HAYNES AND BOONE, LLP 1221 Avenue of the Americas, 26th Floor New York, New York 10020

Telephone: (212) 659-7300 Facsimile: (212) 884-8211 Lenard M. Parkins (NY Bar # 4579124) John D. Penn (pro hac vice pending) Mark Elmore (pro hac vice pending) Attorneys for Midland Loan Services, Inc. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al., Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

MOTION OF MIDLAND LOAN SERVICES, INC., SPECIAL SERVICER FOR THE FIXED RATE TRUSTEE, FOR AN ORDER PURSUANT TO FED. R. BANKR. P. 7034 AND 9006, MODIFYING CERTAIN DISCOVERY RESPONSE DEADLINES FOR THE DEBTORS AND ESTABLISHING A DEPOSITION SCHEDULE IN CONNECTION WITH THE SEPTEMBER 1, 2010 HEARINGS Midland Loan Services, Inc. (Midland), special servicer pursuant to that certain pooling and servicing agreement dated as of August 13, 2007 (the Special Servicing Agreement) for the Fixed Rate Trustee (as defined below), hereby files this Motion (the Motion) for an order pursuant to Fed. R. Bankr. P. 7034 and 9006 modifying certain discovery response deadlines for the above referenced debtors and debtors-in-possession (collectively, the Debtors or Innkeepers) and establishing a deposition schedule in connection with the September 1, 2010 hearings and respectfully represents the following:

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I. JURISDICTION AND VENUE 1. This Court has jurisdiction over the subject matter of the Motion pursuant

to 28 U.S.C. 157 and 1334(b) and the standing order of reference of the district court. This matter is a core proceeding. 28 U.S.C. 157(b)(1), (b)(2)(A). 2. Venue in this Court is proper under 28 U.S.C. 1409(a). II. BACKGROUND 3. On July 19, 2010 (the Petition Date), the Debtors filed voluntary

petitions for relief under Chapter 11 of the Bankruptcy Code and initiated the abovecaptioned chapter 11 cases. 4. Midland services and administers that certain secured loan in the amount

of not less than $825,402,542 plus interest, costs and fees (the Fixed Rate Mortgage Loan)1 owed by certain of the above referenced Debtors. The Fixed Rate Mortgage Loan is secured by forty-five (45) hotels and other property, including property constituting Midlands cash collateral generated from the hotel operations. Midland is the largest secured creditor of the Debtors. 5. On the Petition Date, the Debtors filed their Motion for Order (A)

Authorizing the Debtors to (i) Use the Adequate Protection Parties Cash Collateral and (ii) Provide Adequate Protection to the Adequate Protection Parties Pursuant to 11 U.S.C. 361, 362, and 363 and (B) Scheduling a Final Hearing Pursuant to Bankruptcy Rule
1

The Fixed Rate Mortgage Loan was made pursuant to that certain loan agreement dated as of June 29, 2007 (as amended, the Fixed Rate Mortgage Loan Agreement), and is evidenced by (i) a certain Replacement Note A-1 and (ii) a certain Replacement Note A-2, each dated as of August 9, 2007, and each in the original principal amount of $412,701, 271. Replacement Note A-1 was assigned to LaSalle Bank National Association as trustee for the holders of the LB-UBS Commercial Mortgage Trust 2007-C6. Bank of America, N.A. is the successor-in-interest to LaSalle Bank National Association (the Fixed Rate Trustee). Replacement Note A-1 is currently held by the Fixed Rate Trustee. Replacement Note A-2 was assigned to and is currently held by the trustee for the holders of the LB-UBS Commercial Mortgage Trust 2007-C7.

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4001(b) (the Cash Collateral Motion). Midland objected to the interim hearing on the Cash Collateral Motion, and the Court has set a final hearing on the Cash Collateral Motion for September 1, 2010. 6. Also on the Petition Date, the Debtors filed the Motion for an Order (A)

Authorizing the Debtors to Assume the Plan Support Agreement and (B) Granting Related Relief (the PSA Motion). Pursuant to the PSA Motion, the Debtors seek authorization to assume that certain Plan Support Agreement (the PSA) by and between the Debtors and Lehman ALI, Inc. (Lehman). The PSA embodies Lehmans support of a proposed plan of reorganization that will provide for i) the cramdown of the Debtors secured creditors (other than Lehman); ii) Lehman obtaining a portion of the equity in the reorganized debtors; and iii) upon information and belief, Apollo Investment Corporation (Apollo), the Debtors out of the money ultimate parent, receiving a substantial portion of the new equity in the reorganized debtors. As described in the PSA, the Debtors propose to satisfy Midlands $825 million secured claim with a note to be valued at not more than $550 million. At its essence, the PSA contemplates Midland taking a nearly $300 million haircut while allowing Apollo to obtain (or retain) equity in the reorganized debtors pursuant to what is, in effect, a new value plan without the necessary and required exposure of the Debtors assets to the market. A final hearing has also been set on the PSA Motion for September 1, 2010. 7. Midland objected to the interim hearing on the Cash Collateral Motion and

