Destination Maternity Creditors Balk At Lender Protections

Law360 (November 8, 2019, 8:19 PM EST) -- The official committee of unsecured creditors in the Chapter 11 case of retailer Destination Maternity objected Friday to the debtor’s use of lenders’ cash collateral, saying the proposed final order provides broad protections to the lenders to the detriment of the unsecured creditors.

In the objection filed Friday in Delaware bankruptcy court, the committee makes clear it is not opposed to Destination Maternity Corp.’s use of its lenders’ cash to help fund its case, but it said certain provisions give the secured lenders inordinate financial protections given their role in the case.

Specifically, the committee said the cash collateral order and...

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