Michelle McMahon

Partner
Direct: 212 541-3039
michelle.mcmahon@bryancave.com
March 9, 2011
VIA EMAIL
Honorable Shelley C. Chapman
United States Bankruptcy Judge
U.S. Bankruptcy Court, SDNY
One Bowling Green, Room 610
New York, New York 10004
Re: Innkeepers USA Trust, et. al., Case No. 10-13800 (SCC)
Dear Judge Chapman:
As directed by the Court during the conference call held on March 7, 2011, Wells
Fargo Bank, N.A., as trustee for the registered holders of Credit Suisse First
Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through
Certificates, Series 2007-C1 and U.S. Bank National Association, as successor to
LaSalle Bank N.A., formerly known as LaSalle National Bank, as Trustee for the
registered holders of ML-CFC Commercial Mortgage Trust 2006-4, Commercial
Mortgage Pass-Through Certificates, Series 2006-4 Gointly, the "Trusts") submits
the following list of remaining objections to the relief requested in the Motion for
Entry of an Order (I) Authorizing the Debtors to Enter into the Commitment Letter
with Five Mile Capital II Pooling REIT LLC, Lehman ALI, Inc., and Midland
Loan Services, (II) Approving the New Party/Midland Commitment Between the
Debtors and Midland Loan Services, (III) Approving Bidding Procedures, (IV)
Approving Bid Protections, (V) Authorizing an Expense Reimbursement to
"Bidder D", and (VI) Modifying Cash Collateral Order to Increase Expense
Reserve [Docket No. 820], as modified by the revised documents filed by the
Debtors over the last four days (collectively, "Bid Procedures Motion"). Based
on the changes to the relief sought in the Bid Procedures Motion as of the date of
this letter, LNR Securities Holdings, LLC has determined not to proceed with its
objections to the Bid Procedures Motion and hereby withdraws such objections.
1
The Trusts reserve their rights to amend and supplement these objections.
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1
To the extent that the relief sought in the Bid Procedures Motion materially changes, LNR Securities H o l ~ U C
reserves its right to reassert its objection and/ or any new objections based on the further modified relief sought.
C053239 /0312771/1617473.1
Honorable Shelley C. Chapman
March 9, 2011
Page2
Remaining Objections
1. The Revised Five Mile/ Lehman Commitment Letter
2
a. The Trusts have not been provided copies of the amended Lehman/ Five
Mile Commitment or the Five Mile/ Midland Commitment. The Debtors have committed
to promptly provide copies of these documents to the Trusts. The Trusts should be
provided sufficient time in advance of the hearing to review these documents and their
impact, if any, on the relief requested in the Bid Procedures Motion as it relates to the
collateral securing the Trust Secured Loans. Revised Five Mile/ Lehman Commitment
Letter ,-r 13.
b. The Revised Five Mile/ Lehman Commitment Letter must make clear that
no assets of the Excluded Debtors (as defined in the Revised Five Mile/ Lehman
Commitment Letter) will be transferred as part of the transaction contemplated thereby.
The Term Sheet attached as Exhibit B to the Revised Five Mile/ Lehman Commitment
Letter states that Five Mile/ Lehman will acquire, among other things, "such other assets
as may be subsequently identified as necessary to the operation of the Fixed! Floating Rate
Debtors." Revised Five Mile/ Lehman Commitment Letter, Ex. B (Term Sheet), p. 2.
Language should be added to this section to make clear that "such other assets" will not
include any assets, including cash or cash equivalents, of the Excluded Debtors. In
addition, the section of the Term Sheet addressing the Excluded Debtors should
specifically state that no assets of the Excluded Debtors are included in the transaction.
Revised Five Mile/ Lehman Commitment Letter, p. 10. The Trusts have provided
suggested language to the Debtors and are waiting on confirmation that such language is
acceptable to the parties.
c. The Debtors will have to address as part of the Debtors' plan for separating
the Excluded Debtors and the Fixed! Floating Rate Debtors (as defined in the Revised Five
Mile/ Lehman Commitment Letter) cash management, cash collateral and similar issues.
Revised Five Mile/ Lehman Commitment Letter, Ex. B (Term Sheet), p. 5. The Trusts
have provided appropriate language to the Debtors for inclusion in the section of the Term
Sheet addressing the Transition Services Agreement and are waiting on confirmation that
such language is acceptable to the parties.
d. The Debtors need to obtain from Five Mile waivers and/or consent to
amendment to the DIP Order to the extent necessary to ensure that the filing of the Plan
2
Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Objection of the Trusts
and LNR Securities Holdings, LLC to Motion for Entry of an Order (I) Authorizing the Debtors to Enter into the
Commitment Letter with Five :tYfile Capital II Pooling REIT LLC, Lehman ALI, Inc., and Midland Loan Services, (II)
Approving the New Party/Midland Commitment Between the Debtors and Midland Loan Services, (III) Approving
Bidding Procedures, (IV) Approving Bid Protections, (V) Authorizing an Expense Reimbursement to "Bidder D", and
(VI) Modifying Cash Collateral Order to Increase Expense Reserve [Docket No. 820].
