2025-08-29 DIP Financing - Motion to Amend DIP Credit Agr, Execute Supp Deed of Trust, Grant ReliefCase 24-11647-MFW Doc 653 Filed 08/29/25 Page 1 of 17
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SILVERROCK DEVELOPMENT COMPANY,
LLC, et al.,
Debtors.l
Chapter 11
Case No.: 24-11647 (MFW)
(Jointly Administered)
Hearing Date: September 24, 2025 at 10:30 a.m. (ET)
Obj. Deadline: September 23, 2025 at 4:00 p.m. (ET)
DEBTORS' MOTION FOR ENTRY OF AN ORDER (I) AUTHORIZING THE
DEBTORS' ENTRY INTO AMENDMENT TO THE DIP CREDIT AGREEMENT;
(II) AUTHORIZING THE DEBTORS TO EXECUTE AND DELIVER THE
SUPPLEMENTAL DEED OF TRUST; AND (II) GRANTING RELATED RELIEF
The debtors and debtors in possession (each, a "Debtor" and collectively, the "Debtors"),
in the above -captioned chapter 11 cases, by and through their undersigned counsel, hereby submit
this motion (this "Motion")2 for entry of an order (the "Proposed Order"), substantially in the form
attached hereto as Exhibit A, (i) authorizing but not directing the Debtors to enter into that certain
amendment (the "DIP Amendment") to the DIP Credit Agreement (as defined herein);
(ii) authorizing the Debtors to execute and deliver a Supplemental Deed of Trust (as defined
herein); and (iii) granting related relief. In support of this Motion, the Debtors submit the
declaration of Christopher S. Sontchi, the Debtors' independent manager [Docket No. 623]
(the "Sontchi Declaration"), filed August 15, 2025, and incorporated herein by reference. In
further support of the Motion, the Debtors respectfully represent as follows:
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification
number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996),
SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences,
LLC (6598) and SilverRock Phase I, LLC (2247). The location of the Debtors' principal place of business and
the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101.
2 Except as otherwise set forth herein, capitalized terms used herein but not otherwise defined shall have the meaning
ascribed to such terms in the Final DIP Order and the DIP Credit Agreement or the Sale Motion (each as defined
herein), as applicable.
Case 24-11647-MFW Doc 653 Filed 08/29/25 Page 2 of 17
JURISDICTION AND VENUE
1. The United States Bankruptcy Court for the District of Delaware (the "Court") has
jurisdiction to consider this Motion under 28 U.S.C. §§ 157 and 1334 and the Amended Standing
Order of Reference from the United States District Court for the District of Delaware, dated
February 29, 2012.
2. Pursuant to rule 9013-1(0 of the Local Rules of the United States Bankruptcy Court
for the District of Delaware (the "Local Rules"), the Debtors confirm their consent to the entry of
a final order by the Court in connection with this Motion to the extent that it is later determined
that the Court, absent consent of the parties, cannot enter final orders or judgments in connection
herewith consistent with Article III of the United States Constitution.
3. This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue of these chapter
11 cases and this Application in this district is proper under 28 U.S.C. §§ 1408 and 1409.
4. The bases for the relief requested herein are sections 105(a), 361, 363 and 364 of
chapter 11 of title 11 of the United States Code, as amended (the "Bankruptcy Code"), rules 2002,
4001, 6004 and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and
Local Rule 4001-2.
BACKGROUND
I. General Background
5. On August 5, 2024 (the "Petition Date"), each Debtor filed a voluntary petition for
relief pursuant to chapter 11 of the Bankruptcy Code. The Debtors managing their properties as
debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. These
chapter 11 cases are being jointly administered for procedural purposes only pursuant to
Bankruptcy Rule 1015(b). No official committee of unsecured creditors has been appointed in
these cases.
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6. The factual background regarding the Debtors, including their business operations,
capital and debt structure, and the events leading to the filing of these chapter I 1 cases, is set forth
in more detail in the Declaration of Robert S. Green, Jr. in Support of the Debtors' Chapter I
Petitions and First Day Pleadings [Docket No. 13] (the "First Day Declaration"). As set forth in
the First Day Declaration, the Debtors' business operations centered around the real estate
development of a 525-acre master planned community in the City of La Quinta, California
(the "Project"), now known as "Talus."
II. The DIP Motion and Order
7. On August 29, 2025, the Debtors filed the Motion of Debtors Pursuant to Sections
105, 361, 362,363, 364, and 507 of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Rule
4001-2, for Interim and Final Orders (I) Authorizing Debtors to Obtain Postpetition Financing
from the City Of La Quinta; (II) Granting Non -Priming DIP Lender Liens and Super -Priority
Claims; (III) Scheduling a Final Hearing; and (IV) Granting Related Relief [Docket No. 125]
(the "DIP Motion").
8. On each of October 1, 18, and 31, 2024, and December 6, 2024 the Court granted
certain relief sought in the DIP Motion on an interim basis [Docket Nos. 162, 188, 208 & 243,
respectively] (collectively, the "Interim DIP Orders"). Through the Interim DIP Orders, the
Debtors obtained interim funding in the amount of $2,690,965.00 (the "Interim Funding") pursuant
to a term sheet (the "Interim DIP Term Sheet") entered into between the Debtors and the City of
La Quinta, California (the "Liff'or the "DIP Lender"). The City provided the Interim Funding
under the Interim Term Sheet without priming any of the Project's existing secured creditors. The
Interim Funding allowed the Debtors to stabilize the Project, pay administrative expenses in
connection with the Chapter 11 cases, appoint the Independent Manager, and begin discussions
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with major stakeholders regarding a consensual process forward. The Interim Funding did not,
however, provide the necessary funding to complete a fulsome sale process for the Debtors' assets
for the benefit of the Debtors, their estates, and their stakeholders. Following the appointment of
the Independent Manager, the Debtors continued to assess their need for additional postpetition
financing.
9. After a diligent search for available financing, including discussions with existing
creditors, the best available alternative for post -petition financing was presented by the City. On
December 12, 2024, the Debtors filed the Motion of Debtors Pursuant to Sections 105, 361,
362,363, 364, and 507 of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Rule 4001-2,
for an Order (I) Authorizing Debtors to Obtain Postpetition Financing, (II) Granting DIP Lender
Priming Liens and Super -Priority Claims; and (III) Granting Related Relief [Docket No. 246]
which was approved by the Court on January 23, 2025 [Docket No. 330] (as amended, the "Final
DIP Order"). The Final DIP Order authorized the Debtors to, among other things:
a. obtain senior secured postpetition financing in an aggregate principal amount
not to exceed $11,000,000.00 (the "DIP Credit Facility"), pursuant to the terms
and conditions of the Term Sheet, including the Memorandum of
Understanding (collectively, the "DIP Term Sheet"), the DIP Documents
(defined below), and the Final DIP Order;
b. enter into (a) the executed DIP Term Sheet, substantially in the form attached
as Exhibit 1 to the Final DIP Order, by and among the Debtors and the DIP
Lender and (b) the documents necessary and appropriate pursuant to the Term
Sheet and the DIP Credit Facility (the "DIP Documents")
c. borrow, pursuant to the DIP Documents and the Final DIP Order, postpetition
financing in an aggregate principal amount of up to $11,000,000.00;
d. execute and deliver the DIP Term Sheet and the other DIP Documents to the
DIP Lender;
e. grant to the DIP Lender the DIP Liens on all of the DIP Collateral, senior to any
and all liens on the DIP Collateral to secure the DIP Credit Facility and all
obligations owing and outstanding thereunder and under the DIP Documents,
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as applicable, and this Order, as applicable (collectively, the "DIP
Obli atg ions");
f. grant to the DIP Lender allowed superpriority administrative expense claims in
the Chapter 11 cases for the DIP Credit Facility and all DIP Obligations; and
g. use the proceeds of the DIP Credit Facility in accordance with the DIP Term
Sheet and the Budget, a copy of which Budget is attached as Exhibit 2 to the
Final DIP Order.
