Bankruptcy court rejects examiner for Innkeepers

By Tom Hals

WILMINGTON, Delaware (BestGrowthStock) – A judge rejected a request for an examiner in the bankruptcy of the U.S. hotel chain Innkeepers USA Trust (INKPQ.PK: ), according to court documents filed on Tuesday.

The judge also denied a request by preferred shareholders for an official committee, which would have required the company to pay some of their expenses.

The examiner was sought to investigate moves by the company’s controlling shareholder, Apollo Investment Corp (AINV.O: ), which enabled it to retain an ownership stake while wiping out preferred shareholders, who have a higher priority claim.

The preferred shareholders include Brencourt Advisors, Esopus Creek Advisors and Plainfield Special Situations Master Fund II.

Both requests were opposed by the company, the official committee of unsecured creditors and other parties to the bankruptcy.

U.S. Bankruptcy Judge Shelley Chapman in Manhattan said the ad hoc committee of preferred shareholders did not need an examiner to conduct an investigation, which could be done by the official committee of unsecured creditors.

The judge directed the creditors’ committee to share documents and allow the preferred shareholders to participate in depositions relating to its investigation.

The case is In re Innkeepers USA Trust, U.S. Bankruptcy Court, Southern District of New York, No. 10-13800.

Bankruptcy court rejects examiner for Innkeepers