Innkeepers USA Files for Chapter 11

 FT. LAUDERDALE, FL-Palm Beach-based Innkeepers USA Trust, owner of upscale, extended-stay properties throughout the US, filed for Chapter 11 bankruptcy protection on Monday after reaching agreements with its creditors. The company, which filed in the US Bankruptcy Court in the Southern District of New York, owns interests in 72 hotels in 19 states and Washington, DC.

The agreements with creditors will allow Innkeepers to maintain its portfolio. As of yesterday, the company had incurred $1.29 billion of secured debt. The debtor’s largest secure loan is a securitized mortgage from Lehman ALI, Inc., a subsidiary of Lehman Brothers Holdings Inc. The loan, with a face amount of $825 million, is collateralized by 45 of Innkeepers’ hotels. Under the agreement reached before Innkeepers filed bankruptcy, Lehman ALI, Inc. will assume ownership of the company in exchange for forgiving $238 million in debt. Lehman itself is still going through the bankruptcy process.