Innkeepers USA Trust (KPA) agreed to a prepackaged bankruptcy
filing that will leave real-estate entities of Lehman Brothers
Holdings Inc., one of its biggest creditors, with substantially all
of the equity in the reorganized company.
The real-estate investment trust will significantly cut its
debt, estimated at more than $1 billion, with the company
maintaining its portfolio of 72 extended-stay hotels and other
properties under brands such as Hampton Inn, courtyard by Marriott
and Embassy Suites.
Marriott International Inc. (MAR) also agreed on a franchising
pact that is contingent on Innkeepers' ability to upgrade some of
its hotels.
The company, based in Palm Beach, Fla., took on hundred of
millions in debt in a $1.5-billion buyout by Apollo Investment
Corp. in 2007. Innkeepers expects to re-emerge from Chapter 11
restructuring in "short order," but didn't give further
details.
Chief Restructuring Officer Marc Beilinson said the company has
positive operational cash flows, and that along with its two
debtor-in-possession financing agreements for about $67 million
earmarked toward hotel improvements, has "the resources to meet our
ongoing financial needs." The company and third-party managers will
continue to operate the hotels.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com