Sniff test 1 – Bankruptcy court to reduce loan balances? –  A bankruptcy court proposal to cut $300 million owed to Innkeepers USA Trust’s securitized lenders is creating major national fear.  Holders of commercial mortgage-backed securities (CMBS) worry that approval of the hotel company’s plan would set a precedent and make them more vulnerable nationally to bankruptcy court judges writing down their loans. Usually, CMBS holders would rather negotiate modifications or just get properties back.

Under the plan, another Innkeepers’ lender, Lehman Bros., would get fully repaid on its $238 million debt and get a stake in the Palm Beach hotel company. Lehman, whose spectacular 2008 bankruptcy was a pivotal event in the U.S. financial meltdown, would also agree to provide $17 million out of $67.75 million in new money for renovations.    A ruling in favor of Innkeepers would encourage other real estate companies with large portfolios to use bankruptcy courts to force write-downs, said Derrick Gruner, a partner at Miami-based Pinkert Law who represents lenders with troubled loans.   Read more: Innkeepers bankruptcy raises alarm – South Florida Business Journal

Sniff test 2 – Jeffrey H. Fisher to form new company to manage Innkeepers assets -, formerly the president of Innkeepers USA Trust, has established two companies to develop, acquire and operate hotels.  The real estate investment trust was acquired by affiliates of Apollo Investment Corporation in late June.  Both new companies will be based in Palm Beach, Fisher said.

Fisher Property Group is to be property ownership group that will develop and acquire hotels. Fisher said the company has made alliances with institutional investors and has significant capital available to develop and acquire hotels.  ”Our focus will be on extended-stay, particularly the Residence Inn and Homewood Suites brands, and we are looking at the new offerings by Hyatt and Starwood,” Harris said.

The second company, Island Hospitality Management, is to be a third-party management company that will operate the 79 hotels previously managed by Innkeepers Hospitality and all hotels acquired or developed by Fisher Property Group.    Read more: Former Innkeepers USA CEO forms new companies – South Florida Business Journal