Hearing Date and Time: January 26, 2011 at 10:00 a.m.

prevailing Eastern Time Objection Deadline: January 21, 2011 at 4:00 p.m. prevailing Eastern Time

James H.M. Sprayregen, P.C. Paul M. Basta KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 and Anup Sathy, P.C. Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al.,1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

NOTICE OF DEBTORS MOTION FOR ENTRY OF AN ORDER AUTHORIZING THE (A) REJECTION OF (I) THE WEST PALM BEACH GROUND LEASE, (II) THE MEMBERSHIP AGREEMENT WITH BEST WESTERN INTERNATIONAL, INC., AND (III) OTHER EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED TO THE WEST PALM BEACH HOTEL, (B) DISPOSITION, DONATION, OR ABANDONMENT OF THE PROPERTY AT THE WEST PALM BEACH HOTEL, AND (C) MODIFIED NOTICE PROCEDURES RELATING TO THE ABANDONMENT1
1

The list of Debtors in these Chapter 11 Cases along with the last four digits of each Debtors federal tax identification number can be found by visiting the Debtors restructuring website at www.omnimgt.com/innkeepers or by contacting Omni Management Group, LLC at Innkeepers USA Trust c/o Omni Management Group, LLC, 16161 Ventura Boulevard, Suite C, PMB 606, Encino, California 91436. The location of the Debtors corporate headquarters and the service address for their affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, Florida 33480.

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PLEASE TAKE NOTICE that a hearing (the Hearing)2 for the relief requested in the above-referenced motion (the Motion) will be held before the Honorable Shelley C. Chapman, United States Bankruptcy Judge, in Courtroom No. 610 of the United States Bankruptcy Court for the Southern District of New York (the Court), Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004-1408, on January 26, 2011 at 10:00 a.m. prevailing Eastern Time or such other time as counsel may be heard. PLEASE TAKE FURTHER NOTICE that any objections to the Motion: (a) must be in writing; (b) shall conform to the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), all General Orders of the Court, the Local Rules for the United States Bankruptcy Court for the Southern District of New York, and the Notice, Case Management, and Administrative Procedures [Docket No. 68] (the Case Management Procedures) approved by the Court; (c) shall be filed with the Bankruptcy Court electronically by registered users of the Bankruptcy Courts case filing system (the Users Manual for the Electronic Case Filing System can be found at www.nysb.uscourts.gov, the official website for the Bankruptcy Court); and (d) shall be served so as to be actually received no later than January 21, 2011 at 4:00 p.m. prevailing Eastern Time by: (i) the entities on the Master Service List (as such term is defined in the Case Management Procedures), which is available at www.omnimgt.com/innkeepers, the website maintained by Omni Management Group, LLC, the Debtors notice and claims agent; (ii) Benenson Capital Company; (iii) ROFAR Realty Company, Inc.; (iv) Anand Enterprise, Inc.; (v) Anand Patel; and (vi) counsel for Best Western

All capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Motion.

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International, Inc. Only those objections that are timely filed, served, and received will be considered. PLEASE TAKE FURTHER NOTICE that, if no objections to the Motion are timely filed and served in accordance with this notice, the Court may enter an order granting some or all of the relief requested in the Motion as requested by the Debtors without further notice or hearing. New York, New York Dated: January 12, 2011 /s/ Paul M. Basta James H.M. Sprayregen, P.C. Paul M. Basta KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 and Anup Sathy, P.C. Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession

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Hearing Date and Time: January 26, 2011 at 10:00 a.m. prevailing Eastern Time Objection Deadline: January 21, 2011 at 4:00 p.m. prevailing Eastern Time

James H.M. Sprayregen, P.C. Paul M. Basta KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 and Anup Sathy, P.C. Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al.,1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

