limited Objection | October 5, 2023 | Dkt. 95 | Debtors | Jonathan R. Whitfield / Rachel P. Dumont | Filed | Filed in advance of final hearing
15 | Adequate Protection Stipulation | October 9, 2023 | Dkt. 102 | Driftwood / Cascabel / Ad Hoc Group | Colette Whitman (Calderwood & Harkness LLP) / Monica L. Hartwell / Jonathan R. Whitfield | Filed | Global settlement reached Oct. 6, 2023; embodies enhanced adequate protection package
16 | Final DIP Order | October 13, 2023 | Dkt. 115 | Court | Hon. Karen F. McAllister | Entered | Authorizes full $43M new money + $32M roll-up; final priming liens; Challenge Period: Committee 75 days (exp. Dec. 27, 2023), others 60 days (exp. Dec. 12, 2023)
17 | Plan and Disclosure Statement (Second Amended Plan of Reorganization) | December 7, 2023 | Dkt. 289 | Debtors | Jonathan R. Whitfield / Rachel P. Dumont | Filed | Filed within 90-day milestone (Day 90 = Dec. 7, 2023)
18 | Order Approving Disclosure Statement | December 22, 2023 | Dkt. 325 | Court | Hon. Karen F. McAllister | Entered | Solicitation period: Dec. 23, 2023 – Jan. 19, 2024
19 | Confirmation Order | January 29, 2024 | Dkt. 412 | Court | Hon. Karen F. McAllister | Entered | Day 143 from Petition Date; within 150-day milestone
20 | Notice of Plan Effective Date | February 16, 2024 | Dkt. 438 | Debtors | Jonathan R. Whitfield | Filed | Day 161 from Petition Date; within 180-day milestone; DIP facility repaid in full
[sheet: Regulatory Notices]
Item No. | Regulator / Recipient | Subject | Date Sent | Sent By | Method | Acknowledgment Received | Status | Notes
1 | Delaware Office of the State Bank Commissioner | Notice of Chapter 11 Filing by Cascabel Financial Holdings, Inc. (parent of Ridgeline Community Bank) | September 12, 2023 | Whitfield, Graves & Sato LLP (Jonathan R. Whitfield) | Sundial Data Systems / Email | September 14, 2023 | Complete | Ridgeline Community Bank excluded from Ch. 11 filing; continues operating under regulatory supervision; state-chartered commercial bank
2 | FDIC | Notice of Chapter 11 Filing and DIP Financing — Cascabel Financial Holdings, Inc. as bank holding company of Ridgeline Community Bank (total deposits ~$385M) | September 12, 2023 | Whitfield, Graves & Sato LLP (Jonathan R. Whitfield) | Sundial Data Systems / Email | September 18, 2023 | Complete | Ridgeline ring-fenced from Chapter 11 case; DIP liens do not attach to Ridgeline assets
3 | SEC (Division of Investment Management) | Notice regarding Cascabel Asset Management LLC Chapter 11 filing — SEC-registered investment adviser managing ~$1.2B in client AUM | September 12, 2023 | Whitfield, Graves & Sato LLP | EDGAR / Email | September 15, 2023 | Complete | CAM is a co-debtor in the Chapter 11 case
4 | Delaware Office of the State Bank Commissioner | Notice of Entry of Final DIP Order and DIP Lien Structure (confirmation that DIP liens exclude Ridgeline Community Bank assets) | October 15, 2023 | Whitfield, Graves & Sato LLP | Sundial Data Systems / Email | October 19, 2023 | Complete
5 | FDIC | Notice of Entry of Final DIP Order | October 15, 2023 | Whitfield, Graves & Sato LLP | Sundial Data Systems / Email | October 22, 2023 | Complete
6 | SEC (Division of Investment Management) | Notice of Entry of Final DIP Order and continued operations of Cascabel Asset Management LLC during Chapter 11 | October 15, 2023 | Whitfield, Graves & Sato LLP | EDGAR / Email | October 23, 2023 | Complete
7 | Delaware Office of the State Bank Commissioner | Notice of Plan Confirmation and Effective Date; continued regulatory status of Ridgeline Community Bank | February 14, 2024 | Whitfield, Graves & Sato LLP | Sundial Data Systems / Email | February 16, 2024 | Complete
8 | FDIC | Notice of Plan Confirmation and Effective Date; continued regulatory status of Ridgeline Community Bank | February 14, 2024 | Whitfield, Graves & Sato LLP | Sundial Data Systems / Email | February 19, 2024 | Complete | Ridgeline Community Bank continues operating post-emergence
[sheet: Adequate Protection Payments]
Item No. | Payment Period | Due Date | Amount Paid | Interest Rate Applied | Principal Base | Paid To | Date Paid | Status | Notes
1 | Sept. 8–30, 2023 (partial month) | October 15, 2023 | $512,911 | ~9.58% (SOFR + 425 bps, assuming 5.33% SOFR) | $88,000,000 | Velthorn National Bank, N.A. (as administrative agent for pre-petition first lien lenders: Velthorn $38M, Pinnacle $28M, Brindoval $22M) | October 10, 2023 | Complete | Prorated for 22 days; paid from operating cash and adequate protection reserve
2 | October 2023 | November 15, 2023 | $702,133 | ~9.58% | $88,000,000 | Velthorn National Bank, N.A. | November 14, 2023 | Complete | Monthly payment = $88M × 9.58% ÷ 12
3 | November 2023 | December 15, 2023 | $702,133 | ~9.58% | $88,000,000 | Velthorn National Bank, N.A. | December 14, 2023 | Complete
4 | December 2023 | January 15, 2024 | $702,133 | ~9.58% | $88,000,000 | Velthorn National Bank, N.A. | January 12, 2024 | Complete
5 | January 2024 | February 15, 2024 | $702,133 | ~9.58% | $88,000,000 | Velthorn National Bank, N.A. | February 14, 2024 | Complete | Final adequate protection payment prior to Plan Effective Date
6 | February 1–16, 2024 (partial month) | At Effective Date | $373,133 | ~9.58% | $88,000,000 | Velthorn National Bank, N.A. | February 16, 2024 | Complete | Prorated for 16 days; paid at Plan Effective Date

[sheet: Cover]

Record

Parties

Dates

Amounts