C0532390312771/1617473.1
Honorable Shelley C. Chapman
March 9, 2011
Page 3
contemplated by the Revised Five Mile/ Lehman Commitment Letter and/or repayment of
Tranche A of the Five Mile DIP will not cause a default, acceleration or termination of
Tranches Band C of the Five Mile DIP. Revised Five Mile/ Lehman Commitment Letter,
Ex. B (Term Sheet), p. 5.
e. With respect to the proposed expense reimbursement for Bidder D, it is
premature at this stage to determine whether any portion of the proposed expense
reimbursement, if payable, should be allocated to the Excluded Debtors. Any
determination of the allocation of this expense reimbursement among the Debtors' estates
should be deferred to a point in time when the value provided to each of the Debtors, if
any, can be determined. The Trusts fully reserve all of their rights to contest any
allocation of this expense reimbursement, if paid, to their estates if appropriate. Revised
Five Mile/ Lehman Commitment Letter, Ex. B (Term Sheet), p. 16.
f. The Revised Five Mile/ Lehman Commitment Letter provides that the
"Releasing Parties reserve all of their rights with respect to the Excluded Debtors and any
assets of the Excluded Debtors." Revised Five Mile/ Lehman Commitment Letter, Ex. B
(Term Sheet), p. 19. This reservation of rights provision should make clear that nothing in
the Revised Five Mile/ Lehman Commitment Letter shall affect the rights of the Excluded
Debtors and their creditors, which are fully reserved. The Trusts propose adding the
following language to the Releases section of the Term Sheet address the issue: "Nothing
herein shall affect the rights of the Excluded Debtors and their respective creditors, which
rights are fully reserved."
2. Bid Procedures for the Fixed/ Floating Debtors
a. Despite the moniker of the document, the Debtors have included a section
with regard to the process for the Excluded Debtors. Bid Procedures for the Fixed/
Floating 5. The Trusts have spoken with the Debtors regarding their intent to be
involved earlier and more substantively in the process for the Debtors obligated on the
Trust Secured Loans. Consistent with this intent, the Trusts have proposed language to the
Debtors for inclusion in this section regarding the sharing of information and grant of
consultation rights with respect to any sales, marketing and/or auction process with respect
to such Debtors and are waiting on confirmation that such language is acceptable to the
parties.
Thank you in advance for
cc: Lawrence P. Gottesman
C0532390312771/1617473.1
Honorable Shelley C. Chapman
March 9, 2011
Page4
SERVICE LIST
Official Committee of Unsecured Creditors
Lorenzo Marinuzzi
lmarinuzzi@mofo.com
(212) 468-8045
Midland Loan Services, Inc.
John Penn
john.penn@haynesboone.com
(817) 347-6610
Lenard Parkins
lenard.parkins@haynesboone.com
(212) 659-4966
Innkeepers USA Trust
Anup Sathy
anup.sathy@kirkland.com
(212) 446-4908
Paul Basta
paul. basta@kirkland.com
(212) 446-4 7 50
Daniel Donovan
daniel.donovan@kirkland.com
(202) 879-5174
Ad Hoc Committee of Preferred
Shareholders
Martin Bienenstock
mbienenstock@dl.com
(212) 259-8530
Irena Goldstein
igoldstein@dl.com
(212) 259-7035
Timothy Karcher
tkarcher@dl.com
(212) 259-6050
C0532390312771/1617473.1
TriMont Real Estate Advisors, Inc.
Todd Meyers
TMeyers@KilpatrickStockton.com
(404) 815-6482
Mark Fink
MFink@KilpatrickStockton.com
(404) 745-2549
CWCapital Management LLC/ C-111 Asset
Management LLC
David Neff
DNeff@perkinscoie.com
(312) 324-8689
Lehman ALI Inc.
Brian Greer
brian.greer@dechert.com
(212) 698-3536
Michael Sage
michael.sage@dechert.com
(212) 698-3503
Apollo Investment Corporation
Alan Kornberg
akomberg@paulweiss.com
(212) 373-3209
Andrew Ehrlich
aehrlich@paulweiss.com
(212) 373-3166
Fried Frank
Bonnie Steingart
bonnie.steingart@friedfrank.com
(212) 859-8004
Brad Scheler
brad.scheler@friedfrank.com
(212) 859-8019
Honorable Shelley C. Chapman
March 9, 2011
Page 5
Appaloosa Investment L.P.I.
Lee Attanasio
lattanasio@sidley.com
(212) 839-5342
Five Mile Capital Partners LLC
Adam L. Shiff
ashiff@kasowitz.com
(212) 506-1732
United States Trustee
Paul Kenan Schwartzberg
paul.schwartzberg@usdoj.gov
(212) 510-0500
C0532390312771/1617473.1