10. On January 23, 2025, the Debtors and the City entered into that certain Debtor -in -
Possession Credit Facility Loan and Security Agreement (the "DIP Credit Agreement'), a copy of
which is attached hereto as Exhibit B, memorializing the terms of the DIP Term Sheet in
accordance with the Final DIP Order. On April 25, 2025, the Court entered an amended Final DIP
Order [Docket No. 4371 (the "Amended Final DIP Order" referred to collectively with the Final
DIP Order as the "Final DIP Order") which included (a) a statement that the DIP Credit Facility is
secured by a deed of trust and similar references; (b) references to an additional parcel number and
the Preliminary Title Report filed in the Chapter 11 cases [Docket No. 425], requested by the title
insurance company, which amendment to the Preliminary Title Report was also reflected in
Exhibit 3 to the Final DIP Order, as requested by the title insurance company.
III. The Marketing and Sale Process
11. As set forth in the Motion for Entry of Order (I) Authorizing and Approving (A) Bid
Procedures and (B) Form and Manner of Notice of Bid Procedures [Docket No. 358] and the
Debtors' Motion for Entry of an Order (I) Approving the Sale of the Purchased Assets to the
Successful Bidder Free and Clear of all Claims, Liens, Interests, and Encumbrances;
(II) Approving the Consensual Termination or Rejection of Ground Leases, Effective as of the
Closing Date; (III) Approving Form of Grant Deed; and (IV) Granting Related Relief [Docket No.
621] (the "Sale Motion"), the Debtors have prosecuted these chapter 11 cases, in part, in pursuit
Case 24-11647-MFW Doc 653 Filed 08/29/25 Page 6 of 17
of a sale of substantially all of their tangible assets to a buyer with the financial capability and
development competence to finish construction and development of the Project.
12. As a result of these efforts, the Debtors successfully marketed their assets,
appointed a stalking horse bidder, held an auction, and have now filed the Sale Motion to, among
other things, approve the Debtors' entry into the PSA with the Successful Bidder and the
consummation of the sale of the Purchased Assets to the Successful Bidder (in such capacity, the
"Buyer") in accordance with the terms of the PSA. As described in more detail in the Sale Motion,
in connection with the proposed sale, the City has also agreed to certain additional
accommodations related to these chapter 1 I cases and the DIP Credit Facility. Specifically, subject
to and conditioned upon the closing the Sale Transaction to the Buyer (and other related conditions
and covenants), the City has agreed to: (i) waive or credit $2.25 million of the DIP Credit Facility
and (ii) the provision of $1 million in additional non -priming secured financing in addition to the
$11 million of financing under the current DIP Credit Facility (with an option in the City's sole
and absolute discretion for up to $1 million of further financing on the same terms) to wind -down
the Debtors' estates following the closing of the Sale (the "City Consideration"). To memorialize
the terms of the City Consideration, the Debtors now seek approval of the DIP Amendment.
THE DIP AMENDMENT
13. As described above, the City Consideration provides meaningful value to the
creditors in these cases by way of a reduction in the current DIP Credit Facility and will provide
the Debtors with additional liquidity in these Chapter 11 cases. In accordance with the agreement
to provide the City Consideration, the Debtors and the DIP Lender seek to enter into the DIP
Amendment, a copy of which will be filed in connection with the Proposed Order as Exhibit 1.
14. The material terms of the DIP Amendment can be summarized as follows:
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Case 24-11647-MFW Doc 653 Filed 08/29/25 Page 7 of 17
a. The City will lend funds in excess of the current $11 million principal DIP
Credit Facility (the "Wind Down Expense Contribution") to provide for
payment of allowed professional fees and costs incurred in connection with
allocation of sale proceeds, plan and disclosure statement, and other wind down
activities, and if applicable professional fees and costs incurred by a liquidating
trust (the "Wind Down Expenses').
b. The maximum committed amount of the Wind Down Expense Contribution
shall be $1,000,000; provided, however, that the City, in its sole and absolute
discretion, may fund up to an additional $1,000,000 upon request of the
Debtors.
c. The terms of the existing DIP Credit Facility will remain in effect, except that
(i) with respect to the Wind Down Expense Contribution, there will be no
priming of other valid debt secured by unavoidable liens on the Debtors' Real
Property sold to the Buyer, or the proceeds thereof to the extent distributable to
secured creditors; (ii) the milestones set forth in the Final DIP Order (as the
same have been updated from time to time by the Debtors in consultation with
the City and the Consultation Parties) will be further updated in accordance with
an agreed -upon revised schedule (the "Post -Amendment DIP Milestones"); and
(iii) the maturity date of the DIP Credit Facility will be extended in accordance
with the Post -Amendment DIP Milestones.
d. The City shall have and retain its first priority liens and security interests in all
of the Debtors' property that does not constitute Purchased Assets (as defined
in the Sale Motion), and its superpriority administrative expenses, to secure
obligations relating to the Wind Down Expense Contribution; provided,
however, that the City shall subordinate its liens, security interests and
administrative expense claims that arise solely from the Wind Down Expense
Contribution to other allowed and unpaid administrative, and priority expenses,
but only to the extent that such subordination is necessary to permit payments
to the holders of such claims under section 1129(a)(9) of the Bankruptcy Code
as part of a confirmed plan proposed by the Debtors (the "Priority Payments')
and the Liens and administrative expense claims that arise from the Wind Down
Expense Contribution shall not prime other valid debt secured by unavoidable
liens on the Debtors' Real Property sold to the Buyer or the proceeds thereof to
the extent of such creditor's interest in such collateral. The Wind Down
Expense Contribution shall be funded via monthly draws in amounts necessary
to pay then -current expenses, consistent with prior practice.
e. In addition to the Wind Down Expense Contribution, the City will provide a
$2,250,000 waiver or credit (the "Credit") with respect to its liens under the
existing DIP Credit Facility. The Credit will be a waiver in the aggregate
amount of $2,250,000 under the DIP Credit Facility with respect to: (i) the
City's existing liens in the real property of the Debtors to be sold to the Buyer;
and (ii) the proceeds thereof.