DEBTORS MOTION FOR ENTRY OF AN ORDER AUTHORIZING THE (A) REJECTION OF (I) THE WEST PALM BEACH GROUND LEASE, (II) THE MEMBERSHIP AGREEMENT WITH BEST WESTERN INTERNATIONAL, INC., AND (III) OTHER EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED TO THE WEST PALM BEACH HOTEL, (B) DISPOSITION, DONATION, OR ABANDONMENT OF THE PROPERTY AT THE WEST PALM BEACH HOTEL, AND (C) MODIFIED NOTICE PROCEDURES RELATING TO THE ABANDONMENT1
1

The list of Debtors in these Chapter 11 Cases along with the last four digits of each Debtors federal tax identification number can be found by visiting the Debtors restructuring website at www.omnimgt.com/innkeepers or by contacting Omni Management Group, LLC at Innkeepers USA Trust c/o Omni Management Group, LLC, 16161 Ventura Boulevard, Suite C, PMB 606, Encino, California 91436. The location of the Debtors corporate headquarters and the service address for their affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, Florida 33480.

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Innkeepers USA Trust and certain of its affiliates, as debtors and debtors in possession (collectively, the Debtors), file this motion (this Motion) for the entry of an order, substantially in the form attached hereto as Exhibit A, approving the (a) rejection of the following executory contracts and unexpired leases: That certain ground lease between Rinker Materials Corp. and Gulfstream Capital Group, Inc., dated as of February 16, 1985, as amended by that certain First Amendment to the Ground Lease by and among Benenson Capital Company (Benenson), ROFAR Realty Company, Inc. (ROFAR and, together with Benenson, the Ground Lessors), and Palm Beach Hotel Associates, Ltd., dated as of October 31, 1989, as assigned by that certain Assignment of Lease between Palm Beach Hotel Associates, Ltd. and Innkeepers USA Limited Partnership, as further assigned by that certain Assignment of Lease between Innkeepers USA Limited Partnership and Innkeepers Financing Partnership, L.P., and assigned again by that Certain Assignment and Assumption of Ground Lease, dated as of June 29, 2007 between Innkeepers Financing Partnership, L.P. and Grand Prix West Palm Beach LLC (collectively, the WPB Ground Lease); that certain Membership Application and Agreement, dated as of June 29, 2007, between Best Western International, Inc. (Best Western) and Grand Prix Floating Lessee, LLC (the Membership Agreement); that certain sublease agreement between Innkeepers Financing Partnership, L.P.,2 as sublessor, Anand Enterprise, Inc., as sublessee, and Anand Patel, as guarantor, dated as of January 1, 2000 (the Restaurant Sublease); and that certain interdebtor sublease agreement between Debtor Grand Prix West Palm Beach LLC as lessor and Grand Prix Floating Lessee LLC as lessee (the WPB Interdebtor Sublease and, together with the WPB Ground Lease, the Membership Agreement, and the Restaurant Sublease, the WPB Agreements);

(b) disposal, donation, or abandonment of the property at the West Palm Beach hotel that the Debtors are entitled to retain; and (c) modification to the notice requirements of Bankruptcy Rule

Debtor Grand Prix West Palm Beach LLC is the successor in interest to Innkeepers Financing Partnership, L.P., a non-Debtor.

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6007, specifically waiving the requirement that the Debtors serve notice of the abandonment of the property at the West Palm Beach hotel premises on all creditors. In support of this Motion, the Debtors respectfully state as follows: Preliminary Statement By this Motion, the Debtors seek to reject the WPB Agreements and dispose, donate, or abandon property remaining on the West Palm Beach hotel premises that the Debtors are entitled to retain. The West Palm Beach hotelwhich serves as collateral under the Debtors prepetition floating rate mortgage loan agreement as well as the debtor-in-possession financing agreement with an affiliate of Lehman ALI Inc. (Lehman)is an unprofitable property for the Debtors, with consistently declining revenue and negative EBITDA.3 Without the WPB Ground Lease, the Debtors would have no use for the Membership Agreement, which governs the applicable relationship between Best Western and the Debtors, and thus seek to reject it as well. Similarly, the Debtors are seeking to reject the other executory contracts and unexpired leases related to the West Palm Beach hotel and dispose, donate, or abandon property. In sum, the Debtors have identified the continued operation of the West Palm Beach hotel as a losing proposition and have therefore determined, in their sound business judgment, to exercise their ability under section 365(a) of the Bankruptcy Code to reject the burdensome executory contracts and unexpired

