12 AN INTRODUCTION TO DIP FINANCING Jane Lee

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discussed in more detail in Part Five, 1 below. As with claims
arising under section 364(a), the creditor’s claim under section 364(b)
will be an administrative expense claim. 11 U.S.C. § 364(b).
3) Section 364(c). This section provides three different types of
protection available for a creditor, but only if the trustee can show that
financing was not available without such protection after notice and
hearing. 11 U.S.C. § 364(c). Although it may not be required to seek
credit from every possible source, a debtor must affirmatively
demonstrate that it has made a reasonable effort to seek other sources
of available credit under sections 364(a) and (b), and the debtor is not
entitled to merely assume that less onerous financing is unavailable.
Suntrust Bank v. Den-Mark Const., Inc., 406 B.R. 683, 693 (E.D.N.C.
2009) (unwillingness of pre-petition secured creditor to extend credit
did not demonstrate unavailability of alternative financing for purposes
of section 364(d)); In re Ames Dept. Stores, Inc., 115 B.R. 34, 40
(Bankr. S.D.N.Y. 1990); see also Bray v. Shenandoah Fed. Sav. &
Loan Ass’n (In re Snowshoe Co., Inc.), 789 F.2d 1085, 1088 (4th Cir.
1986) (in context of obtaining credit secured by equal or senior lien,
debtor in possession demonstrated inability to obtain credit by
contacting financial institutions in immediate geographical area, and
debtor in possession is under no obligation to seek credit from every
possible lender), In re Plabell Rubber Prods., Inc., 137 B.R. 897, 899
(Bankr. N.D. Ohio 1992) (meeting with one alternative lender was
insufficient to demonstrate unavailability of financing).
(a)
A creditor may be granted an administrative expense claim
with priority over all other administrative expense claims, or a
“superpriority” administrative expense claim. 11 U.S.C. §
364(c)(1). But see In re Mayco Plastics, Inc., 379 B.R. 691,
698, 706 (Bankr. E.D. Mich. 2008) (holding that section
364(c)(1) claim did not automatically entitle lender to an
administrative expense claim without specific request or court
authorization). Note that courts differ on whether the
superpriority administrative expense claim will have priority
over the administrative claims in a subsequent Chapter 7 case.
Compare In re Energy Coop., Inc., 55 B.R. 957, 963 n.20
(Bankr. N.D. Ill. 1985) (stating in dicta that a pre-conversion