Innkeepers fighting return of $20 million deal deposit

Innkeepers USA Trust is objecting to a demand from Cerberus Capital Management LP and Chatham Lodging Trust to recover a US$20 million deposit for their now disputed plan to acquire 64 of the bankrupt company’s hotels, Bloomberg is reporting.

Cerberus and Chatham have requested that 90% of the deposit be returned to Cerberus and 10% be returned to Chatham.

Innkeepers is objecting to both the request to return the deposit and the JV’s desire to pull out of the deal based on changing market conditions having a “material adverse effect” on the business.

As a result of the objections, Wells Fargo must keep the money until a court rules on the dispute, Innkeepers said.

Separately, Bloomberg is reporting that Innkeepers creditor, Midland Loan Services, questioned a request for fees from Innkeepers bankruptcy counsel Kirkland & Ellis LLP, saying Innkeepers’ exit from bankruptcy was now uncertain.

Midland, servicer of an US$825 million mortgage loan, said Kirkland & Ellis’s request for US$1.6 million should be partially held back give uncertainties for all of Innkeepers’ interrelated reorganization plans.