Under the current terms of the Debtors cash collateral and debtor-in-possession financing orders and agreements, the ability to use the prepetition lenders cash collateral and to maintain their two debtor-inpossession financing facilities is predicated on the Debtors maintaining the Membership Agreement. Lehman and the Lehman-affiliate that acts as a debtor in possession financing lender in these Chapter 11 Cases have agreed to the necessary consents and waivers so that the relief requested herein does not jeopardize the Debtors authority to use cash collateral and borrow under the debtor-in-possession financing facilities. The Debtors are currently negotiating the terms of the consents and waivers.

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leases related thereto and under sections 363 and 554(a) of the Bankruptcy Code to dispose, donate, or abandon property at the premises. Jurisdiction 1. The United States Bankruptcy Court for the Southern District of New York

(the Court) has jurisdiction over this matter pursuant to 28 U.S.C. 157, 363, and 1334. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 2. 3. Venue is proper pursuant to 28 U.S.C. 1408 and 1409. The statutory bases for the relief requested herein are sections 365(a) and 554(a)

of title 11 of the United States Code (the Bankruptcy Code), Rules 6006, 6007, and 9014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), and Rule 6007-1 of the Local Bankruptcy Rules for the Southern District of New York (the Local Bankruptcy Rules). Relief Requested 4. By this motion, the Debtors seek entry of an order: (a) authorizing the Debtors to

reject the WPB Agreements; (b) authorizing the Debtors to dispose, donate, or abandon property at the West Palm Beach hotel; (c) approving the notice of abandonment of the West Palm Beach hotel premises, specifically waiving the requirement in Bankruptcy Rule 6007 that the Debtors serve notice of the abandonment on all creditors and deeming service of this Motion on the Notice Parties (as defined herein) as sufficient notice; and (d) granting such other relief as is just and proper. Background 5. On July 19, 2010 (the Petition Date), each of the Debtors filed a petition with

the Court under chapter 11 of the Bankruptcy Code (collectively, the Chapter 11 Cases). The Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly 4
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administered pursuant to Bankruptcy Rule 1015(b). The Debtors are operating their business and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request for the appointment of a trustee has been made in the Chapter 11 Cases. On July 28, 2010, the United States Trustee for the Southern District of New York (the U.S. Trustee) appointed an official committee of unsecured creditors (the Creditors Committee). 6. Additional information regarding the Debtors business, capital structure, and the

circumstances leading to the Chapter 11 Cases is contained in the Amended Declaration of Dennis Craven, Chief Financial Officer of Innkeepers USA Trust, in Support of First-Day Pleadings [Docket No. 33, as supplemented by Docket No. 516]. The WPB Ground Lease 7. The Debtors seek to reject the WPB Ground Lease, pursuant to which Debtor

Grand Prix West Palm Beach LLC is the lessee (the Debtor Lessee), of the Best Western West Palm Beach Airport Inn in West Palm Beach, Florida. Over the past two years, the West Palm Beach hotel has experienced a significant decline in both revenue and value. For example, the hotels actual revenue was approximately $1.6 million in 2009 (with similar revenue figures for 2010), as compared to approximately $2.33 million in 2008 and $2.49 million in 2007 (a decline of approximately 31% over two years from 2008 to 2010). In addition, the hotels adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) has experienced a significant decline since 2007 when EBITDA was approximately $452,000 to 2008 when EBITDA was approximately $413,000 to 2009 when the hotel produced negative EBITDA of approximately $543,000. Further, while the WPB Best Westerns 2010 revenue and EBITDA figures have not been finalized to-date, the Debtors expect the West Palm Beach hotel to produce another year of significantly negative EBITDA in 2010 and revenue approximately on par with 5
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2009. In contrast, the payments due under the WPB Ground Lease, consisting primarily of rent and real estate taxes (as well as other miscellaneous charges), continue to escalate. Membership Agreement 8. In 2007, Debtor Lessee and Best Western entered into the Membership

