NEW YORK - Innkeepers USA Trust, an operator of Residence Inns, Marriott hotels, and Hampton Inns, has sued Cerberus Capital Management LP and Chatham Lodging Trust, saying its agreement to sell 64 hotels to Cerberus and Chatham can’t be called off due to market conditions or a change in its business.
The operator of 71 hotels is seeking to exit bankruptcy. The lawsuit, filed in US Bankruptcy Court in Manhattan yesterday, says there has been no change in Innkeepers’ business since a binding agreement was signed May 16.
“General market volatility is wholly irrelevant here,’’ lawyers for Innkeepers wrote.
Innkeepers said the attempt to terminate the deal is a “calculated effort to apply leverage’’ to renegotiate the terms. The lawsuit seeks to hold Cerberus and Chatham to their commitment, plus damages of potentially more than their $20 million deposit.
Innkeepers won final court approval of a Chapter 11 reorganization plan June 29 that rested on the sale to Cerberus and Chatham. Cerberus and Chatham said Aug. 22 that they had ended the $1.1 billion agreement, citing a possible adverse change that could affect Innkeepers’ long-term business. They did not state what the change was.
Innkeepers, based in Palm Beach, Fla., has properties with 10,000 rooms in 20 states. Chatham is a Palm Beach-based hotel investment company. Cerberus, a New York private equity investor, owns the Steward Health Care System in Massachusetts.
Innkeepers’ initial Chapter 11 petition listed assets of $1.5 billion against debt totaling $1.52 billion.