Lodgian, Inc. voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code in Federal Court in New York yesterday.
The filing was precipitated by the weaker U.S. economy, the decline in travel since the events of September 11, and the company`s heavy debt load. Lodgian, Inc. and most of its operating subsidiaries were included in the filing. The company announced that it has received a commitment for up to $25 million for debtor-in-possession financing, subject to court approval, from a group of lenders led by Morgan Stanley and Lehman Brothers, Inc. This financing will allow the company to operate in the normal course during the bankruptcy proceedings.
David E. Hawthorne, the company`s CEO since October 1, 2001, said: “The Chapter 11 filing brings us closer to completing the operating and financial restructuring begun by the company in June, 2001. We intend to emerge from bankruptcy in 2002 with strong prospects for revenue and earnings growth. We appreciate the continued support of our many vendors, employees and lenders.”
Lodgian, Inc. is one of the largest owner/operators of full and mid-priced hotels in the United States, with 106 hotels located in 32 states and one hotel in Windsor, Canada. The company operates hotels under nationally recognized hospitality franchises such as Marriott, Holiday Inn, Hampton Inn, Sheraton and Radisson.