Agreement, pursuant to which Best Western became the franchisor and operator of the West Palm Beach hotel. The Membership Agreement governs, among other things, the use of Best Westerns name, trademarks, service marks, and identification symbols in connection with the West Palm Beach hotel. In return for this use, the Debtors pay an annual fee of approximately $5,000 and agree to abide by certain terms and conditions set forth in the Membership Agreement. On November 4, 2010, Best Western filed a motion seeking to lift the automatic stay to permit Best Western to terminate the Membership Agreement (the Best Western Lift Stay Motion).4 On December 10, 2010, the Debtors objected to the Best Western Lift Stay Motion and, on December 14, 2010, the Court denied the Best Western Lift Stay Motion. 9. Since the Debtors objected to the Best Western Lift Stay Motion, the Debtors

have determined that the continued operation of the West Palm Beach hotel is a burden to the Debtors estates and they no longer wish to incur the significant losses arising from operation of the hotel. In the event that the Court authorizes the rejection of the WPB Ground Lease as requested and the Debtors cease conducting business operations at the hotel, the Debtors will have no use for the benefits provided by the Membership Agreement. Accordingly, rejection of

See Motion of Best Western International, Inc., for Order Terminating the Automatic Stay [Docket No. 655]; see also Debtors Objection to Motion of Best Western International, Inc., for Order Terminating the Automatic Stay [Docket No. 753].

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the Membership Agreement avoids the burdens associated with the Membership Agreement and, therefore, is in the best interests of the Debtors estates. The Other WPB Contracts and Leases 10. Pursuant to the WPB Interdebtor Sublease, the Debtor Lessee sub-leases its

Ground Lease to Debtor Grand Prix Floating Lessee LLC. 11. Pursuant to the Restaurant Sublease, Innkeepers Financing Corporation L.P. (and,

as successor in interest, the Debtor Lessee) subleased the International House of Pancakes restaurant space in the West Palm Beach hotel to Anand Enterprise, Inc.5 Property to Be Disposed, Donated, or Abandoned 12. As discussed herein, the West Palm Beach hotel is an unprofitable property of the

Debtors. In addition to rejecting the WPB Agreements, the Debtors seek authority to dispose, donate, or abandon property remaining at the West Palm Beach hotel premises. The property will be burdensome and is of inconsequential value and benefit to the Debtors estates. The Debtors will determine the means of disposition in consultation with Lehman, the lender with a security interest in the property. Basis for Relief I. Rejecting the WBP Agreements Is a Reasonable Use of the Debtors Business Judgment. 13. Section 365(a) of the Bankruptcy Code provides that a debtor may, subject to

court approval, reject any executory contract or unexpired lease of the debtor. 11 U.S.C.

The Restaurant Sublease expired on January 1, 2010. Because the Restaurant Lease expired by its terms, the Debtors believe there is no pending sublease to reject. Out of an abundance of caution, however, to the extent Anand Enterprise Inc. (or another party-in-interest) argues that the Restaurant Sublease or an amendment thereto is currently operative, the Debtors seek to reject the Restaurant Sublease and any amendments thereto as well.

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365(a).

This provision allows a [debtor] to relieve the bankruptcy estate of burdensome

agreements which have not been completely performed. See Stewart Title Guar. Co. v. Old Republic Natl Title Ins. Co., 83 F.3d 735, 741 (5th Cir. 1996) (citing In re Murexco Petroleum, Inc., 15 F.3d 60, 62 (5th Cir. 1994)). 14. The Debtors contemplated rejection of unexpired leases of non-residential real

