James H.M. Sprayregen, P.C.

Paul M. Basta
Jennifer L. Marines
KIRKLAND & ELLIS LLP
60 1 Lexington A venue
New York, NY 10022-4611
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
and
Anup Sathy, P.C. (admitted pro hac vice)
Marc J. Carmel (admitted pro hac vice)
KIRKLAND & ELLIS LLP
300 North LaSalle
Chicago, IL 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 a/.,
1
Debtors.
)
) Chapter 11
)
) Case No. 10-13800 (SCC)
)
) Jointly Administered
______________________________ )
PERIODIC REPORT REGARDING VALUE,
OPERATIONS, AND PROFITABILITY OF ENTITIES IN WHICH THE
DEBTORS' ESTATES HOLD A SUBSTANTIAL OR CONTROLLING INTEREST
The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtor's federal tax identification
number, are: GP AC Sublessee LLC (5992); Grand Prix Addison (RI) LLC (3740); Grand Prix Addison (SS)
LLC (3656); Grand Prix Albany LLC (3654); Grand Prix Altamonte LLC (3653); Grand Prix Anaheim Orange
Lessee LLC (5925); Grand Prix Arlington LLC (3651); Grand Prix Atlanta (Peachtree Comers) LLC (3650);
Grand Prix Atlanta L LC (3649); Grand Prix Atlantic City LLC (3648); Grand Prix Bellevue LLC (3645); Grand
Prix Belmont LLC (3643); Grand Prix Binghamton LLC (3642); Grand Prix Bothell LLC (3641); Grand Prix
Bulfinch LLC (3639); Grand Prix Campbell I San Jose LLC (3638); Grand Prix Cherry Hill LLC (3634); Grand
Prix Chicago LLC (3633); Grand Prix Columbia LLC (3631); Grand Prix Denver LLC (3630); Grand Prix East
Lansing LLC (3741); Grand Prix El Segundo LLC.(3707); Grand Prix Englewood I Denver South LLC (3701);
Grand Prix Fixed Lessee LLC (9979); Grand Prix Floating Lessee LLC (4290); Grand Prix Fremont LLC
(3703); Grand Prix Ft. Lauderdale LLC (3705); Grand Prix Ft. Wayne LLC (3704); Grand Prix Gaithersburg
LLC (3709); Grand Prix General Lessee LLC (9182); Grand Prix Germantown LLC (3711); Grand Prix Grand
Rapids LLC (3713); Grand Prix Harrisburg LLC (3716); Grand Prix Holdings LLC (9317); Grand Prix
(continued on next page)
K&E 17679362
. ~
:r.
This is the report (the "Periodic Report") as of September 7, 2010 (based on the unaudited
income statement and balance sheet information dated as of December 31, 2009 and contained
on Exhibit A hereto), on the value, operations, and profitability of those entities in which the
estates of Innkeepers USA Limited Partnership ("Innkeepers USA LP") and KP A Leaseco
Holding Inc. ("KP A Leaseco and, together with Innkeepers USA LP and the other above
captioned debtors, the "Debtors") hold a substantial or controlling interest, as required by Rule
2015.3 ofthe Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). Specifically,
the estate oflnnkeepers USA LP, through its non-Debtor subsidiary, KPA Raleigh, LLC, owns a
49% ownership interest in Genwood Raleigh, LLC, a fee owner of the Sheraton in Raleigh,
North Carolina. Further, the estate of KPA Leaseco, through its non-Debtor subsidiary, KPA
Raleigh Leaseco, LLC, owns a 49% ownership interest in Genwood Raleigh Lessee, LLC, the
property lessee of the Sheraton in Raleigh, North Carolina. None of KPA Raleigh, LLC,
Genwood Raleigh, LLC, KP A Raleigh Leaseco, LLC, or Genwood Raleigh Lessee, LLC is a
Debtor in the above-captioned chapter 11 cases.
