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 Midland Loan Services, a Division of PNC Bank, N.A. 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

OBJECTION OF MIDLAND LOAN SERVICES TO THE MONTHLY APPLICATION OF MORRISON & FOERSTER LLP FOR COMPENSATION FOR SERVICES AND REIMBURSEMENT OF EXPENSES AS ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR THE PERIOD FROM FEBRUARY 1, 2011 THROUGH FEBRUARY 28, 2011 Midland Loan Services, a division of PNC Bank, N.A. (Midland)1 hereby files this Objection of Midland Loan Services (the Objection) to the Monthly Application of Morrison & Foerster LLP (Morrison Foerster) for Compensation for Services and Reimbursement of Expenses as Attorneys for the Official Committee of Unsecured Creditors for the Period From

Midland is the special servicer pursuant to the Pooling and Servicing Agreement dated as of August 13, 2007 (the Special Servicing Agreement) for that certain secured loan in the amount of not less than $825,402,542 plus interest, costs and fees (the Fixed Rate Mortgage Loan) owed by certain of the above captioned Debtors. The Fixed Rate Mortgage Loan is secured by cross-collateralized and crossdefaulted first priority mortgages, liens and security interests on forty-five (45) hotel properties and their contents and assets related thereto (collectively, the Midland Properties) and the other collateral, including all cash collateral as such term has meaning under section 363 of the Bankruptcy Code, generated by the Midland Debtors hotel and business operations with respect to the Midland Properties (the Midland Cash Collateral), as set forth in the Fixed Rate Mortgage Loan Agreement.

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February 1, 2011 Through February 28, 2011 (the February Fee Application),2 and in support hereof, respectfully states as follows: Background 1. On August 12, 2010, the Court entered its Order Authorizing the Establishment of

Procedures for Interim Compensation and Reimbursement of Expenses for Professionals and Official Committee Members (the Fee Procedures Order).3 The Fee Procedures Order provides that nothing in this Order shall affect in any way any special servicers right to object to the use of its cash collateral to fund all or part of the fees and expenses of professionals compensated from the Debtors bankruptcy estates in monthly, interim, or final fee requests nor rule on the appropriateness of such cash collateral use or any entities rights with respect thereto. Fee Procedures Order at p. 7, 10. Pursuant to the Fee Procedures Order, Notice Parties must file objections to the February Fee Application on or before May 5, 2011, which is at least twenty (20) days after service of the monthly fee request.4 2. On April 6, 2011, Morrison Foerster filed its February Fee Application seeking

approval of $239,991.50 in fees and $10,532.85 in expenses, and corresponding payment of 80% of the fees and 100% of the expenses. 3. The use of Midlands Cash Collateral is governed by the Final Order 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 dated September 2, 2010 (as amended, the Final Cash Collateral Order).5 The Final Cash

2 3 4 5

Docket No. 1084. Docket No. 189. Midland is a Notice Party under the Fee Procedures Order. Docket No. 402.

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Collateral Order establishes, among other things, a maximum amount that may be spent from Cash Collateral to investigate the Loan Obligations and the Prepetition Collateral and/or a potential Challenge (as those terms are defined in the Final Cash Collateral Order) of $150,000 (the Lien Review Cap). Objection 4. As discussed in Midlands previous objections to Morrison Foersters monthly

and interim fee applications, fees for categories of time identified by Morrison Foerster as Lease / Real Estate Analysis, 2007 Transaction Investigation, and Prepetition Lien Review, are subject to the $150,000 Lien Review Cap.6 Through January 31, 2011, Morrison Foerster had already incurred fees of $622,076 on these categories of time,7 and in the February Fee Application, Morrison Foerster requests an additional $25,149 in fees for categories of time that are subject to the Lien Review Cap. Midland objects to the payment of fees in excess of $150,000 from Midlands Cash Collateral for categories of time subject to the Lien Review Cap. 5. If the February Fee Application is granted and additional fees approved for the

2007 Transaction Investigation, the fees for that task may not be paid from Midlands Cash

See, e.g., Midland Loan Services, Incs Limited Objection to the Monthly Application of Morrison & Foerster LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Official Committee of Unsecured Creditors for the Period from October 1, 2010 through October 30, 2010 [Docket No. 770].

See First Interim Application of Morrison & Foerster LLP as Counsel for the Official Committee of Unsecured Creditors for Compensation and Reimbursement of Expenses Incurred for the Period July 28, 2010 Through November 30, 2010 [Docket No. 825] (the First Interim Fee Application) (identifying fees through November 30, 2010 of $97,721.25 for Lease / Real Estate Analysis, $186,454.00 for 2007 Transaction Investigation, and $138,389.75 for Prepetition Lien Review); see also Monthly Application of Morrison & Foerster LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Official Committee of Unsecured Creditors for the Period From December 1, 2010 Through December 31, 2010 [Docket No. 877] (the December Fee Application) (identifying fees for December 2010 of $54,312.00 for 2007 Transaction Investigation and $19,629.00 for Prepetition Lien Review); see also Monthly Application of Morrison & Foerster LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Official Committee of Unsecured Creditors for the Period From January 1, 2011 Through January 31, 2011 [Docket No. 982] (the January Fee Application) (identifying fees for January 2011 of $122,713.50 for 2007 Transaction Investigation, $609.00 for Lease / Real Estate Analysis, and $2,247.50 for Prepetition Lien Review).
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Collateral.

As such, the $25,149 requested for services related to the 2007 Transaction

Investigation may not be funded from Midlands Cash Collateral. General Reservation of Rights 6. Midland reserves its right to submit additional objections to the compensation

requested by Morrison Foerster when Morrison Foerster submits a final fee application. The failure to raise additional objections at this time is not a wavier of any additional objections thereto. Local Rule 9013-1(a) 7. 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, Midland submits that this pleading satisfies Local Bankruptcy Rule 9013-1(a). WHEREFORE, Midland respectfully requests that the Court enter an order (i) sustaining this Objection and declining to authorize payment of any portion of the sum referenced above from Midlands Cash Collateral; (ii) reducing the compensation payable under the February Fee Application accordingly; and (iii) granting Midland such other and further relief as is equitable and just. Dated: April 29, 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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- and 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 MIDLAND LOAN SERVICES, A DIVISION OF PNC BANK, N.A.

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