The ruling comes despite findings by the court that (i) the price and terms of the revised DIP credit agreement, including the tranche A DIP facility and the tranche C DIP facility, were “entirely fair,” (ii) there were grounds under section 364(c) of the Bankruptcy Code to authorize the debtors to enter into the DIP credit agreement and (iii) the DIP lenders were entitled to a good faith finding under section 364(e) of the Bankruptcy Code. declined to approve LATAM Airlines’ proposed DIP facility, concluding that the facility’s equity subscription election gives rise to improper sub rosa plan treatment of the tranche C DIP lenders and debtors’ equity holders. In a 142-page opinion issued this afternoon, Judge James Garrity Jr.
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