Bankruptcy Judge Michael E. Wiles has granted Scout Media interim use of its debtor-in-possession loan, allowing the network of college basketball and football websites to keep operating as it markets itself for sale, TheStreet.com reported yesterday. Scout had failed to immediately win approval of the then-$6.2 million loan from Judge Wiles when the debtor first presented it to him on Dec. 12 in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan. Judge Wiles took issue with provisions that would have given pre-petition lender Multiplier Capital a contingency fee if Scout's unsecured creditors recovered most of their claims and allowed Scout to use the loan to pay off part of its pre-petition obligations to Multiplier, replacing that debt with new, higher priority debt through what is called a gradual rollup. The loan as approved yesterday, now has a $4.35 million borrowing cap and no longer contains the contingency fee or the mechanism for gradually rolling up prepetition debt. It carries a 13 percent interest rate and matures on Feb. 6 — the deadline by which Scout must consummate a sale of its assets.
