UPDATE 2-Bankruptcy court rejects examiner for Innkeepers

* Examiner, committee requests denied

* Unsecured creditors told to share information
(Adds background about the request for an examiner in
paragraphs three and four)

By Tom Hals

WILMINGTON, Del., Oct 19 (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.

UPDATE 2-Bankruptcy court rejects examiner for Innkeepers