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Reorganization Plan for Hotel REIT Innkeepers USA
Trust Wins Court Approval

30 June 2011 - Innkeepers USA Trust and its affiliates (the “Company”) today announced that less than a year after the Company entered Chapter 11, the United States Bankruptcy Court for the Southern District of New York entered an order confirming the Company’s chapter 11 plan of reorganization. The Court’s approval of the plan, which was supported by the Company’s secured lenders and has been accepted by more than 90 percent of Innkeepers’ unsecured creditors and shareholders, clears the way for Innkeepers to emerge from Chapter 11.

Innkeepers’ Chief Restructuring Officer, Marc A. Beilinson said that the reorganization plan confirmed by the Court provides maximum recovery to the Company’s creditors while ensuring the continued viability of the hotel properties. “Ensuring our secured and unsecured creditors would receive the greatest possible recovery, while at the same time preserving the value of the hotel properties, was our key objective as we examined the various restructuring alternatives available. The Plan of Reorganization confirmed today fulfills these goals and is a great result for our creditors, franchisors, guests and employees.”

The Company also noted that throughout its restructuring process, Innkeepers has maintained normal business operations at all of its properties, including completing substantial work on the property improvement plans required by franchisors on time and under budget, as well as having successfully maintained its supportive relationships with its franchisors.

The Company’s plan of reorganization is the result of an extensive marketing process which increased Innkeepers’ enterprise value by approximately $150 million. Under the terms of the plan:

  • A joint venture between the private-equity firm Cerberus Capital Management, L.P. and the real estate investment trust Chatham Lodging will purchase for approximately $1.1 billion the equity in entities that own and operate 65 of the Company’s hotels.
  • Chatham Lodging will also purchase for approximately $195 million, five of the Company’s hotels that serve as collateral for loan trusts serviced by LNR Partners LLC.
  • The majority of the Company’s unsecured creditors and all of the holders of the publicly traded Preferred C Shares are expected to receive a meaningful recovery.
<>“Given the fact that in 2010 the hospitality industry was still experiencing one of the most challenging operating environments in its history as well as the sluggish economic recovery, the successful restructuring of this company and the preservation of 3,500 jobs is a truly remarkable achievement,” Mr. Beilinson said. “The significant progress we have made during our restructuring is the result of a great deal of hard work from all involved. We are grateful to our creditors who worked with us to achieve a consensual resolution as well as the loyalty our franchisors and suppliers demonstrated during this challenging time."

The Company is working diligently to effectuate the transaction outlined in the plan, including closing the sales transactions to Chatham Lodging and the joint venture. The Company expects that the transactions will close in short order.

Copies of the Court’s confirmation order and other court documents are available at www.omnimgt.com/innkeepers/

<>Kirkland & Ellis LLP is Innkeepers’ restructuring counsel and Moelis & Company LLC is its financial advisor.

About Innkeepers USA Trust | Innkeepers USA Trust is a real estate investment trust and a leading owner of upscale extended-stay hotel properties throughout the United States. The company currently owns interests in 71 hotels with approximately 10,000 rooms in 19 states and the District of Columbia.

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Contact:

Innkeepers USA Trust
www.innkeepersusa.com
306 Royal Poinciana Plaza
USA - Palm Beach, FL 33480
Phone: 561-835-1800
Fax: 561-835-0457
Email: info@innkeepersusa.com

 
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Also See: Chatham Lodging Emerges as Winning Bidder at Two Separate Bankruptcy Auctions Related to Innkeepers USA Trust Hotels; One, Through a Joint Venture with Cerberus Capital Management, for a Purchase Price of $1.125 billion for 64 Properties; the Second, for a Purchase Price of $195 million for Five Additional Hotels / May 2011

Hotel REIT Innkeepers USA Trust Files for Bankruptcy Protection; Pre-arranged Financial Restructuring in Place - Operations to Continue Without Interuption / July 2010

Innkeepers USA Trust Discontinues Debt Service on its Hilton Hotel in Ontario, California; May Transfer Ownership of the Hotel Back to the Lender / January 2010

Innkeepers USA Trust Acquiring from an Affiliate of RLJ Development Four California Hotels for $215 million, or $231,000 per room / July 2006
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