After terminating their initial $1.12 billion agreement to acquire stakes in 64 hotels owned by bankrupt Innkeepers USA Trust, Cerberus Capital Management and Chatham Lodging Trust have reached a new tentative agreement to buy the business at a reduced price, according to a report by Reuters.
As part of the new agreement, the New York-based private equity firm and the Palm Beach, Florida-based hotel REIT would acquire the bankrupt hotel operator's 64 properties for roughly $1 billion. At press time, Cerberus, Chatham and Innkeepers could not be reached for comment.
The new agreement would avoid a trial scheduled for next week over a decision by Cerberus and Chatham to walk away from their initial agreement. That agreement, made on 16 May, was terminated in August due to what the two buyers termed an “adverse effect on the business.”
As a result of backing out of the deal, Innkeepers filed a lawsuit against Cerberus and Chatham, seeking to force the buyers to close on the sale. The lawsuit initially was slated for trial last Monday, but the two sides delayed opening arguments four times as a last-minute settlement was negotiated.
The new purchase price, while lowered than the initial agreement, still would be higher than the $971 million stalking horse bid offered by Five Mile Capital Partners and Lehman Ali, a non-bankrupt unit of Lehman Brothers Holdings.