Equity Holders Say Rotech DIP Loan 'Perverts' Ch. 11 Process

Law360, New York (May 03, 2013, 7:50 PM ET) -- Tension between bankrupt Rotech Healthcare Inc. and a recently formed shareholders committee in the Chapter 11 case continued Thursday as the committee objected to the medical equipment maker’s bid to tap a $30 million post-petition loan.

The statutory committee of equity security holders, formed by the U.S. trustee April 24, claims the debtor-in-possession financing from a group led by Silver Point Finance LLC benefits only that firm and other second-lien noteholders and “impermissibly perverts the Chapter 11 reorganization process.”

“The DIP facility is nothing more than...
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