Pacific Capital Funding Group - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• The borrowers and lenders are the 13 debtors themselves, which lend to one another so that each is both a potential borrower and a potential lender: Pacific Capital Funding Group, Inc., Pacific Private Money, Inc., Private Money Management Group LLC, Pacific Mortgage Capital LLC, Pacific Southwest Note Fund LLC, Pacific Private Money Partners LLC, Pacific Private Money Group LLC, Pacific Private Money Fund LLC, Pacific Opportunity Fund LLC, Pacific Note Fund Management Group LLC, Pacific Freedom Fund LLC, Arrival Home Loans, LLC, and Arrival Fund I, LLC.

Agent / Lender(s)

• There is no third-party lender or agent; the debtors that advance funds (the lending debtors) lend to the debtors that consume them, and the interim order gives the lending debtors section 364(e) good-faith protection.

DIP Commitments

• Size: up to $200,000 in aggregate principal amount of postpetition interdebtor lending and other financial accommodations, authorized on an interim basis for the interim period running through and including the date of the final hearing, subject to any final order.
• The financing is unsecured and carries no roll-up; the lending debtors receive administrative claims rather than liens, and the order expressly makes no finding that any alleged lien is valid, senior, enforceable, prior, perfected or non-avoidable, and preserves every party in interest's right to challenge the validity, priority, enforceability, seniority, avoidability, perfection or extent of any alleged lien.
• The debtors may borrow and obtain advances up to that amount during the interim period without further court order, subject to the budget, and are authorized to execute and record loan documents and pay fees necessary to perform.
• The obligations are valid and binding against the debtors, their estates and any successors, including a trustee in the Chapter 11 cases or in any converted Chapter 7 cases, and are not subject to stay, avoidance, defense, reduction, subordination, setoff, recoupment or counterclaim.
• The debtors are no longer operating their business but continue to manage their properties and assets; the court found the interdebtor loans necessary to preserve asset value, without which the debtors would be forced to liquidate and lose the prospect of a value-maximizing sale, and found that the loans came out of a competitive process run by the debtors and that no financing was available elsewhere on more favorable terms.

Interest Rate

• Unpriced: the interim order contemplates accrued interest without setting a rate, providing that repayment of a net interdebtor payable counts as repayment of principal and, as applicable, accrued interest, and that the post-true-up ledger balances govern repayment subject to applicable accrued interest.

Maturity, Repayment and True-Up

• Repayment runs through an allocation and true-up mechanic rather than a stated maturity date. The source of the cash used to fund the cases determines which debtor initially advances funds but does not by itself determine ultimate economic responsibility for repayment; that is fixed only after the allocation and periodic true-up procedures run.
• Administrative expenses are allocated in two ways:
  • Direct costs — an expense reasonably identifiable as incurred solely for the benefit of, or directly attributable to, a particular debtor or its assets is allocated to that debtor.
  • Shared case costs — expenses not reasonably attributable to a particular debtor are allocated by relative asset value (each debtor's Allocation Percentage), measuring each debtor's value as its cash plus the estimated net orderly liquidation value of its remaining assets, determined by the debtors in good faith on information reasonably available as of the measurement date; interdebtor receivables and payables are excluded to avoid circularity.
• Monthly review: at each calendar month end the debtors update each debtor's cash and estimated net orderly liquidation value, the direct and shared case costs incurred, the resulting Allocation Percentage, and the resulting repayment obligations. Asset values need not be independently reappraised monthly but must be adjusted in good faith for material developments affecting realizable value, including asset sales, binding bids or purchase agreements, material changes in collateral value and foreclosures.
• Ledger: the debtors maintain a ledger showing, per debtor, amounts actually advanced to fund the cases, direct costs allocated, shared case costs allocated at the applicable Allocation Percentage, repayments made or received, and the resulting net receivable or payable. A debtor that funded more than the costs ultimately allocated to it holds an interdebtor loan receivable; a debtor that funded less owes an interdebtor loan payable.
• True-up and repayment: the ledger is formally reconciled at least quarterly and, in addition, within 30 days after any debtor receives cumulative net asset-sale proceeds exceeding $2 million since the last true-up, and in all events before any material distribution of those proceeds to creditors or interest holders. Following each true-up, and subject to retaining liquidity reasonably necessary to fund the approved budget and preserve the estate, a debtor with a net payable repays it from available cash, including sale or monetization proceeds; where more than one lending debtor holds a net receivable, repayments are allocated pro rata by outstanding net receivable unless the affected debtors and the committee agree otherwise or the court orders otherwise.
• Once a debtor satisfies its then-outstanding net payable, its remaining proceeds stay with it and need not be paid over to another debtor merely because that other debtor previously funded the cases, subject to later allocation and true-up.
• Final true-up: performed as of the effective date of any confirmed plan, immediately prior to any conversion to Chapter 7, or at such other time as the court orders; the resulting net receivables and payables are booked on the respective debtors' records as the then-outstanding repayment obligations, subject to further court order or plan treatment.
• Reservation of rights: the methodology is an interim mechanism and is not a determination on substantive consolidation, asset ownership, the ultimate allocation of administrative expenses under a plan, or the allowance, priority, characterization or treatment of any other intercompany claim, with the rights of the debtors, the committee and other parties in interest reserved.

Use of Proceeds

• Proceeds may be used up to the $200,000 cap solely to pay fees, costs and expenses authorized by the interim order and to fund working capital needs itemized in the budget.

Securities and Priorities

• The lending debtors are granted an allowed administrative expense claim for all obligations under section 364(b), effective as of the June 16, 2026 petition date upon entry of the interim order; the claim carries no liens and no superpriority over other administrative expenses.
• The claim is treated as a section 503(b) administrative expense for purposes of section 1129(a)(9)(A) and is payable from, and has recourse to, all pre- and postpetition property and assets of the debtors.
• The claim is enforceable against the debtors, their estates, any trustee or other estate representative in the Chapter 11 cases or any successor cases, and upon dismissal, and is not subject to sections 510, 549, 550 or 551.
• The financing and the associated administrative claim obligations do not affect, impair or diminish any secured claim allowed against any debtor.
• The obligations are not discharged by confirmation notwithstanding section 1141(d) unless indefeasibly paid in full in cash on or before the plan effective date or the lender agrees otherwise in writing, and the order's terms survive confirmation, conversion, dismissal, withdrawal of the reference or abstention until the obligations are paid in full in cash.
• The lending debtors need not file proofs of claim for claims allowed under the order, may do so at their discretion notwithstanding any bar date, and are not bound by any bar date order, including as to administrative claims.

Waivers

• The order is effective immediately upon entry.
• The lending debtors are protected by non-waiver and reservation-of-rights provisions, and any waiver or amendment of a party's rights must be in a signed writing.
• The order creates no third-party rights and controls over the motion, any other order and any other agreement, except where it expressly points to the loan documents.

Permitted Variance

• Aggregate variances of 10% from the budget are permitted.

Key Dates

• Petition date: June 16, 2026.
• Committee appointment: July 8, 2026, when the U.S. Trustee appointed the official committee of unsecured creditors, which responded to the motion.
• Motion dated: Aug. 19, 2026 (dkt. no. 112).
• Interim hearing: Sept. 8, 2026; the interim order was entered Sept. 23, 2026, granting the motion on an interim basis and overruling any unresolved objections without prejudice to timely objections at the final hearing.
• Final hearing: Sept. 23, 2026 at 10:30 a.m., the same day the interim order was entered.