In Re Arlington Hospitality, Inc.

MEMORANDUM OPINION

A. BENJAMIN GOLDGAR, Bankruptcy Judge.

This is an unusual case of post-petition financing gone bad. In 2005, Arlington Hospitality, Inc. and its subsidiaries (collectively, “Arlington”), operators of the “AmeriHost” hotel chain, filed for relief under chapter 11. Before filing, Arlington hastily negotiated an agreement for post-petition financing with Arlington LF, LLC (“LF”), an unrelated entity. After filing, Arlington moved for entry of interim and final orders authorizing the financing. An interim order was entered authorizing part of the financing, as the motion had…