As part of his ruling Judge Kaplan also denied a motion by several of Kara's key lenders, who are owned a total of $250 million, to convert the case to Chapter 7. That would have forced the liquidation of Kara's assets and the banks involved would have been first in line to be paid off. The Chapter 7 motion was filed by lead lender North Fork Bank.
Kara officials also announced yesterday that Bear Stearns has agreed to lend the company $2.6 million in interim financing, which would allow the company to begin completion of under-construction homes. The deal still must be approved by Judge Kaplan, a decision that's expected to come down by the end of this week.
Kara attorney David Bruck also informed the court yesterday that the company was working on a deal that could bring in as much as $55 million in financing. He declined further comment on the pending transaction.
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