The Timeshare Beat Home | Today's Headlines | Back to Previous Page
|
The Timeshare Beat Home | Today's Headlines | Back to Previous Page |
|
|
|
Press Release: Tanner & Haley Resorts
July 25, 2006
WESTPORT, CT -- Tanner & Haley Resorts:
Tanner & Haley Resorts, a leading, privately held destination club enterprise based in Westport, Conn.,
yesterday announced that its U.S.-based operations, principally including Preferred Retreats, LLC and Complete
Retreats, LLC, have filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code. Tanner
& Haley has taken this action to enhance its ability to meet its financial obligations, modify its business
model and position the company for long-term stability. The Chapter 11 filing was made on July 23 in the U.S. Bankruptcy
Court for the District of Connecticut in Bridgeport, Conn.
In connection with the financial reorganization, Tanner & Haley has obtained a commitment from its principal
pre-petition lenders, The Patriot Group, LLC, and Beal Bank, S.S.B., for interim debtor-in-possession (DIP) financing
of $10 million. This interim financing and the company's pre-petition credit facilities will be replaced in due
course by a permanent credit facility of up to $85 million. The purpose of this financing, which is subject to
court approval, is to help ensure Tanner & Haley's ability to continue to operate in the ordinary course, such
as meeting its employee payroll and post-petition vendor obligations during the reorganization process.
Tanner & Haley remains in operation and is continuing to serve its Members. The company intends to continue
to meet substantially all travel commitments previously made to Members and to continue to provide Members with
a wide range of destinations and services.
Tanner & Haley also announced today that Holly Felder Etlin, a Principal at XRoads Solutions Group LLC, has
been named Chief Restructuring Officer, a new position, effective immediately. In this capacity she will work with
the company's existing management team in overseeing day-to-day operations, financial matters and strategic planning.
Ms. Etlin has more than 25 years of experience providing restructuring and reorganization services to companies
and their creditors in the retail, distribution, consumer products, and health care industries. Most recently she
served as turnaround advisor to Winn-Dixie Stores, Inc., Chief Restructuring Officer at Impath, Inc. and Chief
Restructuring Officer of San Francisco Music Box and The Museum Company.
Rob McGrath, founder and Chief Executive Officer of Tanner & Haley, said: "We deeply regret any impact
the Chapter 11 filing may have on our Members and other creditors. Now, as always, we appreciate the interest and
support of our Members, employees, vendors and other business partners. Together, we hope to position the company
for continued leadership in the hospitality industry for many years to come."
In a letter sent today to its Members, Tanner & Haley said that its financial difficulties were largely attributable
to a business model that proved to be unsustainable, with revenues unable to keep pace with the costs associated
with its "members-first" approach. Among other things, the company in the past rarely refused a Member's
travel request, and if a desired property in the company's portfolio was unavailable when requested, the company
would commonly enter into a costly short-term lease with a third party. In addition, many destination club members
received their memberships at a deep discount and/or locked in extremely low annual dues and daily usage fees.
The company also pursued various business and real-estate ventures that it believed to be synergistic but that
ultimately proved unsuccessful. Such factors, coupled with increasingly stiff competition in its industry, made
it difficult for the company to pay its bills, make planned improvements on existing properties and invest in new
properties. Accordingly, the company intends to use the Chapter 11 process to stabilize its finances and develop
a more viable business model.
Ms. Etlin said: "As part of the Chapter 11 process, we will be reviewing and, where appropriate, revising
Tanner & Haley's business model so that, upon completion of the financial reorganization, the company will
be better positioned to achieve long-term strength, stability, profitability and growth. We are also committed
to having the company emerge from the process with greatly enhanced corporate governance and financial transparency."
The company has filed several first day motions in the Connecticut bankruptcy court to support its ongoing U.S.
operations, including requests for interim approval of the DIP facility and for permission to pay employees and
continue employee benefit programs during the reorganization process, both of which are expected to be approved
shortly.
Tanner & Haley's legal counsel with regard to its financial reorganization is Dechert LLP.
About Tanner & Haley Resorts
Tanner & Haley Resorts is a five-star hospitality and real estate management company that operates a collection
of offerings with a focus on providing Members and guests private residence use with an array of luxurious services,
amenities and life-defining experiences. Offering three Clubs--Private Retreats, Distinctive Retreats and Legendary
Retreats--each with its own pricing structure, consumers can select the level of membership that suits their life
best. Headquartered in Westport, Conn., and founded in 1998 with the world's first destination club, Tanner &
Haley Resorts products also include Tanner & Haley Jets and Tanner & Haley Villa Hotels.
-------------------------
Contact: Kekst and Company Michael Freitag or Roy Winnick, 212-521-4800
Source: Tanner & Haley Resorts