MSR Hotels & Resorts seeks court approval of $2 million DIP facility

By Caroline Salls

Pittsburgh, June 12 - MSR Hotels & Resorts, Inc. requested court approval to obtain $2 million in debtor-in-possession financing from CNL DIP Recovery Acquisition LLC, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company said the financing will allow it to satisfy some post-bankruptcy administrative expenses.

Although it reached an agreement that will allow a sale process for its resort marks and provide a source of recovery for the estate and its creditors, MSR said the DIP facility may be necessary to the extent the estate's share of the sale proceeds is insufficient to cover professional fees incurred during the Chapter 11 case.

Interest will be one-month Libor plus 300 basis points.

The facility will mature on the earliest of 12 months from the date of the first draw, 30 days after the plan of reorganization effective date if a funding trigger has not occurred and the fifth day following notice of case dismissal, appointment of a trustee or examiner, specified relief from the automatic stay, the entry of an order granting any claim superpriority status or lien, actual invalidity of the DIP liens or a DIP superpriority claim, any challenge to the liens or superpriority claim, conversion of the Chapter 11 case and entry of an order modifying, staying, revoking or reversing the financing order without consent of the lender.

A hearing is scheduled for July 17.

MSR Hotels, a New York-based real estate investment trust, filed for bankruptcy on May 8. Its Chapter 11 case number is 13-11512.

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