Innkeepers Emerges from Chapter 11

PALM BEACH, Fla., Oct. 27, 2011 /PRNewswire/ -- 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/.    

SOURCE Innkeepers USA Trust