Innkeepers USA filed a lawsuit against Cerberus Capital Management LP on Monday for abandoning its US$1.12 billion deal to buy 64 hotel properties.
In the suit Cerberus is alleged to have terminated the deal as a negotiating tactic for a lower price on the properties, and argues that Cerberus must finalize the deal as agreed or pay substantial damages.
Cerberus said the purchase, a joint venture between it and Chatham Lodging Trust, was terminated in accordance with a clause in the buyout contract allowing the deal to be scuttled “as a result of the occurrence of a condition, change or development that could reasonably be expected to have a material adverse effect on Innkeepers’ business.”
Cerberus also asking for the US$20 million deposit for the deal to be returned.