Court caps interim insider DIP borrowing at $300,000
The court authorized CashCall to borrow up to $300,000 on an interim basis, sharply below the $1.3 million interim draw requested under a proposed $3.995 million facility from Absolutely Zero Corporation. The lender is owned by J. Paul Reddam, CashCall’s sole shareholder, and would receive estate-wide liens and superpriority status under the DIP financing motion. The court minutes set a final hearing for August 26, with objections due August 12 and replies due August 19.
The limited authorization follows opposition from both the U.S. Trustee and CFPB. The U.S. Trustee’s objection challenged the insider process, professional-fee-heavy budget and proposed lien on estate causes of action, while the CFPB’s opposition argued that a nonoperating debtor with no employees had not established an emergency need for nearly $4 million. The court also approved cash management only on an interim basis, granted the schedules extension, and deferred lease rejection to August 26. Immediate liquidity is therefore constrained, and the insider facility’s broader economics remain contested.