the PSA Motion and opposes i) the use of Midlands cash collateral; ii) the proposed cramdown of Midlands secured claim; and iii) Apollos receipt of any distribution under the plan of reorganization described in the PSA. Midland will propound discovery on the Debtors, Apollo & Lehman in connection with the Cash Collateral Motion and the PSA

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Motion, including but not limited to, document requests pursuant to Rule 7034 of the Federal Rules of Bankruptcy Procedure (Midlands Document Request). A copy of Midlands Document Request is attached hereto as Exhibit A. 8. On July 27, 2010, Midland provided a draft copy of Midlands list of

requested documents and proposed deposition dates for their respective clients to counsel for the Debtors, Apollo and Lehman and engaged in discussions with each partys counsel regarding shortening the time period for them to respond to Midlands requests for documents. Midland has not reached an agreement with the Debtors, Apollo or Lehman with respect to the production of the documents or the scheduling of depositions in connection with the September 1 hearings. IV. RELIEF REQUESTED AND BASIS THEREFOR 9. Pursuant to Rules 7034 and 9006 of the Federal Rules of Bankruptcy

Procedure, Midland requests that the Court reduce the time period for the Debtors to respond to Midlands Document Request to August 6, 2010. Additionally, Midland seeks to establish a schedule for conducing certain depositions of representatives of Lehman, Apollo and the Debtors in connection with the September 1, 2010 hearing. Midland seeks entry of an order substantially in the form annexed hereto as Exhibit B (the Proposed Order). A. Deadline to Respond to Midlands Document Request Should be Modified 10. Rule 34 of the Federal Rules of Civil Procedure provides that the Court

may order a shorter time period to respond to a document request than the thirty (30) days normally required by the rule. Fed. R. Civ. P. 34(b)(2)(A) (as incorporated through Fed. R. Bankr. P. 7034). Additionally, Rule 9006 of the Federal Rules of Bankruptcy

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Procedure provides that when an act is required or allowed to be done at or within a specified time by these rules or by a notice given thereunder or by order of court, the court for cause shown may in its discretion with or without motion or notice order the period reduced. Fed. R. Bankr. P. 9006. 11. On September 1, 2010 (the September 1 Hearing), the Court will

consider the Cash Collateral Motion and the PSA Motion. As previously mentioned, the PSA contemplates Midland taking a nearly $300 million haircut while allowing Apollo to obtain (or retain) equity in the reorganized debtors pursuant to what is, in effect, a new value plan without the necessary and required exposure of the Debtors assets to the market. Further, the Debtors intend to use Midlands cash collateral to perpetuate the plan proposed in the PSA Motion to Midlands detriment. The Courts determination of both the Cash Collateral Motion and the PSA Motion will critically impact Midland. 12. To prepare for the September 1 Hearing, Midland will serve Midlands

Document Request and subpoenas take depositions of various representatives and agents of the Debtors, Apollo, and Lehman. The deadline for Midland to file objections with respect to the matters set for the September 1 Hearing is August 20, 2010. If the time period for the Debtors to respond to Midlands Document Request is not shortened as requested herein, the Debtors would not be required to respond with the requested documents until after Midland is required to file any objection to the matters set for the September 1 Hearing. To provide sufficient time to review and analyze the documents requested under Midlands Document Request, conduct the necessary depositions, and incorporate the information obtained through Midlands Document Request and the related depositions duces tecum in any objection to be filed prior to the August 20, 2010

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deadline, the time period for responding to Midlands Document Requests must be shortened. 13. Midland should not be required to wait the full thirty (30) days for the

