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Hearing Date: December 13, 2011 at 2:00pm (EST) Objection Deadline: December 6, 2011 at 4:00 p.m. (EST)

Lenard M. Parkins (NY Bar No. 4579124) John D. Penn (NY Bar No. 4847208) Mark Elmore (admitted pro hac vice) HAYNES AND BOONE, LLP 30 Rockefeller Plaza, 26th Floor New York, New York 10112 Telephone: (212) 659-7300 Facsimile: (212) 918-8989 Attorneys for Five Mile Capital Real Estate Advisors LLC 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

LIMITED OBJECTION OF FIVE MILE CAPITAL REAL ESTATE ADVISORS LLC TO THE FINAL APPLICATION OF MOELIS & COMPANY LLC FOR COMPENSATION FOR PROFESSIONAL SERVICES RENDERED AND REIMBURSEMENT OF ACTUAL AND NECESSARY EXPENSES INCURRED AS FINANCIAL ADVISOR AND INVESTMENT BANKER TO THE DEBTORS AND THE DEBTORS-IN-POSSESSION FOR THE PERIOD FROM JULY 19, 2010 THROUGH OCTOBER 27, 2011 Five Mile Capital Real Estate Advisors LLC (Five Mile),1 in its capacity as the special servicer of the New Fixed Rate Mortgage Loan, hereby files this Limited Objection of Five Mile Capital Real Estate Advisors LLC (the Objection) to the Final Application of Moelis & Company LLC (Moelis) for Compensation for Professional Services Rendered and Reimbursement of Actual and Necessary Expenses Incurred as Financial Advisor and Investment
Effective as of October 28, 2011, the special servicing of that certain secured loan described below has been transferred from Midland Loan Services (a division of PNC Bank, NA) to Five Mile. The secured loan, in the amount of not less than $675,000,000 (the New Fixed Rate Mortgage Loan) is owed by certain of the above-captioned Debtors as provided for under the Debtors Plans of Reorganization to Chapter 11 of the Bankruptcy Code (with Modifications to the Fixed/Floating Plan) dated October 19, 2011 (the Plan).
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Banker to the Debtors and the Debtors-in-Possession for the Period From July 19, 2010 through October 27, 2011 (the Moelis Fee Application),2 and in support hereof, respectfully states as follows: Preliminary Statement 1. Five Mile objects to the Moelis Fee Application to the extent that Moelis requests

payment of fees for services that were performed after the engagement letter governing Moeliss retention in the above-captioned cases (the Cases) terminated by its own terms. The

compensation is limited by the terms of the engagement letter. Amounts that were improperly paid from the Fixed Rate Cash Collateral must be paid to Five Mile. Background 2. On July 19, 2010, the Debtors filed the Debtors Application for the Entry of an

Order Authorizing the Retention and Employment of Moelis & Company LLC as Financial Advisor and Investment Banker to the Debtors Nunc Pro Tunc to the Petition Date (the Retention Application).3 On August 12, 2010, the Court entered an order approving the Retention Application (the Retention Order) pursuant to 11 U.S.C. 328.4 3. As acknowledged in the Moelis Fee Application, the Court approved Moeliss

retention as financial advisor and investment banker to the Debtors in the Retention Order pursuant to the terms of the engagement letter dated as of March 24, 2010 (the Engagement Letter), which was filed with the Retention Application. The Engagement Letter provides that the engagement would terminate under certain specific conditions:

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Docket No. 2225. Docket No. 21. Docket No. 193.

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Our engagement hereunder shall extend until the earliest of (i) the effective date of a chapter 11 plan of reorganization or liquidation confirmed in the Bankruptcy Cases, (ii) the conversion of the Bankruptcy Cases to chapter 7 of the Bankruptcy Code, (iii) appointment of a chapter 11 trustee or an examiner with expanded powers in the Bankruptcy Cases, (iv) dismissal of the Bankruptcy Cases, and (v) the consummation of the last Restructuring Transaction, as agreed upon by Moelis and the Company; provided, however, that our engagement may be (x) terminated earlier, with or without cause, either by us or by you upon 15 days prior written notice thereof to the other party, (y) terminated earlier as provided elsewhere herein or (2) extended, in writing, by the Company and us. Engagement Letter at p. 6 (emphasis added). 4. On June 29, 2011, the Court entered an order confirming the Debtors Plans of

