Hotel Online  Special Report


 Shareholder Class Action Filed Against
Choice Hotels International, Inc.
Complaint alleges Choice Issued Materially False and Misleading
Statements Concerning its Business, Operations and Prospects
RADNOR, Pa., April 23, 2007 - The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the District of Colorado on behalf of all common stock purchasers of Choice Hotels International, Inc. (NYSE:CHH) ("Choice Hotels" or the "Company") from April 25, 2006 through July 26, 2006, inclusive (the "Class Period").

The Complaint charges Choice Hotels and certain of its officers and directors with violations of the Securities Exchange Act of 1934.  More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: 

  1. that new hotel franchise contracts sharply declined to the point where the Company was not meeting internal expectations; 
  2. as such, Choice Hotels had no choice but to report slowing growth in this key business segment; 
  3. that Choice Hotels was experiencing declining growth in its conversion of hotels to its system; 
  4. that the Company lacked adequate internal and financial controls; and 
  5. that, as a result of the foregoing, the Company's statements about its financial strength and operating condition were lacking in any reasonable basis when made.
Choice Hotels, through its subsidiaries, operates as a hotel franchisor worldwide.  The Company franchises lodging properties under brand names, such as Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria Suites, and Flag Hotels.  As of December 31, 2006, the Company had 5,376 hotels under franchise agreements, and an additional 930 hotels under development.

Prior to and throughout the Class Period, Choice Hotels represented to investors that the Company's business model was going to continue to deliver strong revenue and earnings growth to investors.  One of the main tenets of this plan was the franchising of hotels, and converting newly acquired hotels into the Choice Hotels' system.

However, on July 25, 2006, after the market had closed for the day, the Company shocked investors when it revealed that, contrary to earlier representations, the Company was unable to sign nearly as many franchise agreements as it projected that it would.  The Company further revealed that it was also unable to successfully integrate newly acquired hotels into the Choice Hotels' system as planned.

Upon the release of this news, shares of the Company's stock fell $14.65 per share, or 24.89 percent, to close on July 26, 2006 at $44.20 per share, on unusually heavy trading volume.

Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler which prosecutes class actions in both state and federal courts throughout the country.  Schiffrin Barroway Topaz & Kessler is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.

For more information about Schiffrin Barroway Topaz & Kessler or to sign up to participate in this action online, please visit

If you are a member of the class described above, you may, not later than June 11, 2007, move the Court to serve as lead plaintiff of the class, if you so choose.  A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation.  In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class.  Under certain circumstances, one or more class members may together serve as "lead plaintiff."  Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.  You may retain Schiffrin Barroway Topaz & Kessler or other counsel of your choice, to serve as your counsel in this action.


Schiffrin Barroway Topaz & Kessler, LLP
Darren J. Check, Esq.
280 King of Prussia Road
Radnor, PA 19087

Also See: Choice Hotels Reports Net Income Up 12% to $24.1 million 2nd Qtr 2006, Domestic System-wide RevPAR Increased 7.7% / Operating Statistics by Brand / July 2006
New Corporate Organizational Structure at Choice Hotels International; Joseph M. Squeri Elected President and Chief Operating Officer / September 2006

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