Innkeepers USA Trust and 91of its subsidiaries filed for bankruptcy protection Monday.
“Innkeepers took this action to preserve and enhance the value of the company and de-leverage our balance sheet,” the company, a real estate investment trust, said. “This filing allows Innkeepers to continue operating as normal while we reduce the debt. On a day-to-day basis, it is going to be business as usual.”
The company’s restructuring plan would help Innkeepers keep its portfolio of properties as debtors-in-possession. The company has stakes in 73 hotels in 19 states -- including the Hampton Inn Islandia -- and the District of Columbia. Innkeepers said it received commitments for about $67 million in debtor-in-possession financing, which it will invest primarily in property improvement projects.
The reorganization plan would also convert $238 million in senior loans held by Lehman ALI Inc., a unit of Lehman Brothers Holdings Inc., into equity.
Terms of the reorganization plan and the Lehman debt-for-equity swap must be approved by bankruptcy court judges overseeing Innkeepers' and Lehman Brothers' cases.
The company, based in Palm Beach, Fla., and its affiliates in bankruptcy owe creditors more than $1 billion, according to Chapter 11 documents filed in U.S. Bankruptcy Court in the Southern District of New York.
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