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f. The DIP Amendment is subject to and conditioned upon satisfaction of each of
the following conditions and covenants: (i) approval by the City Council of the
terms substantially set forth in this Motion at the special session that was
scheduled for August 11, 2025 (satisfied); (ii) the Debtors' approval of the
terms set forth herein (satisfied); (iii) the Debtors' selection of TBE RE
Acquisition Co II LLC ("Turnbridge') as the Successful Bidder and filing of
the Sale Motion not later than August 15, 2025 (satisfied); (iv) approval by the
Court of the relief requested by the Sale Motion, including the Sale Transaction
to Turnbridge, consistent with the terms set forth in the Sale Motion; (v) the
Court's approval of the Proposed Order attached hereto as Exhibit A approving
the relief requested by this Motion, including the DIP Amendment set forth
herein; (vi) closing of the sale to Turnbridge not later than December 15, 2025,
provided, however, that such outside closing date shall not extend or otherwise
alter the outside closing date under the PSA attached to the Sale Motion; (vii)
the City's and the Debtors' mutual agreement as to the form and substance of
the proposed order approving the relief requested by the Sale Motion and the
Proposed Order attached hereto; (viii) agreement by the Debtors to consult with
the City regarding the terms and provisions of any plan and disclosure statement
in these cases, as well as any proposal to allocate proceeds of the Sale
Transaction; (ix) agreement by the Debtors that any plan or other order
providing authority for distribution of the proceeds of the Sale Transaction shall
include a general release of all estate claims and causes of action against the
City, including derivative claims, and a bar order enjoining all persons from
asserting such claims; (x) agreement by the Debtors to take all actions
reasonably requested by the City to facilitate the approval and consummation
of the sale to Turnbridge (i.e., further assurances); (xi) consent by the to the
City continuing to work with Turnbridge on deal terms between City and
Turnbridge, and documents related to the same, effective immediately; (xii) that
the approval of the La Quinta Planning Commission and City Council have
been obtained in accordance with applicable law, the La Quinta Amended
Development Documents, and the other matters that require the City's approval
in connection with the transactions described herein; and (xiii) that the La
Quinta Amended Development Documents and the Option Documents have
been finalized by the parties thereto and executed and delivered by the
Turnbridge and all other parties thereto, and have become effective.
15. Subject to the satisfaction of the conditions and covenants described above, the
Proposed Order provides a substantial benefit to the Debtors' estates by virtue of the $2,250,000
Credit. That benefit is enjoyed, first and foremost, by the secured creditors whose collateral is
subject to priming. As a consequence of the Credit, the priming caps set forth on Exhibit 3 to the
Final DIP Order will be reduced ratably. Specifically, the priming cap under paragraph 1 of Exhibit
3 will be reduced from $1,000,000 to $812,500. The priming cap under paragraph 2 of Exhibit 3
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will be reduced from $7,000,000 to $5,687,500. The priming cap under paragraph 5 of Exhibit 3
will be reduced from $4,000,000 to $3,250,000. These reductions inure directly to the benefit of
the creditors who are secured by the portions of the Debtors' Real Property falling within the stated
caps.3
16. Pursuant to the Final DIP Order, the City obtained a Lien on all of the Debtors'
assets. The Final DIP Order further provides that the City's Lien is a first priority Lien and that it
primes all other Liens on the Debtors' property, subject only to the caps set forth in Exhibit 3 to
the Final DIP Order. After the entry of the Final DIP Order, the Debtors and the City, in
consultation with Stewart Title, identified several acres of property that were not specifically
identified as being included within the caps set forth on Exhibit 3 (the "Supplemental DOT
Collateral"). Per the terms of the Final DIP Order, the City already has a first priority Lien on the
Supplemental DOT Collateral without regard to any cap. To clarify and confirm the status of the
City's Lien on the Supplemental DOT Collateral, the Debtors, subject to approval of this Motion,
shall execute and deliver a supplemental deed of trust (the "Supplemental Deed of Trust"),
substantially in the form attached to the Proposed Order as Exhibit 2, conveying a Lien of record
to the City on the Supplemental DOT Collateral.
17. The Proposed Order further provides that upon the closing of the Sale Transaction,
the Debtors shall establish a segregated escrow account (the "Escrow Account") to hold net sale
proceeds whenever received that are allocable to the sale of the Supplemental DOT Collateral,
which allocable net sale proceeds shall be equal to the acreage of the Supplemental DOT Collateral
3 The City's agreement to a ratable reduction of the priming caps is exceedingly fair. Allocation of the entire Credit
to the Real Property described in paragraph 5 of the Final DIP Order would have minimized the City's exposure
under the Poppy Bank Backstop Indemnity (as defined therein). Nevertheless, based on discussions between the
Debtors and the City, the City has agreed to a ratable reduction so that all of the affected classes of secured
creditors will benefit from the Credit.
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divided by the total acreage of the Debtors' real property conveyed at the closing of the Sale
Transaction, times the net cash received by the Debtors from the Buyer pursuant to the Sale
Transaction. For purposes of determining the amount of net proceeds received from the Buyer
pursuant to the Sale Transaction, the following items shall be deducted from gross sale proceeds:
(A) sales commissions paid, allowed, or reserved on account of the sale of the Purchased Assets;
(B) real property taxes owed by the Debtors (whether prepetition or post -petition) which are paid,
allowed, or reserved as of the closing of the Sale Transaction; and (C) such other customary closing
costs as agreed by the DIP Lender in its sole discretion. The DIP Lender shall have a first priority
priming Lien in the Escrow Account and the funds therein, without the need for perfection or other
action under nonbankruptcy law. Notwithstanding the foregoing, upon the request of the DIP
Lender, the Debtors shall execute a control agreement under applicable nonbankruptcy law with
respect to the Escrow Account and use best efforts to obtain consent to the same from any bank
holding the Escrow Account.
18. In accordance with the Local Rules, the material terms of the DIP Amendment are
summarized as follows:
DIP Facility
DIP Lender: City of La Quinta, California (No change in DIP
Bankruptcy Rule Amendment from DIP Credit Agreement)
4001(c)(1)(B)
Purpose The purpose of the DIP Amendment is to provide the Debtors
Bankruptcy Rule with additional liquidity in order to wind down their estates and
4001(c)(1)(B); Local Rule prosecute a plan of liquidation and to secure the Credit from the
4001-2(a)(i) City that will enhance the distribution to other secured creditors.
DIP Credit Agreement to be upsized by increasing the amount of
Commitment Funding Cap by $1 million to $12 million in the aggregate, with
Bankruptcy Rule the potential for additional funding of an additional $1 million;
4001(c)(1)(B) provided however that the City will provide the Credit of
$2,250,000 under the DIP Credit Facility.
