DIP Financing: A Crucial Step in the Bankruptcy Process
As part of the restructuring, Mitel’s lenders have agreed to provide a total of $122 million in DIP financing, consisting of:
- $60 million in new funds to support ongoing operations.
- A rollup of prepetition debt, ensuring continued liquidity.
Judge Lopez approved the interim DIP financing, emphasizing that his ruling was case-specific, given the broad agreement among stakeholders. However, he cautioned attorneys against citing this approval as precedent for future DIP requests.
“I just think this is a comprehensive deal,” Lopez remarked, signaling confidence in the proposed restructuring.
The court has scheduled a final hearing on the Chapter 11 plan for April 23, where the fate of Mitel’s long-term financial recovery will be determined.
Litigation and Unsecured Claims
As part of the deal, the restructuring plan resolves state court litigation stemming from a 2022 out-of-court debt restructuring. Importantly, general unsecured creditors will remain unaffected, offering some stability to Mitel’s broader business relationships.
With a clear path to financial recovery, Mitel aims to emerge from Chapter 11 leaner and more competitive, positioning itself for a new era in business communications technology.
