The U.S. Trustee further noted that the Bankruptcy Code only permits super-priority status under limited circumstances. Specifically, it is reserved for debtor-in-possession lenders and secured lenders who require adequate protection if the value of their collateral diminishes. The trustee argued that the expense reimbursements related to the sale do not fall within these categories and therefore should not be eligible for super-priority administrative claim status under the Bankruptcy Code.
The Office of the U.S. Trustee declined to comment further on the matter. Counsel for First Mode, including Ray C. Schrock, Annemarie V. Reilly, Brian S. Rosen, Caroline Reckler, and Jeffrey T. Mispagel of Latham & Watkins LLP, and Michael R. Nestor, Kara Hammond Coyle, and Joseph M. Mulvihill of Young Conaway Stargatt & Taylor LLP, did not immediately respond to requests for comment.
The case is In re: First Mode Holdings Inc. et al., case number 1:24-bk-12794, in the U.S. Bankruptcy Court for the District of Delaware.
