A trial over Cerberus Capital Management LP’s decision to end a deal to buy 64 hotels from Innkeepers USA Trust was delayed for a third time.
The trial will begin tomorrow at 10 a.m. in U.S. Bankruptcy Court in Manhattan, according to court papers filed today. U.S. Bankruptcy Judge Shelley Chapman earlier told lawyers that the trial, set to begin today at 10 a.m., was pushed back to 4 p.m.
The start date was initially postponed from Oct. 10, when two people with knowledge of settlement talks said Cerberus might resolve the dispute by agreeing to buy the hotels at a lower price. Innkeepers sued after Cerberus, a New York-based private-equity firm, and Chatham Lodging Trust (CLDT) in August sought to cancel their $1.1 billion purchase.
The companies agreed to the sale in May and Innkeepers won approval of its reorganization terms in June. The company, in bankruptcy since July 2010, operates 71 hotels, including Residence Inns, Marriott hotels and Hampton Inns.
Cerberus cited a clause in the sale agreement allowing the buyers to back out if there was an adverse change in the lodging company’s business or overall economy.
The lawsuit against Cerberus is Innkeepers USA Trust v. Cerberus Four Holdings LLC, 11-02557, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The Chapter 11 case is In re Innkeepers USA Trust, 10-13800, in the same court.
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