Tanner & Haley Resorts exits Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Jan. 2 - Tanner & Haley Resorts emerged from Chapter 11 bankruptcy when its plan of liquidation took effect on Dec. 31, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Connecticut.

As previously reported, the plan was confirmed on Nov. 30.

The plan distributes proceeds from a liquidating trust to creditors.

According to Wednesday's notice, Joel S. Lawson III has been appointed liquidating trustee, and Brian W. Anderson, Michael A. Freedman and Christopher Swann were appointed as the plan advisory committee.

The liquidating trust will be funded by any cash proceeds remaining from the company's asset sale, all property or proceeds from the sale of property that was not included in the asset sale, recoveries from avoidance actions and litigation and proceeds from the company's directors and officers' liability insurance policy.

Creditor treatment

Treatment of creditors under the plan will include:

• Holders of administrative, convenience, priority tax and priority non-tax claims will recover 100% in cash;

• Holders of secured claims will receive either full payment in cash, return of the collateral securing the claim or reinstatement of the claim;

• Holders of more than $300 million in general unsecured claims will receive their share of the cash proceeds of the liquidating trust in two tranches.

Under the first tranche, for the first up to $10 million of cash distributed from the trust, the general unsecured claimants' share will be calculated based on either 33% or 100% of the face amount of their claim, depending on acceptance or rejection of a membership agreement.

Under the second tranche, during the second distribution phase all general unsecured shareholders will receive their share of trust assets based on 100% of the remaining portion of their claims; and

• All equity interests will be canceled and holders will receive no distribution under the plan.

Tanner & Haley is a hospitality and real estate company based in Westport, Conn. It filed for Chapter 11 on July 23, 2006, and its case number is 06-50245.

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