News for the Hospitality Executive
Innkeepers USA Trust Emerges from Chapter 11 Following
PALM BEACH, Fla., Oct. 27, 2011-- Innkeepers USA Trust and its affiliates ("Company") announced today that the Company has successfully completed its restructuring and emerged from Chapter 11.
The Company emerged today following the closing of the $1.02 billion sale of 64 Innkeepers' hotels to a joint venture between the private equity firm Cerberus Capital Management, L.P. and the real estate investment trust Chatham Lodging that was approved by the U.S. Bankruptcy Court, Southern District of New York last week. Chatham Lodging had previously purchased five of the Company's hotels that served as collateral for loan trusts serviced by LNR Partners, LLC, for approximately $195 million.
A substantial majority of the Company's unsecured creditors are expected to receive a recovery of more than 90 cents on the dollar.
"This is a great accomplishment," said Innkeepers' Chief Restructuring Officer Marc A. Beilinson. "Despite conventional wisdom, we have demonstrated that the myriad complex issues surrounding commercial mortgage backed securities can be effectively resolved utilizing the Chapter 11 process."
Chapter 11 provided several key advantages that have strengthened Innkeepers and enhanced its ability to compete.
"First of all, Chapter 11 gave us the time and financial resources from our debtor-in-possession financing to renovate and revitalize the properties," Beilinson said. "It also allowed us to maintain good relationships with our franchisors and vendors. As a result, the Company is emerging with higher revenues and stronger operations than when it entered Chapter 11."
"In a little over a year, we achieved a tremendous outcome for our secured and unsecured creditors, franchisors, guests and the approximately 3,500 people who continue to be employed at the hotel properties," Beilinson said.
Kirkland & Ellis LLP is Innkeepers' lead restructuring counsel and Moelis & Company LLC is its financial advisor. Alix Partners provided restructuring services. Marc Beilinson is a principal at Beilinson Advisory Group.
Copies of the settlement and other court documents are available at: http://www.omnimgt.com/innkeepers/.
Innkeepers USA Trust
Lodging and Cerberus Capital Complete Acquisition of Innkeepers USA
Trust's 64 Hotels for $1.02 billion / October 2011
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 / October 2011
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
Plan for Hotel REIT Innkeepers USA Trust Wins Court Approval / July
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
REIT Innkeepers USA Trust Files for Bankruptcy Protection; Pre-arranged
Financial Restructuring in Place - Operations to Continue Without
Interuption / July 2010
USA Trust Discontinues Debt Service on its Hilton Hotel in Ontario,
California; May Transfer Ownership of the Hotel Back to the Lender /
|Innkeepers USA Trust Acquiring from an Affiliate of RLJ Development Four California Hotels for $215 million, or $231,000 per room / July 2006|