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Approved Budget
No change in DIP Amendment from DIP Credit Agreement,
provided, however, that the Debtors and the City reserve their
Bankruptcy Rule
rights to amend the Approved Budget to provide for the payment
4001(c)(1)(B); Local Rule
of fees and costs incurred in connection with the Debtors' wind-
4001-2(a)(iii)
down activities.
Milestones
Bankruptcy Rule
To be updated in accordance with revised schedule.
4001(c)(1)(B); Local Rule
4001-2(a)(i)(H), (a)(ii)
Term/Maturity
Bankruptcy Rule
To be updated in accordance with revised schedule.
4001(c)(1)(B); Local Rule
4001-2(a)(B), (a)(ii)
No change in DIP Amendment from DIP Credit Agreement,
except that (i) to the extent that there is availability, if any,
remaining under the DIP Credit Facility, but without regard to
the Wind Down Expense Contribution, the Debtors are
authorized, at or before the closing of the Sale Transaction, to
draw down such remaining available funds for use in accordance
with the DIP Credit Agreement, and such funds will be held in a
separate account to which the DIP Lender will have a continuing
Repayment Features
lien and the disbursement of which shall be in accordance with
orders of the Court and applicable law, and (ii) without further
Local Rule 4001-2(a)(i)(E)
order of this Court, the Debtors are authorized and directed to
& (0)
disburse the funds held in the Escrow Account to the DIP Lender,
or, at its direction (A) to repay the funds as may be advanced by
the DIP Lender to the Debtors after the closing of the Sale
Transaction; (B) upon, and to the extent that, the DIP Lender has
made or delivered payment on account of the Poppy Backstop
Indemnity; or (C) upon or to the extent that the DIP Lender and
Poppy Bank have entered into an agreement to reduce, modify,
or terminate the DIP Lender's obligations with respect to the
Poppy Bank Backstop Indemnity.
Liens and Superpriority
Claims
The City shall have and retain its DIP Superpriority Claim.
Bankruptcy Rule
Subject to the satisfaction of all conditions and the Debtors'
4001(c)(1)(B)(i), (xi); Local
compliance with all covenants, the City will waive $2,250,000
Rule 400 1 -(a)(i)(D), G), (P),
under the DIP Credit Facility.
(U), 4001-2(a)(ii)
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With respect to priming of secured claims, the DIP Amendment
provides that the additional funds advanced under the DIP
Amendment will not prime other valid debt secured by
unavoidable liens on the Debtors' Real Property sold to the
Priming of Secured Liens Buyer in connection with the Sale Transaction, or the proceeds
Without Consent of thereof to the extent distributable to secured creditors. However,
Lienholder the priming of secured claims established by the DIP Credit
Local Rule 400 1 -(a)(i)(P) Agreement and the Final DIP Order will not be affected by the
DIP Amendment. Further, the City will have and retain all Lien
rights, without regard to caps set forth in the Final DIP Order, in
the proceeds of the Sale Transaction that are allocated to the City
on account of the Supplemental DOT Collateral.
Borrowing Conditions
Subject to satisfaction or written waiver by the DIP Lender, the
Bankruptcy Rule
DIP Lender's obligations pursuant to the DIP Amendment are
4001(c)(1)(B); Local Rule
conditioned upon:
4001-2(a)(i)(E)
(a) City Council approval of the terms set forth in the DIP
Amendment at the special session scheduled for August
11, 2025;
(b) the Debtors' approval of the terms set forth herein;
(c) the Debtors' selection of Turnbridge as the Successful
Bidder, and filing of the Sale Motion not later than
August 15, 2025;
(d) Court approval of the Sale Motion, including the sale to
the Buyer, consistent with the terms set forth herein;
(e) Court approval of a modification of the Final DIP Order
implementing the terms hereof;
(f) closing on the sale to the Successful Bidder not later than
December 15, 2025; provided, however that such outside
closing date shall not extend or alter the outside closing
date under the PSA with Turnbridge;
(g) the City's and the Debtors' mutual agreement on the form
and substance of the orders approving the sale and the
modification of the Final DIP Order; and
(h) satisfaction or compliance, as applicable, with the
General Terms set forth below.
Other terms:
(a) agreement by the Debtors to consult with the City
regarding the terms and provisions of any plan and
disclosure statement in these cases, as well as any
proposal to allocate proceeds of the Sale Transaction;
(b) agreement by the Debtors that any plan or other order
providing authority for distribution of the proceeds of the
Sale Transaction shall include a general release of all
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estate claims and causes of action against the City,
including derivative claims, and a bar order enjoining all
persons from asserting such claims;
(c) agreement by the Debtors to take all actions reasonably
requested by the City to facilitate the approval and
consummation of the sale to the Successful Bidder (i.e.,
further assurances);
(d) consent by the to the City continuing to work with the
Successful Bidder on deal terms between City and the
Successful Bidder, and documents related to the same,
effective immediately;
(e) that the approval of the La Quinta Planning Commission
and City Council have been obtained in accordance with
applicable law, the La Quinta Amended Development
Documents, and the other matters that require the City's
approval in connection with the transactions described
herein; and
(f) that the La Quinta Amended Development Documents
and the Option Documents have been finalized by the
parties thereto and executed and delivered by the
Successful Bidder and all other parties thereto, and have
become effective.
Events of Default
No change in DIP Amendment from DIP Credit Agreement
Bankruptcy Rule
(other than changes in amounts as may be reflected in an
4001(c)(1)(B); Local Rule
Approved Budget).
4001-2(a)(i)(M)
Carve Out
No change in DIP Amendment from DIP Credit Agreement,
Bankruptcy Rule
except for the establishment of the Escrow Account, as discussed
4001(c)(1)(B); Local Rule
above.
4001-2(a)(i)(F)
Adequate Protection /
Identity of Each Entity
with Interest in Cash
Collateral
No change in DIP Amendment from DIP Credit Agreement.
Bankruptcy Rule
4001(c)(l)(B)(ii);
(b)(1)(13)(i), (iv); Local Rule
4001-2(a)(i)(K) & (P)
Debtor's Stipulations
No change in DIP Amendment from DIP Credit Agreement.
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Bankruptcy Rule
4001(c)(1)(13)(iii); Local
Rule 4001-2(a)(i)(B)
Fees
Bankruptcy Rule
No change in DIP Amendment from DIP Credit Agreement.
4001(c)(1); Local Rule
4001-2(a)(i)(B)
Cross-Collateralization
No change in DIP Amendment from DIP Credit Agreement.
Local Rule 4001-2(a)(i)(N)
Liens on Avoidance
The Liens set forth in the DIP Amendment shall include and be
Actions
payable from and have recourse to all liens on and the proceeds
Local Rule 4001-2(a)(i)(V)
of the Debtors' claims and causes of action under sections 544,
545, 547 and 548 of the Bankruptcy Code or any other avoidance
actions under the Bankruptcy Code.
Marshaling
The Proposed Order approving the DIP Amendment shall
Local Rule 4001-2(a)(i)(X)
include a finding that the DIP Lender, in its capacity as such,
shall not be subject to the equitable doctrine of "marshaling" or
any similar doctrine with respect to the Supplemental DOT
Collateral.
