Ideanomics Inc, a technology company focusing on electric vehicles (EV), today (5 December) obtained interim approval to access a portion of its debtor-in-possession (DIP) financing from prepetition lender Tillou Management and Consulting.

The company filed for bankruptcy on Wednesday (4 December) in order to pursue a sale of substantially all of its assets backed by a stalking horse bid from Tillou, in addition to its DIP financing. The total DIP, upon final approval, includes USD 11.6m in new money and USD 18.9m in rolled-up prepetition obligations.

In total, Ideanomics has about USD 31m in secured claims, including under promissory notes with stalking horse and DIP lender Tillou.

Tillou has offered to credit bid the full amount of its secured debt and serve as the stalking horse to buy the majority of the company’s assets, with some exceptions, subject to a finalized asset purchase agreement. During the case, there will be a sale process, and the stalking horse offer will be subject to higher and better bids under section 363 of the Bankruptcy Code.

Today’s hearing went forward without much opposition. Judge Craig Goldblatt of the US Bankruptcy Court for the District of Delaware quickly approved several first day operational motions, including authorizing the company to pay prepetition wages and continue using its cash management system.

As for the DIP motion, debtor counsel John Simon of Foley & Lardner said the contemplated roll-up is “very market” in the company’s view. Further, he said, it is evident that Ideanomics requires the funding as it has very little cash. Simon asserted that the only alternative path forward would be a Chapter 7 liquidation.

There were two issues raised by the US Trustee’s office on the DIP financing. US Trustee attorney Joseph Cudia said he was not raising the first issue – a truncated challenge period – as an objection today, as it does not apply on interim approval. The second issue applied to language that, as currently worded, could mean that the DIP lender could begin taking remedies without interested parties having a chance to be heard. The debtors agreed to revise the language, which will be reflected in an order entered under certification of counsel, which Judge Goldblatt will sign.

A second day hearing will be held on 7 January, which was later than the debtors initially requested. Judge Goldblatt, as well as the US Trustee, wanted a little more time as it is difficult to appoint an unsecured creditors committee during the holidays and get them up to speed.