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  • rollnon rollnon Jan 18, 2011 11:03 AM Flag

    AINV - Lehman, Innkeepers, WaMu, A&P, HSH, NEC: Bankruptcy

    Trying to discover what risk remains in the Innskeeper BK proceedings. The 2010 10K shows Preferred stock valued at 76.6 Million and common valued at 7 Million. The BK auction is scheduled to end in 3 months, but the recent announcement does not include AINV as a potential beneficiary of any of the proceeds or of any continuing equity. Any other data that members could provide that would estimate exposure would be greatly appreciated.

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    • Here's my take. This filing was an attempt by AINV to use Chapter 11 to take out the preferred stockholders while still keeping ownership of 50% of Innkeepers. The judge saw through that, however, and denied the proposed plan of reorganization. Now AINV will likely end up with nothing, which is exactly what they deserve for acting with such a lack of integrity. What they should have done was recapitalize Innkeepers with some of their undeployed capital, as the business is still technically very sound, if currently overleveraged. But then the pref stockholders would have been paid, and AINV management was obviously too greedy.

      The investment is has been written off on AINV's books for quite some time. Had they held on, there might well have been a slow but steady recovery to their NAV as the business recovers. Now there will not be, unless they can pull off a back-door transaction to reacquire part of the restructured Innkeepers after they emerge from Chapter 11.

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