Hospitality Investors Trust Commences Bankruptcy Case
May 20, 2021
On May 19, 2021, Hospitality Investors Trust, Inc. (“HIT”) and its operating partnership, Hospitality Investors Trust Operating Partnership, L.P. (the “OP” and, together with HIT, the “Debtors,” and, together with their subsidiaries, the “Company”), entered into a restructuring support agreement (the “RSA”) with Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC (together with its affiliates, the “Brookfield Investor”), the holder of the sole issued and outstanding share of HIT’s preferred stock designated as the Redeemable Preferred Share, par value $0.01 per share (the “Redeemable Preferred Share”), and all of the issued and outstanding units of limited partner interest in the OP entitled “Class C Units” (“Class C Units” and, together with the Redeemable Preferred Share, the “Existing Preferred Interests”). Pursuant to the RSA, as described in more detail below, the parties to the RSA have agreed to the principal terms of a proposed series of deleveraging or restructuring transactions of the Debtors (the “Restructuring Transactions”). The RSA contemplates that the Restructuring Transactions will be effectuated through a joint prepackaged Chapter 11 plan of reorganization (the “Plan”), in the form and substance attached as an exhibit to the RSA, to be implemented through cases to be commenced by the Debtors under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”).
The overview above and the summaries below of the terms of the RSA and the Restructuring Transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the RSA (including the Plan and all exhibits to the RSA and the Plan), a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated into this Item 1.01 by reference. To the extent there is any inconsistency between these summaries and the full text of the RSA (including the Plan and all exhibits to the RSA and the Plan), the full text of the RSA (including the Plan and all other exhibits thereto) will govern.
On May 19, 2021 (the “Petition Date”), the Debtors filed voluntary petitions (collectively, the “Chapter 11 Cases”) under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors have requested that the Bankruptcy Court administer the Chapter 11 Cases jointly under the caption In re: Hospitality Investors Trust, Inc., et al. To ensure their ability to continue operating in the ordinary course of business, the Debtors have also filed with the Bankruptcy Court a variety of motions seeking “first-day” relief, including requesting authority to pay employee wages and provide employee benefits and to pay certain vendors and suppliers, in each case in the ordinary course of business, and for approval of the DIP Facility (as defined and described below).
Additional information about the Chapter 11 Cases is available at the Debtors’ restructuring website at http://dm.epiq11.com/HospitalityInvestorsTrust.