property and an executory contract is governed by the business judgment standard. See In re Enron Corp., No. 01-16034, 2006 WL 898033, at *4 (Bankr. S.D.N.Y. Mar. 24, 2006) (In determining whether to approve a [debtors] decision to reject such lease or contract, a court applies the business judgment test which is met if the rejection is beneficial to the estate.); In re Ames Dept Stores, Inc., 306 B.R. 43, 51 (Bankr. S.D.N.Y. 2004); see also In re Orion Pictures Corp., 4 F.3d 1095, 109899 (2d Cir. 1993). Rejection should be approved under section 365(a) where a debtor has determined in its business judgment that rejection is in the best interest of its creditors and parties in interest. See In re Bradlees Stores, Inc., 194 B.R. 555, 558 n.1 (Bankr. S.D.N.Y. 1996), appeal dismissed, 210 B.R. 506 (S.D.N.Y. 1997); In re Summit Land Co., 13 B.R. 310, 315 (Bankr. D. Utah 1981) ([C]ourt approval [of rejection] under Section 365(a), if required, except in extraordinary situations, should be granted as a matter of course.). Thus, rejection of the WPB Agreements is appropriate if, in the Debtors business judgment, rejection would benefit their estates. See Orion Pictures, 4 F.3d at 1099; In re Stable Mews Assocs., Inc., 41 B.R. 594, 596 (Bankr. S.D.N.Y. 1984) (The business judgment test provides considerably more flexibility to a [debtor]. It requires only that the trustee demonstrate that rejection of the contract will benefit the estate.). 15. In their sound business judgment, the Debtors have determined that the WPB

Agreements are no longer sources of potential value for the Debtors future operations, creditors,

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or other parties in interest. Given the revenue and profitability trends of the West Palm Beach hotel, the Debtors have determined that their continued operation of the West Palm Beach hotel and continued performance under the WPB Agreements carries ongoing obligations of the Debtors that exceed the benefits associated with their continued operation of the WPB Best Western. The Debtors have analyzed the WPB Ground Lease and viable alternatives and have concluded that they can obtain substantial cost savings and operational efficiencies by rejecting the WPB Ground Lease. The Debtors have also determined that marketing costs and the

obligations to pay, for example, postpetition rent, real estate taxes, utilities, insurance, and other related charges diminishes any potential value derived from an assignment or sublease of the WPB Ground Lease. 16. Accordingly, for the reasons set forth above, the Debtors submit that seeking the

relief requested herein is a sound exercise of their business judgment as it will avoid the incurrence of unnecessary administrative expense claims during these Chapter 11 Cases and prevent the Debtors from losing additional money going forward as a result of the continued operation of the West Palm Beach hotel. As such, the Debtors respectfully assert rejection is amply justified in these circumstances. II. Disposal, Donation, or Abandonment Is in the Best Interests of the Debtors and their Estates. 17. A debtor may use or sell (including by disposal or donation) property of the estate

after notice and a hearing . . . other than in the ordinary course of business . . . . See 11 U.S.C. 363(b)(1). See MacArthur Co. v. Johns-Manville Corp. (In re Johns-Manville Corp.), 837 F.2d 89, 92 (2d Cir. 1988). The sale of property of the estate, other than in the ordinary course of business, is authorized when there is a sound business reason that justifies such action. See Comm. of Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 9
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1063, 1071 (2d Cir. 1983). When a valid business justification is articulated, the law vests the debtors decision to use, sell, or lease property out of the ordinary course of business with a strong presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company. See Official Comm. of Subordinated Bondholders v. Integrated Res., Inc. (In re Integrated Res., Inc.), 147 BR. 650, 656 (S.D.N.Y. 1992). 18. Once a debtor articulates a valid business justification for its actions pursuant to

section 363 of the Bankruptcy Code, courts in the Second Circuit give great deference to the substance of the directors decision and will not invalidate the decision, will not examine its reasonableness, and will not substitute its views for those of the board if the latters decision can be attributed to any rational business purpose. In re Global Crossing Ltd., 295 B.R. 726, 744 (Bankr. S.D.N.Y. 2003) (citing Paramount Commcns Inc. v. QVC Network Inc., 637 A.2d 34, 45 n.17 (Del. 1994)). Thus, if a debtors actions satisfy the business judgment rule, then the transaction in question should be approved and authorized under section 363(b)(1). 19. Section 554(a) of the Bankruptcy Code states, in relevant part: After notice and a hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate. 11 U.S.C. 554(a). 20. Section 554(a) requires two showings to permit a debtor to abandon property.

