The U.S. Bankruptcy Court for the District of Delaware has approved, on an interim basis, a request from NationsRent Inc. for immediate access to $20 million of its $55 million debtor-in-possession (DIP) financing provided by a syndicate of lenders led by Fleet Bank to fund normal operations. The money will be used to pay employees? salaries and benefits without interruption. The court set Jan. 18, 2002, as the date for a hearing on final approval.
NationsRent, headquartered in Fort Lauderdale, Fla., rents heavy construction equipment to contractors. The company voluntarily filed a petition for Chapter 11 bankruptcy protection on Dec. 17 to restructure its debt. The company is continuing to pay all employees and provide health and other benefits as usual.
The company also announced the resignation of James L. Kirk, its chairman and chief executive officer.
NationsRent?s stores, field operations and field support services continue with business as usual. Obligations to the company?s vendors, employees and others incurred after the filing will be honored without the need for court approval and will receive priority status.
The $55 million in DIP financing will enable the company to continue normal operations while moving through the reorganization process, including restructuring its balance sheet.
"This financial restructuring of the company?s debt is a prudent, strategic step NationsRent is taking to preserve and strengthen our business," said Ezra Shashoua, executive vice president and chief financial officer, in a statement. "This allows us to run the business in a normal manner, while we address our balance sheet issues to ensure that NationsRent has a sound financial foundation to build on for the future."