Reorganization Pursuant to Chapter 11 of the Bankruptcy Code,5 and on July 7, 2011, the Ontario Plan became effective.6 Under the plain language of the Engagement Letter, Moeliss engagement concluded on July 7, 2011the earliest event of those listed above. 5. On November 21, 2011, Moelis filed the Moelis Fee Application seeking fees of

$6,760,067.50 and expenses of $114,196.68 for services performed through October 27, 2011. Through the Moelis Fee Application, Moelis requests approval and payment of monthly fees after the date that Moeliss engagement concluded on July 7, 2011 (the Disputed Monthly Fees) in the following amounts: July 8-31 August September Oct. 1-27 Total 6. $116,129 $150,000 $150,000 $130,645 $546,774

The Debtors have not paid Moelis the August through October portion of the

Disputed Monthly Fees in the amount of $430,645 in disputed fees, but rather such portion of the

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Docket No. 1804.

See Notice of Entry of Confirmation Order and Occurrence of Effective Date of the Ontario Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code [Docket No. 1859].
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Disputed Monthly Fees were to be paid through the final distribution from the Professional Fee Escrow Account. With respect to July 8-31 portion of the Disputed Monthly Fees, Moelis has already received payment of 90% of such Disputed Monthly Fee in the amount of $104,516.7 Through the Moelis Fee Application, Moelis requests payment of the remaining ten (10%) of the amount due for the July potion of the Disputed Monthly Fees equal to $11,613 from the Professional Fee Escrow Account. Limited Objection 7. Five Mile objects to the Moelis Fee Application to the extent that it seeks

payment of the Disputed Monthly Fees in contravention of Section 328 of the Bankruptcy Code for services and reimbursement for expenses incurred after July 7, 2011, the date on which the Engagement Letter terminated according to its terms. Moeliss right to charge its monthly amount in these Cases pursuant to its retention under Section 328 of the Bankruptcy Code terminated on July 7, 2011the first effective date of a plan of reorganization. See In re Borders Group, Inc., Case No. 11-10614, Docket No. 2261 (Bankr. S.D.N.Y. Dec. 5, 2011) (refusing to consider parole evidence in the context of a fee application where the retention order and engagement letter were clear and unambiguous). Accordingly, the request for $546,774 in Disputed Monthly Fees after the engagement terminated is improper. The Disputed Monthly Fees previously paid to Moelis from the Fixed Rate Cash Collateral (as defined in the Final Cash Collateral Order, as amended), must be paid to Five Mile, as the special servicer upon the New Fixed Rate Mortgage Loan (as defined in the Fixed/Floating Plan confirmed in these Cases). 8. Because the Engagement Letter provides that Moelis would have applied a 50%

credit against the Restructuring Fee (as defined in the Engagement Letter) for the receipt of any

The source of payment for the $104,516 was the lenders cash collateral in these Cases, including the Fixed Rate Cash Collateral.
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of the Disputed Monthly Fees, the total amount paid to Moelis under the Moelis Fee Application must be adjusted accordingly. Local Rule 9013-1(a) 9. This pleading includes citations to the applicable rules and statutory authorities

upon which relief requested herein is predicated and a discussion of their application to this pleading. Accordingly, Five Mile submits that this pleading satisfies Local Bankruptcy Rule 9013-1(a). WHEREFORE, Five Mile respectfully requests that the Court enter an order (i) sustaining this Objection and denying the request to pay the Disputed Monthly Fees; (ii) reducing the compensation payable under the Moelis Fee Application accordingly; (iii) requiring the payment to Five Mile of the amount of Disputed Monthly Fees previously paid to Moelis from the Fixed Rate Cash Collateral; and (iv) granting Five Mile such other and further relief as is equitable and just. Dated: December 6, 2011 New York, New York

HAYNES AND BOONE, LLP

/s/ John D. Penn Lenard M. Parkins (NY Bar #4579124) Mark Elmore (admitted pro hac vice) 30 Rockefeller Plaza, 26th Floor New York, New York 10112 Telephone No.: (212) 659-7300 Facsimile No.: (212) 884-8211

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John D. Penn (NY Bar # 4847208) Haynes and Boone, LLP 201 Main Street, Suite 2200 Fort Worth, Texas 76102 Telephone No.: (817) 347-6610 Facsimile No.: (817) 348-2300 Attorneys for Five Mile Capital Real Estate Advisors LLC

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