U.S. Trustee Objects To Silicon Graphic's DIP Loan

Law360, New York (May 25, 2006, 12:00 AM EDT) -- Though Silicon Graphics Inc. only just filed for bankruptcy at the start of May, the graphics display maker has already run into some trouble. The trustee in the case is asking a federal judge to deny final approval of a requested $23 million debtor-in-possession loan.

The trustee, Lisa L. Lambert, has raised questions about a provision of the DIP loan that allows the lenders to obtain a security interest in avoidance actions.

Because Silicon won an extension to file a financial affairs statement, Lambert argued that...
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