Lodgian's subsidiary's reorganization confirmed, will exchange payment for hotels held by lenders

By Carlise Newman

Chicago, April 25 - Lodgian, Inc.'s subsidiary Impac Hotels had its plan of reorganization confirmed Friday by the U.S. Bankruptcy Court for the Southern District of New York. Terms of the plan include releasing 18 hotels held as collateral by a lender in exchange for payment.

The 18 hotels covered by the Impac plan are secured by a financing obtained prior to the bankruptcy filing from a single lender, which has a $109 million claim against the Impac debtors.

The plan calls for the lender to release the hotel collateral in exchange for payment of an agreed-upon amount on the effective date of the plan, which is to occur before May 31. If the payment is not made by that date, the 18 hotels will be returned to the lender in satisfaction of outstanding mortgage obligations.

Other terms of the plan include provision that the Impac debtors would form 18 new subsidiaries and would obtain financing from Lehman Brothers Holdings Inc. to pay the lender. Lodgian said it is in negotiations with Lehman Brothers regarding the financing.

Lodgian emerged from Chapter 11 on Nov. 25, 2002.

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