Lugar de Noticias Haynes and Boone
John Penn Cites Win for Lehman creditor Midland Loan Services LP
A bankruptcy judge has shot down a bid by Innkeepers USA Trust to enter into a debt-for-equity swap with a Lehman Brothers Holdings Inc. affiliate and Apollo Global Management LLC, a decision that comes after creditors objected to the deal's fairness.
Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York on Wednesday denied the debtors' request to enter into a pooling and servicing agreement under which Innkeepers proposed to hand over all of its equity to Lehman Ali Inc., according to Haynes and Boone LLP partner John D. Penn, who represents Lehman creditor Midland Loan Services LP.
The agreement proposed a quick restructuring mainly by converting a $238 million Lehman claim into an equity stake.
Ownership of Innkeepers would be split between Lehman Brothers and Apollo, the current equity owner of the company.
Midland, a special servicer administering $825.4 million in secured debt, had voiced concerns that the deal could unfairly benefit Apollo, which was set to receive half of the equity stake Lehman would receive from the South Florida hotel investment firm under a side arrangement to the proposed swap.
Innkeepers owns and operates more than 70 hotels under brands including Marriott, Hilton and Hyatt. The case is In re: Innkeepers USA Trust et al., case number 10-13800, in the U.S. Bankruptcy Court for the Southern District of New York.
Excerpted from Law360. To view the full article, click here.