Tanner & Haley Resorts obtains court OK of disclosure statement; confirmation hearing set for Oct. 23

By Reshmi Basu

New York, Aug. 30 - Tanner & Haley Resorts' plan of reorganization obtained court approval Thursday from the U.S. Bankruptcy Court for the District of Connecticut, according to a person familiar with the case.

The source added that the judge has yet to enter the order but had verbally approved the plan at the close of Thursday's hearing.

Subject to the filing of the order, the confirmation hearing is scheduled for Oct. 23.

As previously reported, the plan distributes proceeds from a liquidating trust to creditors.

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.

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% 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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