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Innkeepers USA Trust Reaches Settlement with Cerberus and Chatham Lodging
on Acquisition of Innkeepers 64 Hotels for Approximately $1.2 Billion, Roughly
$75 million Increase in Value Above Base Bid; Reorganization Plan Preserved

NEW YORK, Oct. 19, 2011 -- Innkeepers USA Trust and its affiliates ("Innkeepers") today announced that they have reached an updated agreement with Cerberus Series Four Holdings, LLC, Chatham Lodging Trust and other related parties that is supported by Innkeepers' constituents and clears the way for the sale of 64 Innkeepers hotels to a Cerberus-Chatham joint venture for approximately $1.02 billion.

The sales price yields an increase in value of approximately $75 million to creditors when compared to the baseline bid established for the May 2011 auction. Moreover, the settlement can be effectuated through consensual modifications to the existing Plan of Reorganization ("Plan") confirmed by the U.S. Bankruptcy Court in June 2011, which will allow the Company to exit from Chapter 11 as planned.

"We are very pleased with this outcome," said Innkeepers' Chief Restructuring Officer, Marc A. Beilinson. "The updated agreement provides a significant cash premium to the original stalking horse bid and a meaningful return to our creditors, and it allows us to move ahead with a timely exit from Chapter 11."

With the exception of Midland Loan Services and Lehman ALI Inc., both of which support the terms of the deal and have agreed to their treatment under the modified Plan, all of Innkeepers' unsecured creditors and equity holders will continue to receive the same treatment they were promised under the confirmed Plan in June. The revised agreement is subject to Court approval.

The fixed-rate debt, serviced by Midland, will be modified to the new amount of approximately $675 million. Lehman, the holder of the floating-rate mortgages, will receive a cash payment of approximately $224 million on account of its claims.

Beilinson 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 successfully maintaining its supportive relationships with its franchisors.

"Chatham and Cerberus are excited about owning this valuable portfolio and look forward to creating significant value for their shareholders and investors," said Jeff Fisher, Chatham's Chief Executive Officer.

Kirkland & Ellis LLP is Innkeepers' restructuring counsel and Moelis & Company LLC is its financial advisor. Alix Partners provides restructuring services to Innkeepers. Marc Beilinson is a principal at Beilinson Advisory Group.

Copies of the settlement and other court documents are available at

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 64 hotels with approximately 8,400 rooms in 18 states.


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Also See: Innkeepers USA Trust Files Suit Against Cerberus and Chatham Lodging For Breach of Commitment to Acquire Innkeepers Hotels for $1.12 Billion; Innkeepers States Business Remains Strong with Performance Unchanged / August 2011

Reorganization Plan for Hotel REIT Innkeepers USA Trust Wins Court Approval / July 2011

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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