SGI receives court approval
Silicon Graphics has received interim approval to use its $70 million financing facility provided by a group of its bondholders.
This credit facility will fund day-to-day business operations including employee salaries, benefits, supplier payments, and other operating expenses during the reorganization process.
The Company intends to make timely payment for goods and services provided on or after the filing date in the normal course of business and in accordance with terms of existing supplier agreements.
In addition, the Court granted approval at the hearing yesterday for a number of other “first-day” motions to support the Company’s employees and suppliers as well as customers and other stakeholders. These orders enable SGI’s business to continue without disruption. Among the motions granted, SGI received approval to: Continue to pay employee wages and provide healthcare and other similar benefits; Pay suppliers for goods and services provided after the filing; and Maintain uninterrupted delivery of products and services to its customers.
“We are pleased with the approval of our ‘first-day motions’ by the Bankruptcy Court,” said Dennis McKenna, chairman and chief executive officer. “This approval will enable SGI to operate globally and meet normal business obligations.”
On Monday, May 8, SGI and its domestic U.S. subsidiaries filed voluntary petitions for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. SGI’s non-U.S. subsidiaries were not included in the filing and will continue their business operations without supervision from the U.S. courts.