ATLANTA-Lodgian Inc. and most of its subsidiaries are out of Chapter 11 today after voluntarily filing for protection under the United States Bankruptcy Code on Dec. 5, 2001. Lodgian had listed total assets of $1 million and debt of $968.7 million.
Merrill Lynch Mortgage Lending Inc. is providing Lodgian with a $309 million credit facility. During its protection period, Lodgian was operating its hotels largely from a $25 million loan by a New York-based lender group led by Morgan Stanley and Lehman Brothers Inc.
“With our new financing and significantly reduced leverage, Lodgian is well-positioned to benefit from an economic recovery and is committed to increasing shareholder value, going forward,” company president/CEO David E. Hawthorne says in a prepared statement.
Seventy-nine Lodgian subsidiaries are out of Chapter 11; 18 remain under protection. The company plans to sell nine hotels by the end of first quarter 2003.
Lodgian was operating its 105 hotels in 32 states and Windsor, Ontario, Canada under a court-approved debtor-in-possession status since its 2001 bankruptcy filing with the U.S. Bankruptcy Court for the Southern District of New York (Manhattan). The company operates hotels under national franchises such as Holiday Inn, Marriott, Hilton and Crowne Plaza.
For the six months ended June 30 of this year, total Lodgian revenue dropped 14% to $208.1 million, according to its last unaudited consolidated balance sheet of Sept. 30, 2001, filed with the Securities and Exchange Commission. Net losses before extraordinary items increased 13% to $15.4 million.
Lodgian was formed in December 1998 through the merger of Servico Inc. and Impac Hotel Group LLC.