Horsham LLC (3728); Grand Prix IHM, Inc. (7254); Grand Prix Indianapolis LLC (3719); Grand Prix Islandia
LLC (3720); Grand Prix Las Colinas LLC (3722); Grand Prix Lexington LLC (3725); Grand Prix Livonia LLC
(3730); Grand Prix Lombard LLC (3696); Grand Prix Louisville (RI) LLC (3700); Grand Prix Lynnwood LLC
(3702); Grand Prix Mezz Borrower Fixed, LLC (0252); Grand Prix Mezz Borrower Floating, LLC (5924);
Grand Prix Mezz Borrower Floating 2, LLC (9972); Grand Prix Mezz Borrower Term LLC ( 4285); Grand Prix
Montvale LLC (3706); Grand Prix Morristown LLC (3738); Grand Prix Mountain View LLC (3737); Grand
Prix Mt. Laurel LLC (3735); Grand Prix Naples LLC (3734); Grand Prix Ontario Lessee LLC (9976); Grand
Prix Ontario LLC (3733); Grand Prix Portland LLC (3732); Grand Prix Richmond (Northwest) LLC (3731);
Grand Prix Richmond LLC (3729); Grand Prix RIGG Lessee LLC (4960); Grand Prix RIMY Lessee LLC
(4287); Grand Prix Rockville LLC (2496); Grand Prix Saddle River LLC (3726); Grand Prix San Jose LLC
(3724); Grand Prix San Mateo LLC (3723); Grand Prix Schaumburg LLC (3721); Grand Prix Shelton LLC
(3718); Grand Prix Sili I LLC (3714); Grand Prix Sili II LLC (3712); Grand Prix Term Lessee LLC (9180);
Grand Prix Troy (Central) LLC (9061); Grand Prix Troy (SE) LLC (9062); Grand Prix Tukwila LLC (9063);
Grand Prix West Palm Beach LLC (9065); Grand Prix Westchester LLC (3694); Grand Prix Willow Grove
LLC (3697); Grand Prix Windsor LLC (3698); Grand Prix Woburn LLC (3699); Innkeepers Financial
Corporation (0715); Innkeepers USA Limited Partnership (3956); Innkeepers USA Trust (3554); KPA HI
Ontario LLC (6939); KPA HS Anaheim, LLC (0302); KPA Leaseco Holding Inc. (2887); KPA Leaseco, Inc.
(7426); KPA RIGG, LLC (6706); KPA RIMY, LLC (6804); KPA San Antonio, LLC (1251); KPA Tysons
Corner RI, LLC (1327); KPA Washington DC, LLC (1164); KPA/GP Ft. Walton LLC (3743); KPA/GP
Louisville (HI) LLC (3744); KPA/GP Valencia LLC (9816). 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.
2
K&E I 7679362
~ ,.
This Periodie Report contains n:ports (''Entity Reports'') on the value, operations. and
profitability of each entity in which the Debtors own a substantial or controlling interest. The
Entity Reports consist of two exhibits. Exhibit A contains a net book value estimate f(lr each
such entity as of a daie not more than two years prior to the date of this rcporL l':xhibit B
contains balance sheets (Exhibit B-1) and statements of income (loss) B-2) for cadl
such entity included in this Periodic Rcporl as of and for the year ended December 31, 2009.
along witlJ HOtcs supplcmeming all oflhe exhibits (Exhibit B-J).
Pursuant to the Debtors' agreement with tbe United Stales Trustee i(H' the Snutht:m District or
New York, the Debtors arc submitting the information conlained un Exhihit A and Exhibit Bin
lieu of the three exhibits listed on Otlicial Form 26.
rhe undersigned, having reviewed the above listing of entities in which the Debtors' estates hold
a substantial or controlling interest, and being familiar with the Debtors' financial al1airs.
verifies under the. of pe!jury that the listing is complete, accurate, and truthful to the best
of his knowledge.
