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Red Lion Hotels unit defaults on loan

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Red Lion Hotels unit defaults on loan

A Red Lion Hotels Corp. subsidiary was informed by its lender that it was in breach of two covenants of a $16.0 million loan and that the breaches constituted an event of default under the loan agreement.

Specifically, the subsidiary, RLH DC LLC, was in breach of the loan's debt-service coverage ratio covenant and its loan-to-value covenant under the loan with Pacific Western Bank and other lenders.

The hotel company and the unit increased the principal guarantee under the loan to $10.5 million from $4.5 million to cure the debt-service coverage ratio breach, and cured the loan-to-value ratio breach by increasing the loan-to-value ratio through May 31, 2019.

Red Lion also said Executive Vice President and Chief Marketing Officer William Linehan agreed to leave the company May 31, 2019.