Debtors to respond to Midlands Document Request. There were barely thirty (30) days between when the Debtors filed the Cash Collateral Motion and the PSA Motion and the deadline for Midland to object. Additionally, the Debtors, Apollo and Leman each received a draft of Midlands list of requested documents before this Motion was filed and, presumably, are already at work on assembling the documents. Finally, the Debtors and Lehman not Midland - dictated that the Courts consideration of the substantial relief associated with the Cash Collateral Motion and the PSA Motion occur at such an early stage in these cases, so the Debtors should not complain about Midlands request for expedited discovery.2 Lehman is a party to the PSA and its pleadings indicate it ahs an agreement regarding the PSA with the Debtors. B. Expedited Deposition Schedule Should be Established 14. In connection with the September 1, 2010 Hearing, Midland intends to take the following depositions, issue Notices of Deposition and issue subpoena duces tecum (as applicable) on the following schedule: (a) Rule 30(b)(6) Deposition of Apollo August 9, 2010 at 9:00 a.m. (b) Deposition of Patrick Dalton August 9, 2010 at 9:00 a.m. (c) Deposition of James Zelter August 9, 2010 at 9:00 a.m. (d) Rule 30(b)(6) Deposition of Lehman August 10, 2010 at 9:00 a.m. (e) Deposition of Nancy Shanik August 10, 2010 at 9:00 a.m.

Apollo , as the Debtors ultimate parent and which reportedly has agreements with Lehman regarding the PSA, should likewise not campaign against expedited relief.
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(f) Deposition of Michael Lascher August 10, 2010 at 9:00 a.m. (g) Deposition of Susanne Frey August 10, 2010 at 9:00 a.m. (h) Rule 30(b)(6) Deposition of the Debtors August 11, 2010 at 9:00 a.m. 15. The proposed schedule is reasonable considering the August 20, 2010 objection deadline for the September 1 Hearing. VI. WAIVER OF MEMORANDUM OF LAW 16. Because this Motion presents no novel issues of law and the authorities

relied upon by Midland are set forth herein, Midland respectfully requests that the Court waive the requirement for the filing of a separate memorandum of law in support of this Motion pursuant to L.B.R. 9013-1(b). Midland reserves the right to file a memorandum in reply to any objection to this Motion. WHEREFORE, Midland respectfully requests that the Court enter the Proposed Order modifying the time period for the Debtors to respond to Midlands Document Requests and grant Midland such other relief as is just and proper. Dated: July 29, 2010 New York, New York /s/ Lenard Parkins_ HAYNES AND BOONE, LLP 1221 Avenue of the Americas, 26th Floor New York, New York 10020 Telephone: (212) 659-7300 Facsimile: (212) 884-8211 Lenard M. Parkins (NY Bar# 4579124) John D. Penn (pro hac vice pending) Mark Elmore (pro hac vice pending) ATTORNEYS FOR MIDLAND LOAN SERVICES, INC.

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al., Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

ORDER MODIFYING CERTAIN DISCOVERY RESPONSE DEADLINES FOR THE DEBTORS AND ESTABLISHING A SCHEDULE FOR DEPOSITIONS IN CONNECTION WITH THE SEPTEMBER 1, 2010 HEARING The Court has considered the Motion for an order pursuant to Fed. R. Bankr. P. 9006 modifying certain discovery response deadlines for the above referenced debtors and establishing a schedule for depositions in connection with the September 1, 2010 hearing (the Motion) filed by Midland Loan Services, Inc. (Midland). Notice of the Motion is sufficient. The relief requested in the Motion is appropriate. Accordingly, it is ORDERED: 1. 2. The Motion is GRANTED. The time period for the Debtors to respond to Midlands Document

Request is shortened as provided for herein.3 3. The Debtors are ordered to respond to Midlands Document Request on or

before 4:00 p.m. (prevailing eastern time) on August 6, 2010. Documents responsive to Midlands Document Request shall be produced to the offices of Haynes and Boone, LLP 1221 Avenue of the Americas, New York, New York 10020. 4. The following deposition schedule is established in connection with the

September 1 Hearing: (a) Rule 30(b)(6) Deposition of Apollo August 9, 2010 at 9:00 a.m.
3

Capitalized terms not otherwise defined shall have the meaning given in the Motion.

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(b) Deposition of Patrick Dalton August 9, 2010 at 9:00 a.m. (c) Deposition of James Zelter August 9, 2010 at 9:00 a.m. (d) Rule 30(b)(6) Deposition of Lehman August 10, 2010 at 9:00 a.m. (e) Deposition of Nancy Shanik August 10, 2010 at 9:00 a.m. (f) Deposition of Michael Lascher August 10, 2010 at 9:00 a.m. (g) Deposition of Susanne Frey August 10, 2010 at 9:00 a.m. (h) Rule 30(b)(6) Deposition of the Debtors August 11, 2010 at 9:00 a.m. 5. The provision of Rule 9013-1(b) of the Local Bankruptcy Rules for the

Southern District of New York requiring the filing of a memorandum of law is waived. Dated: New York, New York ____ ___ , 2010

_______________________________________ UNITED STATES BANKRUPTCY JUDGE

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