Careismatic’s Junior Creditors Object to Bankruptcy Financing

Careismatic Brands LLC’s junior creditors accused the company’s secured lenders of attempting to restrict assets and improperly benefit themselves through a bankruptcy loan arrangement.

The California-based medical apparel company is seeking the final go-ahead from a judge to access a $125 million bankruptcy loan after receiving temporary approval to make initial draws on the financing in January. The company’s unsecured creditors’ committee alleged that the loan will “prove ruinous” because the terms of the deal will shield the company’s value from junior creditors and protect lenders from potential liability stemming from pre-bankruptcy transactions, according to an objection filed Feb. 23 ...