First, the property to be abandoned must be property of the estate. 11 U.S.C. 541 and 554. Second, the property to be abandoned must be burdensome or of inconsequential value or benefit to the debtors estate. In re Grossingers Assocs., 184 B.R. 429, 432 (Bankr.S.D.N.Y. 1995). Moreover, a debtor is afforded significant discretion in determining the value and benefits of

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particular property for the purposes of the decision to abandon it. In re Interpictures Inc., 168 B.R. 526, 535 (Bankr. E.D.N.Y. 1994) (abandonment is in the discretion of the trustee, bounded only by that of the court). In evaluating a debtors abandonment decisions, [c]ourts defer to the [debtors] judgment and place the burden on the party opposing the abandonment to prove a benefit to the estate and an abuse of the [debtors] discretion. In re Slack, 290 B.R. 282, 284 (Bankr. N.J. 2003). This right to abandon exists so that burdensome property can be removed and the best interests of the estate will be furthered. South Chicago Disposal, Inc. v. LTV Steel Co., Inc. (In re Chateaugay Corp.), 130 B.R. 162, 166 (S.D.N.Y. 1991) (quoting In re New York Investors Mutual Group, Inc., 143 F. Supp. 51, 54 (S.D.N.Y. 1956)). 21. As an initial matter, the property at the West Palm Beach hotel is property of the

estate. It serves as collateral for the Debtors prepetition floating rate mortgage loan as well as the Debtors debtor-in-possession financing facility with a Lehman affiliate. Further, the

Debtors decision to dispose, donate, or abandon property at the West Palm Beach hotel constitutes a sound exercise of the Debtors business judgment, is made in good faith upon a reasonable basis, and is within the Debtors scope of authority. As discussed above, the Debtors believe that disposing, donating, or abandoning property at the West Palm Beach hotel actually results in a net benefit to the Debtors estate. Accordingly, the Debtors respectfully submit that disposing or donating the property is appropriate under section 363 of the Bankruptcy Code and abandoning the property is appropriate under section 554 of the Bankruptcy Code. III. Modification of the Notice Requirements Is Appropriate. 22. Bankruptcy Rule 6007(a) states, in pertinent part: Unless otherwise directed by the court, the trustee or debtor in possession shall give notice of a proposed abandonment or disposition of property to the United States trustee, all creditors, indenture trustees, and committees elected pursuant to 705 or appointed pursuant to 1102 of the [Bankruptcy] Code. 11
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23.

The Debtors request that service of the Motion on the parties on the service list

should be deemed adequate and sufficient notice, and that the Court waive the requirement that the Debtors serve notice on all creditors. The Debtors have served this Motion upon: (a) the entities on the Master Service List (as such term is defined in the Notice, Case Management, and Administrative Procedures [Docket No. 68]), which is available at

www.omnimgt.com/innkeepers, the website maintained by Omni Management Group, LLC, the Debtors notice and claims agent; (b) Benenson; (c) ROFAR; (d) Anand Enterprise, Inc.; (e) Anand Patel; and (f) counsel for Best Western (collectively, the Notice Parties). The Debtors believe that service on the entire creditor matrix is unnecessary in this situation. Service on the Notice Parties is reasonably calculated to provide timely and adequate notice of the abandonment of the West Palm Beach property to all parties with a potential interest in this Motion. Based upon the foregoing, the Debtors respectfully request that the Court determine that notice of the Motion on the Notice Parties satisfied Bankruptcy Rule 6007 and that no further notice is required. Motion Practice 24. This Motion includes citations to the applicable rules and statutory authorities

upon which the relief requested herein is predicated, and a discussion of their application to this Motion. Accordingly, the Debtors submit that this Motion satisfies Bankruptcy Rule 9013-1(a) of the Local Rules for the United States Bankruptcy Court for the Southern District of New York. Debtors Reservation of Rights 25. Nothing in the Motion or this Order, nor as a result of the Debtors payment of

claims pursuant to this order, shall be deemed or construed as: (a) an admission as to the validity 12
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or priority of any claim against the Debtors; (b) a waiver of the Debtors rights to dispute any claim; or (c) an approval or assumption of any agreement, contract, or lease pursuant to section 365 of the Bankruptcy Code. Notice 26. The Debtors have provided notice of this Motion to the Notice Parties. In light of

the nature of the relief requested, the Debtors respectfully submit that no further notice is necessary. No Prior Request 27. court. No prior motion for the relief requested herein has been made to this or any other

