The Real Deal Miami

Lehman’s hotel REIT files for bank

July 20, 2010 03:00PM

A major hotel real estate investment trust and subsidiary of Lehman Brothers Holdings has filed for bankruptcy protection in New York, after buckling under $1.42 billion in debt, according to the Wall Street Journal. Innkeepers USA Trust currently owns more than 70 hotels across 19 states, many of which ran under widely known brand names like Marriott, Hyatt and Hilton. The Palm Beach, Fla.-based REIT aims to eliminate around $700 million worth of debt through the bankruptcy, experts say. The news comes on the heels of a rocky relationship with one of its brands, Marriott, which threatened to remove its name from 23 hotels in the REIT due to a perceived lack of upkeep. Innkeepers and Marriott ultimately struck a deal on June 25. [WSJ]