Innkeepers USA Trust, a real estate investment trust based in Palm Beach, Fla., today filed a pre-arranged plan of reorganization under chapter 11 of the United States Bankruptcy Code after reaching agreements with certain creditors.
The agreements provide for a significant deleveraging of Innkeepers' balance sheet, and allow the REIT to maintain its portfolio of hotel properties. Among other things, these agreements contemplate Lehman ALI Inc., one of Innkeepers' largest pre-petition secured lenders, converting its secured claims to substantially all of the equity in the reorganized company.
Innkeepers has secured commitments for two debtor-in-possession credit facilities totaling approximately $67 million, which Innkeepers will invest in the improvement of its hotel portfolio.
The petition was filed in the United States Bankruptcy Court for the Southern District of New York. As a result of these arrangements, Innkeepers expects to emerge from its court-supervised restructuring in short order. The company said it is encouraged by its lenders' participation in the process; this will create an opportunity to work with all of its constituents to address its debt issues and internally reorganize its business.
