Romacorp requests court OK of $17 million DIP to repay pre-bankruptcy loan

By Caroline Salls

Pittsburgh, Feb. 14 - Romacorp, Inc. requested approval of up to $17 million in second-priority revolving debtor-in-possession financing from Ableco Finance, LLC to be used to pay off $13.6 million outstanding under its pre-bankruptcy credit facility with General Electric Capital Franchise Finance Corp., according to a Monday filing with the U.S. Bankruptcy Court for the Northern District of Texas.

Proceeds of the DIP will also be used to fund capital expenditures, for general operating, corporate and ongoing administrative expenses and to pay its bankruptcy professionals.

Maturity will be the earlier of six months, upon the consummation of a plan of reorganization or upon an event of default.

Interest will be Libor plus 325 basis points.

The unused line fee will be 50 bps.

The company will pay a $1,500 loan servicing fee.

Romacorp, the Dallas-based operator of the Tony Roma's restaurant chain, made a prepackaged bankruptcy filing on Nov. 6. Its Chapter 11 case number is 05-86818.

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