July 28 (Reuters) - Lehman Brothers Holdings Inc said it agreed to sell 50 percent of the equity it would receive under Innkeepers USA Trust's reorganization plan to Apollo Investment Corp for at least $107.5 million.
The deal is yet to be approved by the bankruptcy court.
U.S. hotel owner Innkeepers filed for protection from creditors earlier this month under a pre-negotiated deal with Lehman Brothers' subsidiary Lehman ALI Inc.
Private equity firm Apollo currently owns Innkeepers but will be wiped out once the company emerges from bankruptcy and transfers ownership to Lehman, its secured creditor.
Under the agreement, Lehman will get 100 percent equity in the reorganized Innkeepers, plus full satisfaction of a $238 million secured claim.
Apollo bought Innkeepers at the height of the real estate market in 2007 and has already written down its original investment by 99 percent.
Apollo is managed by Apollo Investment Management, an affiliate of Apollo Global Management, the buyout firm run by investor Leon Black.
Lehman, which is also under bankruptcy protection, sought to provide $17.5 million in debtor-in-possession (DIP) financing to Innkeepers, court papers filed on Tuesday showed.
DIP financing helps companies fund operations while in bankruptcy.
Of Innkeepers' $1.29 billion of total secured debt, it owes Lehman a little more than $1.19 billion.
The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Santosh Nadgir in Bangalore; Editing by Unnikrishnan Nair) Keywords: LEHMAN/ (santosh.nadgir@thomsonreuters.com; within U.S +1 646 223 8780; Outside U.S +91 80 4135 5800; Reuters messaging: santosh.nadgir.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The deal is yet to be approved by the bankruptcy court.
U.S. hotel owner Innkeepers filed for protection from creditors earlier this month under a pre-negotiated deal with Lehman Brothers' subsidiary Lehman ALI Inc.
Private equity firm Apollo currently owns Innkeepers but will be wiped out once the company emerges from bankruptcy and transfers ownership to Lehman, its secured creditor.
Under the agreement, Lehman will get 100 percent equity in the reorganized Innkeepers, plus full satisfaction of a $238 million secured claim.
Apollo bought Innkeepers at the height of the real estate market in 2007 and has already written down its original investment by 99 percent.
Apollo is managed by Apollo Investment Management, an affiliate of Apollo Global Management, the buyout firm run by investor Leon Black.
Lehman, which is also under bankruptcy protection, sought to provide $17.5 million in debtor-in-possession (DIP) financing to Innkeepers, court papers filed on Tuesday showed.
DIP financing helps companies fund operations while in bankruptcy.
Of Innkeepers' $1.29 billion of total secured debt, it owes Lehman a little more than $1.19 billion.
The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Santosh Nadgir in Bangalore; Editing by Unnikrishnan Nair) Keywords: LEHMAN/ (santosh.nadgir@thomsonreuters.com; within U.S +1 646 223 8780; Outside U.S +91 80 4135 5800; Reuters messaging: santosh.nadgir.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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