BASIS FOR RELIEF
19. The Court should authorize the Debtors, as an exercise of their sound business
judgment, to enter into the DIP Amendment. Section 364 of the Bankruptcy Code authorizes a
debtor to obtain secured or superpriority financing under certain circumstances discussed in detail
below. Courts grant a debtor considerable deference in acting in accordance with its business
judgment in obtaining postpetition secured credit, so long as the agreement to obtain such credit
does not run afoul of the provisions of, and policies underlying, the Bankruptcy Code. See, e.g., In
re L.A. Dodgers LLC, 457 B.R. 308, 313 (Bankr. D. Del. 2011) ("[C]ourts will almost always defer
to the business judgment of a debtor in the selection of the lender."); In re Trans World Airlines,
Inc., 163 B.R. 964, 974 (Bankr. D. Del. 1994) (approving a postpetition loan and receivables facility
because such facility "reflect[ed] sound and prudent business judgment"); In re Ames Dep't Stores,
14
Case 24-11647-MF-W Doc 653 Filed 08/29/25 Page 15 of 17
Inc., 115 B.R. 34, 40 (Bankr. S.D.N.Y. 1990) ("[C]ases consistently reflect that the court's
discretion under section 364 is to be utilized on grounds that permit reasonable business judgment
to be exercised so long as the financing agreement does not contain terms that leverage the
bankruptcy process and powers or its purpose is not so much to benefit the estate as it is to benefit
a party in interest.").
20. Specifically, to determine whether a debtor has met the business judgment standard, a
court need only "examine whether a reasonable businessperson would make a similar decision under
similar circumstances." In re Exide Techs., 340 B.R. 222, 239 (Bankr. D. Del. 2006); In re Nellson
Nutraceutical, Inc., 369 B.R. 787, 799 (Bankr. D. Del. 2007) (declining to entertain an objection to
[a] transaction ... that ... involves a business judgment made in good faith, upon a reasonable
basis, and within the scope of [the debtor's] authority under the [Bankruptcy Code]").
21. Further, courts must consider the terms of postpetition financing "in context" and
based on the "relative circumstances of the parties" in determining whether they are fair and
reasonable. In re Farmland Indus., Inc., 294 B.R. 855, 886 (Bankr. W.D. Mo. 2003); see also
Unsecured Creditors' Comm. Mobil Oil Corp. v. First Nat'l Bank & Trust Co. (In re Elingsen
McLean Oil Co., Inc), 65 B.R. 358, 365 n.7 (W.D. Mich. 1986) (recognizing that it may be
"necessary, and indeed prudent, for a postpetition debtor to enter into a `hard' bargain with a
creditor ... to acquire needed funds to complete a reorganization").
22. Finally, section 105(a) of the Bankruptcy Code further provides that a court "may
issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of
this title." 11 U.S.C. § 105(a). Pursuant to § 105(a), the bankruptcy courts have broad equitable
powers. In re Combustion Eng'g, Inc., 391 F.3d 190, 235 (3d Cir. 2004) ("As courts of equity,
bankruptcy courts `have broad authority to modify creditor -debtor relationships."' (quoting U.S. v.
15
Case 24-11647-MFW Doc 653 Filed 08/29/25 Page 16 of 17
Energy Res. Co., 495 U.S. 545, 549 (1990))); In re LTL Mgmt., LLC,638 B.R. 291, 323 (Bankr.
D.N.J. 2022) ("Congress ... granted the bankruptcy court broad equitable powers under § 105(a).");
see Momentum Mfg. Corp. v. Employee Creditors Comm. (In re Momentum Mfg. Corp.), 25 F.3d
1132, 1136 (2d Cir. 1994) ("It is well settled that bankruptcy courts are courts of equity, empowered
to invoke equitable principles to achieve fairness and justice in the reorganization process.").
23. The Debtors' determination to enter into the DIP Amendment is a sound exercise
of their business judgment. The Debtors require incremental liquidity to successfully prosecute a
liquidating plan and otherwise complete the administration of these cases. Further, the City's
agreement to provide the City Consideration (a) was an important aspect of the Debtors'
determination to select Tumbridge as the Successful Bidder, (b) represents independent value to
the Debtors' estates, and (c) will provide additional time and opportunity for the Debtors to
negotiate a consensual resolution with their creditors to complete the wind down of these cases.
Further, the terms of the DIP Amendment are the result of arms' -length negotiations between the
Debtors and the City and represent the best efforts of both constituencies to creatively problem
solve in an otherwise unique and challenging situation. Absent the DIP Amendment, the Debtors'
ability to winddown their estates for the benefit of their creditors and stakeholders would be
significantly impacted. The DIP Amendment is fair and reasonable under the circumstances. In
light of the Debtors' exercise of sound business judgment as to the relief requested herein, such
relief is appropriate and should be granted
NOTICE
24. The Debtors will provide notice of this Motion to: (i) the Office of the United States
Trustee for the District of Delaware; (ii) the City; (iii) the Office of the United States Attorney
General for the State of Delaware; (iv) the Office of the Attorney General for the State of
California; (v) the Offices of the Secretaries of State for the States of Delaware and California;
Case 24-11647-MFW Doc 653 Filed 08/29/25 Page 17 of 17
(vi) the Internal Revenue Service; and (vii) all parties that have filed appropriate notice pursuant
to Bankruptcy Rule 2002 requesting notice of all pleadings filed in these chapter 11 cases. The
Debtors submit that, in light of the nature of the relief requested, no other or further notice need
be given.
WHEREFORE, the Debtors respectfully request that the Court enter the Proposed Order,
granting the relief requested in this Motion and granting such other and further relief as is
appropriate under the circumstances.
Dated: August 29, 2025 WILSON SONSINI GOODRICH & ROSATI, P.C.
Wilmington, Delaware
/s/ Catherine C. Lyons
Erin R. Fay (No. 5268)
Shane M. Reil (No. 6195)
Catherine C. Lyons (No. 6854)
Heather P. Lambert (No. 6923)
222 Delaware Avenue, Suite 800
Wilmington, Delaware 19801
Telephone: (302) 304-7600
8-mails: efay@wsgr.com
sreil@wsgr.com
clyons@wsgr.com
hlambert@wsgr.com
-and—
LAW OFFICES OF BENJAMIN M. CARSON, P.C.
Benjamin M. Carson (admitted pro hac vice)
5965 Village Way, Suite E105
San Diego, California 92130
Telephone: (858) 255-4529
E-mail: ben@benjamincarson.com
-and-
Victor A. Vilaplana (admitted pro hac vice)
823 La Jolla Rancho Road
La Jolla, California 92037
Telephone: (619) 840-4130
Email: vavilaplana@gmail.com
Counsel to the Debtors and Debtors -in -Possession
17
Case 24-11647-MFW Doc 653-1 Filed 08/29/25 Page 1 of 2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SILVERROCK DEVELOPMENT COMPANY.
