Cerberus Capital Management LP said economic instability triggered its decision to end a $1.12 billion purchase deal with bankrupt hotel operator Innkeepers USA Trust (INKPQ.PK). Responding to a lawsuit filed by Innkeepers in U.S. Bankruptcy Court in Manhattan, Cerberus said "unforeseeable" turmoil in the markets impacted Innkeepers' business, triggering a clause in the deal's contract allowing it to end the purchase. The response, filed late Friday, was Cerberus' first public explanation for invoking the "material adverse effect" clause to scuttle the pact. Innkeepers, which had agreed to sell 64 hotels under brand names like Hilton, Hyatt and Marriott, sued Cerberus and its joint venture partner on the deal, investment firm Chatham Lodging Trust (CLDT.N), saying they backed out without explaining why.
Chatham Lodging Trust is a hotel investment company. Shares of CLDT fell by 1.68% or $-0.16/share to $9.36. In the past year, the shares have traded as low as $9.38 and as high as $19.46. On average, 84192 shares of CLDT exchange hands on a given day and today's volume is recorded at 26754.
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