Cerberus, Innkeepers reportedly reach settlement

Innkeepers USA Trust and Cerberus Capital Management have reportedly reached a settlement on their scuttled US$1.1 billion hotel purchase deal.

Bloomberg reported on Monday that two people familiar with the matter said that the companies have agreed to go ahead with the purchase of 64 hotel properties for a reduced price. However, the deal remains tentative after negotiations through the past weekend.

The Innkeepers USA bankruptcy trial, in which the company is trying to persuade a judge to force the purchase to go through, is scheduled to resume on Tuesday. In the suit, Cerberus and Chatham are alleged by Innkeepers to have terminated the deal as a negotiating tactic for a lower price on the properties. Innkeepers argues that the buyers must finalize the deal as agreed or pay substantial damages. Cerberus said the lawsuit is without basis.

Cerberus and Chatham Lodging Trust pulled out of the joint purchase in August, citing a “material adverse event” clause. Pre-trial documentation revealed that Cerberus cited the weakening U.S. economy as the determinant of the decision to invoke the clause.