June 29, 2011 · 0 Comments
PALM BEACH, Fla.– June 29, 2011 (www.hospitalitybusinessnews.com) –Innkeepers USA Trust and its affiliates (the “Company”) today announced that less than a year after the Company entered Chapter 11, the United States Bankruptcy Court for the Southern District of New York entered an order confirming the Company’s chapter 11 plan of reorganization. The Court’s approval of the plan, which was supported by the Company’s secured lenders and has been accepted by more than 90 percent of Innkeepers’ unsecured creditors and shareholders, clears the way for Innkeepers to emerge from Chapter 11.
Innkeepers’ Chief Restructuring Officer, Marc A. Beilinson said that the reorganization plan confirmed by the Court provides maximum recovery to the Company’s creditors while ensuring the continued viability of the hotel properties. “Ensuring our secured and unsecured creditors would receive the greatest possible recovery, while at the same time preserving the value of the hotel properties, was our key objective as we examined the various restructuring alternatives available. The Plan of Reorganization confirmed today fulfills these goals and is a great result for our creditors, franchisors, guests and employees.”
The Company also noted that throughout its restructuring process, Innkeepers has maintained normal business operations at all of its properties, including completing substantial work on the property improvement plans required by franchisors on time and under budget, as well as having successfully maintained its supportive relationships with its franchisors.
The Company’s plan of reorganization is the result of an extensive marketing process which increased Innkeepers’ enterprise value by approximately $150 million. Under the terms of the plan:
“Given the fact that in 2010 the hospitality industry was still experiencing one of the most challenging operating environments in its history as well as the sluggish economic recovery, the successful restructuring of this company and the preservation of 3,500 jobs is a truly remarkable achievement,” Mr. Beilinson said. “The significant progress we have made during our restructuring is the result of a great deal of hard work from all involved. We are grateful to our creditors who worked with us to achieve a consensual resolution as well as the loyalty our franchisors and suppliers demonstrated during this challenging time.”
The Company is working diligently to effectuate the transaction outlined in the plan, including closing the sales transactions to Chatham Lodging and the joint venture. The Company expects that the transactions will close in short order.