LLC, et al.,
Debtors. 1
Chapter 11
Case No.: 24-11647 (MFW)
(Jointly Administered)
Hearing Date: September 24, 2025 at 10:30 a.m. (ET)
Obj. Deadline: September 23, 2025 at 4:00 p.m. (ET)
NOTICE OF DEBTORS' MOTION FOR ENTRY OF AN ORDER (I) AUTHORIZING
THE DEBTORS' ENTRY INTO AMENDMENT TO THE DIP CREDIT AGREEMENT;
(I1) AUTHORIZING THE DEBTORS TO EXECUTE AND DELIVER THE
SUPPLEMENTAL DEED OF TRUST; AND (II) GRANTING RELATED RELIEF
PLEASE TAKE NOTICE that, on August 29, 2025, the above -captioned debtors and
debtors in possession (collectively, the "Debtors") filed the Debtors' Motion for Entry ofan Order
(1) Authorizing the Debtors' Entry Into Amendment to the DIP Credit Agreement; (II) Authorizing
the Debtors to Execute and Deliver the Supplemental Deed of Trust; and (H) Granting Related
Relief (the "Motion") with the United States Bankruptcy Court for the District of Delaware
(the "Court").
PLEASE TAKE FURTHER NOTICE that objections, if any, to the Motion must be filed
on or before September 23, 2025 at 4:00 p.m. (ET) (the "Objection Deadline") with the United
States Bankruptcy Court for the District of Delaware, 824 North Market Street, 3rd Floor,
Wilmington, Delaware 19801. At the same time, you must serve a copy of the objection upon the
undersigned counsel to the Debtors so as to be received on or before the Objection Deadline.
PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER THE
MOTION WILL BE HELD ON SEPTEMBER 24, 2025 AT 10:30 A.M. (ET) BEFORE THE
HONORABLE MARY F. WALRATH, UNITED STATES BANKRUPTCY COURT JUDGE
FOR THE DISTRICT OF DELAWARE, 824 N. MARKET STREET, 5TH FLOOR,
COURTROOM NO.4, WILMINGTON, DELAWARE 19801.
PLEASE TAKE FURTHER NOTICE THAT, IF YOU FAIL TO RESPOND IN
ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF
REQUESTED IN THE MOTION WITHOUT FURTHER NOTICE OR A HEARING.
' The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification
number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996),
SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences,
LLC (6598) and SilverRock Phase I, LLC (2247). The location of the Debtors' principal place of business and
the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101.
Case 24-11647-MFW Doc 653-1 Filed 08/29/25 Page 2 of 2
Dated: August 29, 2025 WILSON SONSINI GOODRICH & ROSATI, P.C.
Wilmington, Delaware
/s/ Catherine C. Lyons
Erin R. Fay (No. 5268)
Shane M. Reil (No. 6195)
Catherine C. Lyons (No. 6854)
Heather P. Lambert (No. 6923)
222 Delaware Avenue, Suite 800
Wilmington, Delaware 19801
Telephone: (302) 304-7600
E-mails: efay@wsgr.com
sreil@wsgr.com
clyons@wsgr.com
hlambert@wsgr.com
-and-
LAW OFFICES OF BENJAMIN M. CARSON, P.C.
Benjamin M. Carson (admitted pro hac vice)
5965 Village Way, Suite E105
San Diego, California 92130
Telephone: (858) 255-4529
E-mail: ben@benjamincarson.com
,
Victor A. Vilaplana (admitted pro hac vice)
823 La Jolla Rancho Road
La Jolla, California 92037
Telephone: (619) 840-4130
Email: vavilaplana@gmail.com
Counsel to the Debtors
and Debtors -in -Possession
Case 24-11647-MF-W Doc 653-2 Filed 08/29/25 Page 1 of 14
EXHIBIT A
Proposed Order
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 2 of 14
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SILVERROCK DEVELOPMENT COMPANY,
LLC, et al.,
Debtors. t
Chapter 11
Case No.: 24-11647 (MFW)
(Jointly Administered)
Ref. Docket No.
ORDER (n AUTHORIZING THE DEBTORS TO AMEND THE
DIP CREDIT AGREEMENT; (In AUTHORIZING THE DEBTORS TO EXECUTE,
DELIVER, AND RECORD A SUPPLEMENTAL DEED OF TRUST IN FAVOR OF THE
DIP LENDER; AND QIn GRANTING RELATED RELIEF
Upon the motion (the "Motion") of the above -captioned debtors and debtors -in -possession
(collectively, the "Debtors") for entry of an order (this "Order") (i) authorizing, but not directing,
the Debtors to amend the DIP Credit Agreement and (ii) granting related relief, all as more fully
set forth in the Motion; and this Court having jurisdiction over this matter pursuant to 28 U.S.C.
§§ 157 and 1334 and the Amended Standing Order of Reference from the United States District
Court for the District of Delaware, dated February 29, 2012; and this Court having found that this
is a core proceeding pursuant to 28 U.S.C. § 157(b); and this Court having found that this Court
may enter a final order consistent with Article III of the United States Constitution; and this Court
having found that venue of this proceeding and the Motion in this district is proper pursuant to 28
U.S.C. §§ 1408 and 1409; and this Court having found that the relief requested in the Motion is in
the best interests of the Debtors' estates, their creditors, and other parties in interest; and this Court
having found that the Debtors' notice of the Motion and opportunity for a hearing on the Motion were
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification
number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996),
SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences,
LLC (6598) and SilverRock Phase I, LLC (2247). The location of the Debtors' principal place of business and
the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92 10 1.
Case 24-11647-M.FW Doc 653-2 Filed 08/29/25 Page 3 of 14
appropriate and no other notice need be provided; and this Court having entered the Final DIP Order;
and it appearing that entry into the DIP Amendment is a sound and prudent exercise of the Debtors'
business judgment; and this Court having reviewed the Motion and the Sontchi Declaration; and this
Court having determined that the legal and factual bases set forth in the Motion and the Sontchi
Declaration establish just cause for the relief granted herein; and upon all of the proceedings had
before this Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY
ORDERED THAT;
1. The Motion is granted as set forth in this Order.
2. The Debtors are authorized, but not directed, to enter into the DIP Amendment,
substantially in the form attached hereto as Exhibit 1.
3. The Debtors are authorized, but not directed, to execute, deliver and cause the
recordation of the Supplemental Deed of Trust, substantially in the form attached hereto as Exhibit
2.
4. The real property and improvements that are described in the Supplemental Deed
of Trust and the proceeds from the sale thereof (the "Supplemental DOT Collateral"), (i) were and
remain the collateral of the DIP Lender to secure all indebtedness and obligations of the Debtors
to the DIP Lender, including, without limitation, obligations and indebtedness that exist or may
arise from or in connection with the Poppy Bank Backstop Indemnity, and (ii) are not subject to
any cap on priming under the Final DIP Order or Amended Final DIP Order. The DIP Lender has
and shall retain a first priority lien on the Supplemental DOT Collateral.
