Innkeepers USA Trust exclusivity termination motions withdrawn

By Caroline Salls

Pittsburgh, Nov. 12 - Midland Loan Services, Inc. and property lender trustee Wells Fargo Bank, NA have withdrawn their motions to terminate Innkeepers USA Trust's exclusivity, according to filings with the U.S. Bankruptcy Court for the Southern District of New York.

Innkeepers' exclusive plan of reorganization filing and vote solicitation periods were extended last week.

As previously reported, Midland asked the court to "level the playing field" in late August and terminate Innkeepers USA Trust's exclusivity to allow for the filing of "a different, market-driven plan."

Midland said it was approached by Five Mile Capital II Pooling REIT LLC, an affiliate of Five Mile Capital Partners LLC, with a commitment to fund $236 million of new money as a basis for a proposed plan of reorganization.

Wells Fargo subsequently asked the court to terminate Innkeepers' exclusivity in September to allow the property level lenders to file a competing plan.

Both Midland and Wells Fargo took issue with the company's willingness to enter into a plan support agreement with lender Lehman ALI, Inc.

Innkeepers USA, a Palm Beach, Fla., hotel real estate investment trust, filed for bankruptcy on July 19. The Chapter 11 case number is 10-13800.

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