Innkeepers’ Sale Of Properties Received Court Confirmation

by San Antonio Attorney

Innkeepers’ stage of bankruptcy exit has been laid down as its USA Trust’s proposal to sell off the majority of it hotels for $1.12 billion was given a tentative confirmation by a judge on Thursday.

U.S. Bankruptcy Court Judge Shelley Chapman endorsed the sale plan, which had the approval of most of its creditors after several objections were resolved.

According to Chapman, she hoped that by Friday or Monday it will finally enter an official confirmation.

The hotel operator is going to sell 64 of its hotels to Cerberus Capital Management LP and Chatham Lodging Trust, which won in the auction of the properties in May. They were able to beat the $971 million bid of Lehman Ali Inc and Five Mile Capital Partners.

Chatham unit is also going to get five more properties for $195 million and the three remaining properties will be handled separately.

Innkeepers, owned by Apollo Investment Corp. and operator of hotels such as Hyatt, Marriott, and Hilton, filed for Chapter 11 bankruptcy in July 2010 due to its enormous debt which made it very hard to maintain its properties.

The hotel buyers are going to pay $400 million cash and also assume mortgages debt which is approximately $720 million. The cash payment is going to be used to partially pay a priority debt claim worth $220 million by Lehman Ali, the Innkeepers’ holder of mortgages that have floating interest rates.

The assumed debt is going to be used to take upon the obligations of the majority of the mortgages that have fixed interest rates. The mortgages had been serviced by Midland Loan Services.

The hearing on Thursday was supposed to start at 10 a.m. but was delayed in the late afternoon as the Innkeepers’ attorneys and its creditors worked through the sale plan objections.

Just like the Innkeepers’ USA Trust’s proposal to sell properties, a trustee will also sell off a debtor’s assets under Chapter 7 bankruptcy.  A San Antonio attorney can help you determine whether or not you can keep a particular possession under Chapter 7 bankruptcy.

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