5. Upon the closing of the Sale Transaction described in the Sale Motion, the Debtors
shall establish a segregated escrow account (the "Escrow Account') to hold net sale proceeds
whenever received that are allocable to the Supplemental DOT Collateral, which allocable net sale
2
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 4 of 14
proceeds shall be equal to the acreage of the Supplemental DOT Collateral divided by the total
acreage of the Debtors' real property conveyed at the closing of the Sale Transaction, times the
net proceeds received by the Debtors from the Buyer pursuant to the Successful Transaction. For
purposes of determining the amount of net proceeds received from the Buyer pursuant to the Sale
Transaction, the following items shall be deducted from gross sale proceeds: (A) sales
commissions paid, allowed, or reserved on account of the sale of the Purchased Assets; (B) real
property taxes owed by the Debtors (whether prepetition or post -petition), which are paid, allowed,
or reserved as of the closing of the Sale Transaction; and (c) such other customary closing costs as
agreed by the DIP Lender in its sole discretion. The DIP Lender shall have a first priority priming
Lien in the Escrow Account and the funds held therein, without the need for perfection or other
action under nonbankruptcy law. Notwithstanding the foregoing, upon the request of the DIP
Lender, the Debtors shall enter into a control agreement under applicable nonbankruptcy law with
respect to the Escrow Account and use best efforts to obtain consent to the same from any bank
holding the Escrow Account. The provisions set forth in this paragraph as to the funding of the
Escrow Account are without prejudice to the allocation of remaining proceeds of the Sale
Transaction among other creditors.
6. To the extent that there is availability, if any, remaining under the DIP Facility, but
without regard to the Wind Down Expense Contribution, the Debtors are authorized at the closing
of the Sale Transaction, to draw down such remaining available funds for use in accordance with
the DIP Credit Agreement and such funds will be held in a separate account to which the DIP
Lender will have a continuing lien and the disbursement of which shall be in accordance with
orders of this Court and applicable law. To avoid uncertainty, the balance of the DIP Credit
Agreement due as of the closing of the Sale Transaction, giving effect to the Credit (discussed
3
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 5 of 14
below), and including the draw referenced in this paragraph, shall be paid to the DIP Lender at
closing.
7. The Debtors are authorized and directed, without further order of this Court, to
disburse the funds held in the Escrow Account to the DIP Lender or at its direction: (i) to repay
the funds as may be advanced by the DIP Lender to the Debtors after the closing of the Sale
Transaction; (ii) upon, and to the extent that, the DIP Lender has made or delivered payment on
account of the Poppy Backstop Indemnity; or (iii) upon or to the extent that the DIP Lender and
Poppy Bank have entered into an agreement to reduce, modify or terminate the DIP Lender's
obligations with respect to the Poppy Bank Backstop Indemnity. Disbursement of the funds in the
Escrow Account under any other circumstance shall be subject to further order of the Court.
8. Subject to and conditioned upon the satisfaction of all conditions and covenants set
forth in the DIP Amendment (including, without limitation, the closing of the Sale Transaction to
Turnbridge), the DIP Lender shall waive $2,250,000 of its claim under the DIP Credit Agreement
(the "Credit"). To the extent all conditions and covenants have been satisfied, the Credit shall
constitute a credit at closing of the Sale Transaction toward the repayment of all amounts due under
the DIP Credit Facility as of such closing, and the caps on priming set forth in Exhibit 3 to the
Final DIP Order shall be further amended as follows: (i) the cap under paragraph 1 of Exhibit 3
shall be reduced from $1,000,000 to $812,500; (ii) the cap under paragraph 2 of Exhibit 3 shall be
reduced from $7,000,000 to $5,687,500; and (iii) the cap under paragraph 5 of Exhibit 3 shall be
reduced from $4,000,000 to $3,250,000.
9. Subject to and conditioned upon the satisfaction of all conditions and covenants set
forth in the DIP Amendment, the maximum principal amount of the DIP Credit Facility shall be
increased by $1,000,000 and such amount shall be made available for the purpose of funding wind-
4
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 6 of 14
down expenses of the Debtors (the "Wind Down Expenses"), all as set forth in greater detail in the
DIP Amendment. Additionally, in the sole and absolute discretion of the DIP Lender, and subject
to all conditions and covenants set forth in the DIP Amendment and the DIP Credit Agreement,
the maximum principal amount of the DIP Facility may be raised by an additional $1,000,000 (for
a total of $2,000,000 of additional financing) to fund the payment of the Wind Down Expenses.
The increase in the authorized principal amount of the DIP Facility is referred to herein as the
"Wind Down Expense Contribution." Except to the extent of the priming caps set forth in
paragraph 8 of this Order and the Carve -Out, the DIP Lender shall have and retain a first priority
Lien in all assets of the Debtors, including, without limitation, avoidance actions of the estates,
and a superpriority administrative expense, to secure the Debtors' obligations and indebtedness to
the DIP Lender; provided, however, that the DIP Lender shall subordinate its Liens and
administrative expense claims that arise solely from the Wind Down Expense Contribution to other
allowed unpaid administrative and priority claims, but only to the extent that such subordination
is necessary to permit payments that are required with respect to such claims under section
1129(a)(9) of the Bankruptcy Code as part of a confirmed plan of liquidation proposed by the
Debtors (the "Priority Payments") and the Liens and administrative expense claims that arise from
the Wind Down Expense Contribution shall not prime other valid debt secured by unavoidable
liens on the Debtors' Real Property sold to the Buyer or the proceeds thereof to the extent of such
creditor's interest in such collateral.
10. The DIP Lender, in its capacity as such, shall not be subject to the equitable doctrine
of "marshalling" or any similar doctrine with respect to the Supplemental DOT Collateral.
11. Any and all objections to the Motion with respect to the entry of this Order that
have not been withdrawn, waived, settled, or resolved and all reservations of rights included
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 7 of 14
therein, are hereby denied and overruled on the merits. This Order shall become effective
immediately upon its entry.
12. The DIP Amendment shall be deemed and hereby is an integrated part of the DIP
Credit Agreement for all purposes under the DIP Credit Agreement, and the Final DIP Order. This
Order shall be deemed integrated into and a part of the Final DIP Order, such that all findings of
fact and conclusions of law made therein, and all relief granted therein, shall be applicable to the
DIP Obligations incurred under the DIP Credit Facility and the DIP Credit Agreement, as amended
by the DIP Amendment. Except to the extent expressly amended herein, the Final DIP Order
remains in full force and effect.
13. Notwithstanding Bankruptcy Rule 9014, any Local Rule, or Rule 62(a) of the
Federal Rules of Civil Procedure, this Order shall be immediately effective and enforceable upon
its entry and there shall be no stay of execution or effectiveness of this Order.
14. The DIP Lender has extended credit to the Debtors in good faith and the reversal
or modification on appeal of this Order shall not affect the validity of any indebtedness incurred,
or any lien granted, under this Order or any other order of this Court.
15. The Debtors are authorized to take any and all actions necessary to execute and
consummate the DIP Amendment and the Supplemental Deed of Trust.
