TIG Reaper - Chapter 11 DIP Terms

DIP Terms

Background

• The debtors operate seven franchised Dave's Hot Chicken restaurants at leased sites in Pennsylvania, Delaware and New Jersey and have three more in late stages of development, one in New Jersey and two in Delaware; they hold leases at all ten locations and franchise agreements with Dave's Hot Chicken Franchise Co., LLC for each restaurant.
• The four debtors filed separate Chapter 11 petitions on Sept. 21, 2026 in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania, with TIG Reaper LLC as lead debtor. They filed the financing motion on Sept. 24, 2026, seeking interim and final orders; the terms below are as proposed in the motion.
• The debtors state the facility is needed to cover cash shortfalls as the three development-stage restaurants open, to meet payroll and to fund operating deficiencies at the restaurant level, and that without it they cannot pay employees, vendors and other constituencies, suppliers will be unable to ship to their locations, and they will likely fall into violation of lease and other obligations.

Key Dates

• Petition date: Sept. 21, 2026
• Cash collateral order entered: Sept. 24, 2026 [D.I. 37]
• Hearing on the financing motion: Oct. 2, 2026, with a 13-week cash flow forecast to be distributed to interested parties in advance

DIP Commitments

• $200,000 junior-lien term loan facility; the debtors may borrow up to but no more than $200,000 and may elect not to draw the full amount, and they state that no more than $200,000 is required to cover cash shortfalls as the three restaurants in development open.
• The facility carries no cross-collateralization and no roll-up of prepetition debt.
• The debtors did not seek alternative financing; they state that, with no significant unencumbered assets, they cannot obtain unsecured or administrative-priority credit, or credit on any basis more favorable than the facility.

Borrower(s) / Guarantor(s)

• The borrowers are TIG Reaper LLC, a Delaware limited liability company, and Reaper Time PA 1 LLC, Reaper Time PA 2 LLC and Reaper Time NJ 1 LLC, Pennsylvania and New Jersey limited liability companies majority owned by TIG Reaper.

Lender

• Jiger Patel, an insider of the debtors who submitted the first day declaration supporting the motion (Docket No. 2) and holds prepetition claims against the debtors.

Interest Rate

• Rate: Prime rate
• Payments are interest only through the maturity date.

Maturity

• Repayment of the facility is due upon a sale of the debtors' assets or confirmation of the debtors' plan of reorganization.

Carve Out

• The only carve-outs are for Clerk of Court costs and fees payable to the Office of the United States Trustee.
• There is no carve-out for the debtors' or other professionals.

Use of Proceeds

• Operating and store opening expenses, including payroll and restaurant-level operating deficiencies
• Day-to-day costs of maintaining vendor and supplier relationships, purchasing new inventory and otherwise financing operations
• Completing construction and lease negotiations at several pending locations
• Backfilling deficiencies in the 13-week cash flow forecast

Securities and Priorities

• The motion asks that the DIP lender receive non-avoidable, automatically perfected junior liens under section 364(c)(3), effective on entry of the interim order without execution or recordation of mortgages or security agreements, with the consent of the prepetition secured party.
• Collateral consists of all real and personal property of the debtors of every kind, whether now owned or hereafter acquired, whether owned, consigned or leased and regardless of location, together with the proceeds thereof and all post-petition property; the liens attach whether or not the property is already encumbered by prepetition liens of the prepetition secured party or any other party.
• The facility is junior to Bank of Midwest's liens. The motion calls the DIP liens second-priority security interests but elsewhere makes them junior to prepetition liens of any party, a conflict that matters for the merchant cash advance lenders whose receivables liens rank behind Bank of Midwest.
• Except as the motion otherwise provides, the DIP liens may not be made subject to or pari passu with any lien granted in the cases, and remain valid and enforceable against any trustee appointed in the cases, on conversion to Chapter 7 and on dismissal of the cases or any successor cases.
• The debtors are expressly prohibited from conveying, pledging, encumbering, selling, leasing, licensing, assigning, transferring or otherwise disposing of receivables related to or associated with the DIP collateral.
• Upon entry of a final order granting such relief, any provision of a license, contract or other agreement conditioning the debtors' pledge, grant, sale, assignment or transfer of that agreement or its proceeds on counterparty consent or on payment of fees or obligations to a governmental entity is deemed inconsistent with the Bankruptcy Code and of no force and effect as against the liens granted to the DIP lender.
• The motion's title requests superpriority administrative expense status and its opening paragraph cites section 364(c)(1), but the terms the motion describes provide only junior liens under section 364(c)(3) and no superpriority claim; its jurisdictional paragraph lists only section 364(c)(2) among the statutory predicates.

Avoidance Actions

• No lien or interest avoided and preserved for the benefit of the estate under section 551 with respect to the DIP collateral may be pari passu with or senior to the DIP liens.

Waivers

• The DIP liens are not subject to sections 510, 549 or 550, or to surcharge under section 506(c).
• The debtors give no waivers as to their prepetition obligations to the DIP lender, and the motion states there are no limits on the court's power or the debtors' fiduciary duties.

Cash Collateral and Budget

• The court entered an order approving the use of cash collateral on Sept. 24, 2026, containing certain stipulations and agreements [D.I. 37].
• The debtors prepared a budget with their initial cash collateral request and revised it in the cash collateral order entered at D.I. 37; they will distribute a 13-week cash flow forecast to interested parties before the Oct. 2, 2026 hearing, and the loan is meant to backfill any cash flow deficiencies in that forecast.
• Any committee and any party in interest retain the right to object to entry of a final order or to any further post-petition financing.

Prepetition Capital Structure

• The debtors aver that Bank of Midwest holds a first lien on most assets.
• The debtors are party to merchant cash advance security agreements junior to Bank of Midwest:
  • Parafin, Inc., dated January 2026, roughly $105,000, allegedly secured by future receivables
  • Mint Funding, Inc., dated March 13, 2026, roughly $150,000, also secured by alleged future receivables
  • Rewards Network, dated Jan. 15, 2026, roughly $50,000
• Allegiance Funding Group holds a secured equipment lease with respect to Reaper Time NJ 1, LLC.
• The debtors also received funding from private individuals.