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JASPER, Ind. -- A lifeline was thrown to Buehler Foods, Inc. this week in the form of an approval from a U.S. District Judge to continue tapping into approximately $20 million in cash collateral, according to published reports.
The judge also gave an interim sign-off on a $6 million debtor-in-possession loan, extended by Harris Trust and Savings Bank. This is a follow-up to the court's order Friday that allowed Buehler access to about $2.5 million to keep operating through Monday -- a loan that was extended by Associated Wholesale Grocers Inc., Kansas City, Kan.
However, the cash collateral that Buehler won access to on Tuesday is being used to secure a pre-petition loan extended by Harris Trust and Savings. Although Buehler had spent a good part of last week talking to AWG about DIP financing, on Tuesday the debtor agreed to terms with Harris.
"It was simply a more agreeable arrangement to all the parties, including our creditors," said Jerry Ansel, counsel for the debtor and a lawyer at Indianapolis' Sommer Barnard Attorneys.
Under the federal bankruptcy code, Jasper, Ind.-based Buehler is able to access the collateral and DIP loan for 30 days. A hearing on final approval is scheduled for June 9.
Buehler filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Indiana in Evansville on May 4. The company cited the failure to integrate 16 stores it purchased in October from Winn-Dixie Stores Inc. as the primary reason behind its filing.