M
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 8 of 14
16. This Court retains exclusive jurisdiction with respect to all matters arising from or
related to the implementation, interpretation, and enforcement of this Order
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 9 of 14
EXHIBIT 1
DIP Amendment
[To be Provided]
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 10 of 14
EXHIBIT 2
Supplemental Deed of Trust
Case 24-11647-MF-W Doc 653-2 Filed 08/29/25 Page 11 of 14
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253
Attention: City Clerk
This document is exempt from payment of a recording fee
Government Code Section 27383
FIRST AMENDMENT TO DEED OF TRUST AND ASSIGNMENT OF RENTS
SECURING DEBTOR -IN -POSSESSION CREDIT FACILITY
LOAN AND SECURITY AGREEMENT
(This Deed of Trust Contains an Acceleration Clause)
This FIRST AMENDMENT TO DEED OF TRUST SECURING PROMISSORY NOTE ("First
Amendment") is made as of the day of , 2025, by and among SilverRock
Development Company, LLC, a Delaware limited liability company, whose address is 343 Fourth
Avenue, San Diego, CA 92101 ("Trustor"), Stewart Title of California, Inc., whose address is
11870 Pierce Street, Suite 100, Riverside, CA 92505 ("Trustee"), and the City of La Quinta, a
California municipal corporation and charter city, whose address is 78495 Calle Tampico, La
Quinta, CA 92253 ("Beneficiary"), amending that certain DEED OF TRUST AND
ASSIGNMENT OF RENTS/SECURING DEBTOR -IN -POSSESSION CREDIT FACILITY
LOAN AND SECURITY AGREEMENT, executed by Trustor and held in trust by Trustee and
for the benefit of Beneficiary, dated January 23, 2025, and recorded on May 14, 2025, as Document
No. 2025-0144695 ("Deed of Trust") in the Official Records of Riverside County, California.
The purpose of this First Amendment is to include, as part of the Trust Estate (as defined in the
Deed of Trust) additional real property that will serve as security for the Secured Obligations (as
defined in the Deed of Trust), as more particularly set forth herein.
NOW, THEREFORE, with reference to the preceding paragraph, the parties amend the Deed of
Trust according to the following:
1. Grant in Trust in Additional Real Property. In addition to the property and interests
therein identified in the Deed of Trust, Trustor grants to Trustee in trust, with power of sale and
right of entry and possession, the following additional property and any interest therein to be
included with the "Real Property" (as defined in the Deed of Trust): (a) Trustor's ownership
interest in and to that certain real property and all improvements and structures now or hereafter
located on or part thereof, located in the City of La Quinta, County of Riverside, State of
California, described as set forth in Exhibit A attached hereto and incorporated herein by reference
(the "Additional Real Property"), (b) all existing and future leases, subleases, subtenancies,
licenses, agreements and concessions relating to the use, occupancy or enjoyment of all or any part
of the Additional Real Property, together with any and all guaranties and other agreements relating
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 12 of 14
to or made in connection with any of the foregoing (individually, a "Lease", and collectively, the
"Leases"); (c) all rents, issues, income, revenues, royalties, profits, proceeds and earnings now or
hereafter payable with respect to or otherwise derived from the ownership, use, management,
operation, leasing or occupancy of the Additional Real Property, including, without limitation,
cash or security deposited under any of the leases to secure the performance by the lessees of their
obligations thereunder (collectively, the "Rents"), and (d) all right, title and interest in and to
Trustor's existing or acquired tangible and intangible personal property attached or appurtenant to
the Additional Real Property, including, without limitation, all equipment, goods, inventory
furniture, furnishings, and fixtures (collectively, "FF&E") and any other personal property
identified as "Pledged Collateral" pursuant to the "DIP Loan & Security Agreement" (as defined
Deed of Trust) attached or appurtenant to the Real Property (collectively, "Personal Property
Appurtenant to the Realty'). The Additional Real Property, and any and all other interests
therein as granted in trust pursuant to this paragraph, shall be and hereby are incorporated as part
of the "Trust Estate" (as defined in the Deed of Trust).
2. Obligations Secured. Trustor makes this grant and assignment of the Additional Real
Property and any and all interests therein pursuant to Paragraph 1 above for the purpose of securing
the "Secured Obligations" (as defined in the Deed of Trust) pursuant to the same terms and
conditions set forth in the Deed of Trust, which are incorporated herein by this reference as though
set forth in full, and with the Additional Real Property to be deemed as perfecting said securing of
the Secured Obligations from and after the date of recording of the Deed of Trust.
3. Capitalized Terms. Capitalized terms used but not otherwise defined in this First
Amendment shall have the meanings given to them in the Deed of Trust.
4. Effect of Amendment; Deed of Trust in Full Force and Effect. Except as expressly
provided in this First Amendment, all of the terms, conditions, and provisions set forth in the Deed
of Trust shall remain in full force and effect. Furthermore, the Deed of Trust, as amended by this
First Amendment, shall remain with the same priority said Deed of Trust perfected in accordance
with applicable law.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date and year first
written above.
"TRUSTOR"
SilverRock Development Company, LLC, a
Delaware limited liability company
Bv:
Name: Christopher S. Sontchi
Its: Managing Member
-2-
Case 24-11647-MF-W Doc 653-2 Filed 08/29/25 Page 13 of 14
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California
County of Riverside
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
-3-
Case 24-11647-MFW Doc 653-2 Filed 08/29/25 Page 14 of 14
EXHIBIT A
TO FIRST AMENDMENT TO DEED OF TRUST
LEGAL DESCRIPTION OF ADDITIONAL REAL PROPERTY
All that certain property located in the City of La Quinta, County of Riverside, State of California,
described as follows:
Parcels E, F and G of Parcel Map No. 37207, in the City of La Quinta, County of Riverside,
State of California, as shown by a Map filed for Record May 3, 2017 in Book 242, Pages 72
through 87, inclusive of Parcel Maps, in the Office of the County Recorder of said County.
Excepting all oil, gas, hydrocarbon substances, and minerals of every kind and character lying
more than five hundred (500) feet below the surface, together with the right to drill into, through,
and to use and occupy all parts of the Phase lA and 1B property lying more than five hundred
(500) feet below the surface thereof for any and all purposes incidental to the exploration for and
production of oil, gas, hydrocarbon substances or minerals from said Phase lA and 113 property
or other lands, but without, however, any right to use either the surface from said Phase IA and
1B property or any portion thereof within five hundred (500) feet of the surface for any purpose
or purposes whatsoever, or to use the Phase lA and 113 property in such a manner as to create a
disturbance to the use or enjoyment of the Phase lA and 1B property, as reserved by The City of
La Quinta, a California Municipal Corporation and Charter City, in the Grant Deed recorded
November 28, 2018, as Instrument No. 2018-0464674, of Official Records.
FOR INFORMATIONAL PURPOSES ONLY: APN: 777-490-053, 777-490-0545 777-490-055
[End of legal description]
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