Italy president mandates foreign minister to form new government
ROME, Dec 11 Italy's president on Sunday gave Foreign Minister Paolo Gentiloni a mandate to try to form the country's new government.
* Trial over failed $1.12 bln deal postponed to Tuesday
* Innkeepers says in settlement talks to avoid trial
* New deal would lower purchase price -- source
By Nick Brown
NEW YORK, Oct 10 Innkeepers USA Trust said it is in settlement talks to avoid a trial over the collapse of a planned $1.12 billion deal with Cerberus Capital Management LP and Chatham Lodging Trust.
The trial had been expected to start Monday in U.S. Bankruptcy Court in Manhattan, but was postponed until Tuesday. Innkeepers said if a resolution is not reached, it will be ready for trial on Tuesday.
Innkeepers, the bankrupt operator of 72 hotels under the Hilton, Marriott and other brands, sued CerberusChatham in August after the firms backed out of a joint venture agreement to buy 64 of Innkeepers' properties.
Cerberus and Chatham invoked a "material adverse event" clause in the deal that allowed them to walk away if something happened that could materially alter Innkeepers' business.
Innkeepers Chief Restructuring Officer Marc Beilinson said on Monday a settlement had not yet been reached and the trial would proceed if the sides could not reach agreement by the end of the day.
"Innkeepers will be fully prepared to proceed with litigation," Beilinson said in a statement.
A source close to the talks told Reuters discussions began over the weekend and that the sides had exchanged proposals and were far along in the process. The deal would feature a reduction in the purchase price, said this person, who spoke anonymously on details of a possible settlement because the talks are private.
A spokesman for Cerberus could not immediately be reached on Monday. An attorney for the company declined to comment. A lawyer for Chatham did not return a call seeking comment.
Innkeepers filed for bankruptcy protection in July 2010, saying its debt load made it too difficult to keep up its properties.
The invocation of the "material adverse event" clause sent chills through the hotel industry and contributed to fears of a double-dip recession. In pretrial court filings, Innkeepers said its buyers used the clause as a pretext to negotiate a lower price.
It said its business was stable and its hotels had performed "at or near budget" and it sought to force the buyers to close on the sale.
Cerberus and Chatham said downgrades in the lodging sector, weakening hotel asset sales, and a 30 percent to 40 percent decline in the stocks of competing hotel operators contributed to their decision to walk away from the deal.
Judge Shelley Chapman had agreed to open her courtroom on Monday despite the Columbus Day holiday after Innkeepers pushed for a quick trial in hopes of getting back on its feet in time to maximize its sale value.
But spectators who showed up at the courthouse on Monday morning were turned away at the door by court officials, who said the trial had been pushed back. Official court filings announcing the delay were not published until late on Monday morning.
The case is Innkeepers USA Trust et al v. Cerberus Series Four Holdings LLC et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-2557.
The Innkeepers bankruptcy is In re Innkeepers USA Trust, in the same court, No. 10-13800.
KUWAIT, Dec 11 Cutting public spending has become inevitable because of the sharp drop in oil prices, Kuwait's emir on Sunday told a new parliament that was elected partly by voters protesting against austerity policies.
LONDON, Dec 11 Financial markets have been remarkably resilient to rising bond yields and sudden shift in outlook following last month's shock U.S. election result, but the sheer scale of uncertainties ahead means the adjustment will be "bumpy", the BIS said on Sunday.