In re Michael Day Enterprises, Inc.
United States Bankruptcy Court for the Northern District of Ohio
2009 WL 7195491 (2009)
Michael Day Enterprises, Inc. (Day) filed for chapter 11 reorganization and continued operating as a debtor in possession. KeyBank National Association (KeyBank), one of Day's pre-petition unsecured lenders, was willing to extend new post-petition financing, but only if its existing unsecured pre-petition debt could be rolled into the new secured post-petition loan. Day petitioned for authority to obtain the financing on those terms under § 364 of the Bankruptcy Code, representing that no other post-petition financing was available.
Whether, under the Bankruptcy Code, pre-petition debt held by an unsecured lender may be rolled up into new post-petition secured debt granted by that same lender.