Tanner & Haley looks to increase DIP commitment by $2 million, reduce reserves by $4 million

By Caroline Salls

Pittsburgh, Nov. 3 - Tanner & Haley Resorts requested court approval of an amendment to its debtor-in-possession facility that adds a total of $2 million to the DIP and reduces required reserves on availability by about $4 million, according to a Friday filing with the U.S. Bankruptcy Court for the District of Connecticut.

Under the amendment, the total DIP availability will be increased to $82 million from $80 million.

In exchange for the additional liquidity, the company agreed to increase the interest rate on $5 million of the DIP to 20% higher than the rest of the DIP, the filing said.

Tanner & Haley said it is still in discussions with lender Ableco on the proposed DIP amendment, so the terms remain subject to change.

The company said the amendment is necessary to allow it to fund its operations, including payroll, and it may not be able to continue as a going concern for more than a few weeks without the amendment.

In addition, Tanner & Haley said that the added time the additional liquidity will afford it will be enough to allow the company to finish its review of investor proposals, to formulate an appropriate exit strategy and to facilitate a prompt exit from bankruptcy.

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

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