Showfields is facing concerns over its bankruptcy financing. The landlord at its Brooklyn store in New York City on Dec. 5 filed an objection to the final approval of its debtor-in-possession financing, Retail Dive reported. The landlord in its filing said the proposed DIP financing transaction is “to be provided by an entity controlled by one or more insiders” at Showfields. A group of funders cited a similar concern in an objection filed at the end of November. The DIP Lender is listed as Showfields Investment LLC, with the loan agreement between the lender and Showfields for an amount of up to $2.5 million. “The motion does not disclose the identity of the insiders of [Showfields] who are members or owners of the DIP Lender,” the landlord’s objection says. “Without transparency, there remains the possibility that the true purpose of the DIP Financing (rather than obtaining financing from a different source) is to allow the DIP Lender to procure a roll-up of the DIP Lender’s prepetition debt, to the detriment of [Showfields’] estates and their creditors.” The landlord’s objection also alleges that Showfields did not “even attempt to satisfy their burden to demonstrate that the proposed DIP Financing” should be approved, such as not providing evidence to justify loan terms including the roll-up of over $1.6 million of the DIP Lender’s prepetition debt.