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WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form attached hereto as Exhibit A, granting the relief requested herein and granting such other relief as is just and proper. New York, New York Dated: January 12, 2011 /s/ Paul M. Basta James H.M. Sprayregen, P.C. Paul M. Basta KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 and Anup Sathy, P.C. Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession

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EXHIBIT A Proposed Order

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al.,1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

ORDER AUTHORIZING THE (A) REJECTION OF (I) THE WEST PALM BEACH GROUND LEASE, (II) THE MEMBERSHIP AGREEMENT WITH BEST WESTERN INTERNATIONAL, INC., AND (III) OTHER EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED TO THE WEST PALM BEACH HOTEL, (B) DISPOSITION, DONATION, OR ABANDONMENT OF THE PROPERTY AT THE WEST PALM BEACH HOTEL, AND (C) MODIFIED NOTICE PROCEDURES RELATING TO THE ABANDONMENT1 Upon the motion (the Motion)2 of the Debtors, as debtors and debtors in possession, for the entry of an order (this Order) (a) authorizing the Debtors to reject the WPB Agreements; (b) authorizing the Debtors to dispose, donate, or abandon property at the West Palm Beach hotel; (c) approving the notice of abandonment of the West Palm Beach hotel premises, specifically waiving the requirement in Bankruptcy Rule 6007 that the Debtors serve notice of the abandonment on all creditors and deeming service of this Motion on the Notice Parties as sufficient notice; and (d) granting such other relief as is just and proper; it appearing that the relief requested is in the best interests of the Debtors estates, their creditors, and other

The list of Debtors in these Chapter 11 Cases along with the last four digits of each Debtors federal tax identification number can be found by visiting the Debtors restructuring website at www.omnimgt.com/innkeepers or by contacting Omni Management Group, LLC at Innkeepers USA Trust c/o Omni Management Group, LLC, 16161 Ventura Boulevard, Suite C, PMB 606, Encino, California 91436. The location of the Debtors corporate headquarters and the service address for their affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, Florida 33480. All capitalized terms used by otherwise not defined herein shall have the meanings set forth in the Motion.

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parties in interest; the Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. 157 and 1334; consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. 157(b); venue being proper before this court pursuant to 28 U.S.C. 1408 and 1409; notice of the Motion having been adequate and appropriate under the circumstances; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. 2. 3. 4. 5. 6. The Motion is granted to the extent provided herein. The WPB Ground Lease is hereby rejected as of February 13, 2011. The Membership Agreement is hereby rejected as of as of February 13, 2011. The WPB Interdebtor Sublease is hereby rejected as of as of February 13, 2011. The Restaurant Sublease is hereby rejected as of as of February 13, 2011. The Debtors are authorized to dispose or donate all property at the Debtors West

Palm Beach hotel in their sole discretion and in consultation with Lehman. 7. All of the Debtors property remaining at the Debtors West Palm Beach hotel is

hereby abandoned as of February 13, 2011. 8. Notice Parties. 9. The terms and conditions of this Order shall be immediately effective and Bankruptcy Rule 6007 is deemed satisfied by the service of the Motion on the

enforceable upon its entry. 10. All time periods set forth in this Order shall be calculated in accordance with

Bankruptcy Rule 9006(a). 11. The Debtors are authorized to take all actions necessary to effectuate the relief

granted pursuant to this Order in accordance with the Motion.

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12.

This Court retains jurisdiction with respect to all matters arising from or related to

the implementation of this Order. New York, New York Dated: ___________, 2011 United States Bankruptcy Judge

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