Vencor amends DIP financing, extends maturity to September.Vencor, based in Louisville Louisville (l  `ēvĭl), city (1990 pop. 269,063), seat of Jefferson co., NW Ky., at the Falls of the Ohio; inc. 1780. , Ky., has agreed with its lenders to amend (the "Amendment") the company's debtor-in-possession financing Debtor-in-possession financingNew debt obtained by a firm during the Chapter 11 bankruptcy process, Federal Bankruptcy Rule 4001 (c)(1). This financing is unique because it is secured, that is, it has priority over existing debt, equity and other claims. (the "DIP Financing") to extend the maturity until Sept. 30, 2000. The Amendment also revises certain covenants and permits Vencor to file its plan of reorganization through July 18, 2000. The company also announced that it has entered into a commitment letter with certain of the DIP lenders to finance an amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and restated debtor-in-possession credit agreement in an aggregate principal amount of $90 million (the "Restated DIP"). The Restated DIP would become effective in the event the company became involved in a legal proceeding against Ventas concerning the transactions in which the company was spun-off from Ventas or the master lease agreements executed in connection with the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. . Such a legal proceeding currently would constitute an event of default under the existing DIP Financing. The Restated DIP would have a one-year term beginning on its effective date. As previously disclosed, the company has reached an understanding with certain of its senior bank lenders, certain holders of the company's $300 million 9 7/8 percent Guaranteed Senior Subordinated Notes due 2005 and the advisors to the official committee of unsecured creditors Unsecured Creditor An individual or institution that lends money without obtaining specified assets as collateral. This poses a higher risk to the creditor because they have nothing to fall back on should the borrower default on the loan. A debenture holder is an unsecured creditor. regarding the broad terms of reorganization. The company has continued to engage in discussions with Ventas to obtain its support for a consensual CONSENSUAL, civil law. This word is applied to designate one species of contract known in the civil laws; these contracts derive their name from the consent of the parties which is required in their formation, as they cannot exist without such consent. 2. plan of reorganization. At this time, only Ventas is in disagreement with the company over the terms of a consensual plan of reorganization. While the filing of a consensual plan of reorganization is the company's preferred outcome, the company believes that it is taking prudent steps in the event a consensual plan of reorganization with Ventas cannot be reached. Vencor and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 with the Court Sept. 13, 1999. |
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