Bankrupt Retail Supplier Would Undergo Sale Process Under Proposed DIP Financing

Liberty Power Holdings, LLC (the 'Debtor' or 'Liberty') sought bankruptcy court approval to obtain DIP Financing from Boston Energy Trading and Marketing, LLC (BETM) or its designee or assignee (DIP Lender) in an amount equal to $4,000,000 on an interim basis, and thereafter in an amount up to $40,000,000 (inclusive of any interest or fees), in each case to fund the payment of those obligations set forth in a certain 13-week budget filed with the court

BETM had been a lender (credit / wholesale supplier) to Liberty Power Holdings prior to Debtor's bankruptcy petition. As of the Petition Date, the Debtor was indebted to BETM in the amount of $121 million

As a further condition to the provision of DIP Financing by the DIP Lender and as adequate protection for the use of BETM’s Cash Collateral, the DIP Lender proposes to require that the Debtor implement and proceed with a sale process for the marketing and sale of the Debtor’s business and assets as a going concern.

In connection therewith, the DIP Lender has established and sought court approval for the following sale milestones by the dates set forth below. For avoidance of doubt, under the proposed agreement, the failure of the Debtor to comply with any of the Milestones would constitute an immediate Event of Default under the DIP Documents and the Interim Order and permit DIP Lender to exercise the rights and remedies provided for in the Interim Order and the DIP Documents

a. On or before May 18, 2021, the Debtor shall have filed a motion seeking approval of sale and bidding procedures for the sale of substantially all the Debtor’s assets (the 'Bidding Procedures Motion') in the Bankruptcy Court;

b. On or before June 4, 2021, the Bankruptcy Court shall have entered an order granting the Bidding Procedures Motion, in form reasonably acceptable to the DIP Lender (the 'Bidding Procedures Order');

c. No later than fifteen (15) calendar days after entry of the Bidding Procedures Order, Debtor shall deliver a draft confidential information memorandum (the 'CIM') to DIP Lender along with a proposed draft purchase agreement for the sale;

d. No later than forty-five (45) calendar days after entry of the Bidding Procedures Order, Debtor shall deliver a final version of the CIM and a final version of the draft purchase agreement (together with the related disclosure schedules) to prospective purchasers, including those prospective purchasers that Debtor believes in good faith could submit a binding bid, and such final version of the CIM, together with a list of such prospective purchasers, shall be delivered to DIP Lender;

e. On or before August 16, 2021, the Bid Deadline (as defined in the Bidding Procedures Order) shall have occurred;

f. On or before August 19, 2021, the Debtor, in consultation with the DIP Lender, will select a bid that it believes represents the highest and best offer for the sale received by the Bid Deadline;

g. On or before August 20, 2021, the Debtor shall have commenced the Auction (as defined in the Bidding Procedures Order), if necessary;

h. On or before August 26, 2021, a hearing shall have occurred in the Bankruptcy Court to consider approval of the sale contemplated by the Bidding Procedures Order;

i. On or before August 31, 2021, the Bankruptcy Court shall have entered the Sale Order (as defined in the Bidding Procedures Order).

Liberty Power Holdings said, "Given the urgent and immediate circumstances surrounding the filing of this Chapter 11 case, the amount and unique nature of the financing and credit support provided by BETM to the Debtor prior to the Petition Date, the financial support provided by BETM to the ISOs of the Debtor’s obligations, and the liens held by BETM on all of the Debtor’s assets (including Cash Collateral), the Debtor concluded in the exercise of its business judgment that it would not be possible or feasible to solicit, obtain and implement any other source of proposed debtor-in-possession financing. As a result, the Debtor believes that BETM is the only feasible source of debtor-in-possession financing."

"If the DIP Financing proposed herein is not approved, then the Debtor and all stakeholders will face the unfortunate prospect of ceasing its operations, terminating its workforce and losing all of its customers and going concern value," Liberty Power Holdings told the court

The DIP Financing Fees include the following:

Supply Fee: $1.00/MWh, provided that non-standard transactions will be assessed an additional 5% of the notional amount.

Sleeve Fee: $0.25 per MWh

Credit Support Fee: For non-ISO collateral postings, the higher of (a) SOFR [Secured Overnight Financing Rate] plus 1200 basis points or (b) 12% per annum