NEW YORK CITY-Innkeepers USA Trust has settled its dispute with Cerberus Capital Management and Chatham Lodging Trust, agreeing to sell 64 hotels to the joint venture for a reduced price of $1.02 billion.
As GlobeSt.com reported, a previous deal to sell the hotels to the joint venture fell apart in August. Since then, a case had been making its way through the courts, though a resolution had been rumored for some time. This settlement requires modifications to the existing Plan of Reorganization, and will allow Innkeepers to exit Chapter 11 bankruptcy protection.
“We are very pleased with this outcome,” Innkeepers’ chief restructuring officer Marc Beilinson said in a prepared statement about the settlement. “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 plan from Chapter 11.”
Chatham’s CEO, Jeff Fisher, said that the JV was “excited about owning this valuable portfolio,” and that it looks forward “to creating significant value for their shareholders and investors.”
The original price for the hotels was $1.12 billion, but Chatham and Cerberus backed out of that agreement in August, leading to the recently settled dispute. According to a statement provided by Innkeepers, the $1.02 billion sales price represents “an increase in value of approximately $75 million to creditors when compared to the baseline bid established for the May 2011 auction.”
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