By:
Signature of Authorized Individual
Natlwn Cook ___ ,-----,--___ _
Name or Authorized Individual
Chief Financial 001ecr
.... SA T_ru_ s_t __
Title of Authorized lndiviclual
K&l' 1709362
3
Exhibit A
% Ownership Interest Net Book
Name of Entity Held bv the Debtors Value
KP A Raleigh, LLC 100% .$162,000
1
KPA Raleigh Leaseco, LLC 100% $162,000
49% (indirect
Genwood Raleigh Lessee, LLC ownership) ($2,507 ,000)
49% (indirect
Genwood Raleigh, LLC ownership) ($3,886,000)
In the ordinary course of business, the Debtors do not record the earnings or losses ofKPA Raleigh, LLC and KPA Raleigh
Leasco, LLC on their individual general ledgers because those amounts are reflected through the consolidation process in
the preparation of the Debtors' consolidated entity financial statements. The $162,000 net book values of KPA Raleigh,
LLC's 49% ownership interest in Genwood Raleigh, LLC and of KPA Raleigh Leasco, LLC's 49% ownership interest in
Genwood Raleigh Lessee, LLC are each reflected on the. consolidated entity financial statements ofinnkeepers USA LP.
K&E 17679362
Balance Sheets as of December 31, 2009
Unaudited
Assets
Current Assets
Cash and cash equivalents
Restricted Cash
Accounts Receivable
Due from Genwood Raleigh Lessee, LLC
Inventories
Prepaid expenses and other current assets
Total Current Assets
Property and equipment, net
Total non-current assets
Total Assets
Liabilities and Members' Capital
Current Liabilities
Accounts payable and accrued expenses
Due to Genwood Raleigh, LLC
Advance deposits
Total Current Liabilities
Long Term Debt
Total Liabilities
Members' capital
Members' capital
Total Members' Capital
Total Liabilities and members' capital
ExhibitB-1
KP A Raleigh, LLC KP A Raleigh Leaseco, LLC
$ $ -
- -
- -
$ - $ -
- -
- -
- -
$ - $
Genwood Raleigh Lessee, LLC Genwood Raleigh, LLC
$ 500,573 $
229,678
1,515,915
3,784,186
56,686
140,890
2,214,064 4,013,864
24,421,087
- 24,421,087
$ 2,214,064 $ 28,434,951
$ 892,786 $ 295,678
3,784,186
44,453
4,721,425 295,678
- 32,025,707
4,721,425 32,321,385
(2,507,3612 {3,886,4342
(2,507,361) (3,886,434)
$ 2,214,064 $ 28,434,951
, ......... - . ..., .. ~
Statement of Operations for the year ended December 31, 2009
Unaudited
KPA Raleigh, LLC
Revenues
Rooms $ -
Food and beverage
Other Hotel
Rent Revenue
Total Revenues -
Costs and Expenses
Hotel Operations
General and Administrative Expenses
Rent Expense
Sales and Marketing Costs
Property repair and maintenance
Property taxes
Management fes
Depreciation and amortization
Total Costs and Expenses
Other Expenses
Interest expense, net
Total Other Expenses -
Net income/(loss) $
$
$
Exhibit B-2
KPA Raleigh Leaseco, LLC Genwood Raleigh Lessee, LLC Genwood Raleigh, LLC
$ 8,044,864 $
3,472,679
583,400
3,253,189
12,100,943 3,253,189
4,805,625
2,058,582 258,723
3,253,189
1,023,297
630,685
348,295
834,838
1,704,386
12,606,216 2,311,404
1,032,844
- 1,032,844
$ (505,273) $ (91,059)
Exhibit B-3
Notes to Periodic Report Required by Bankruptcy Rule 2015.3
The financial statements contained in the Periodic Report are unaudited. While management of the Debtors and their affiliates
has made reasonable effm1s to ensure that these financial statements are accurate and complete based upon information
available at the time of preparation, the subsequent receipt of information may result in material changes in the data contained
in these financial statements, and inadvertent errors or omissions may exist.
1. Reservation of Rights. Nothing contained in this Periodic Report shall constitute a waiver of any of the Debtors'
rights or an admission with respect to their chapter 11 cases under the provisions of chapter 11 of the United States
Code (the "Bankruptcy Code") including, but not limited to, matters involving objections to claims, substantive
consolidation, equitable subordination, defenses, characterization or re-characterization of agreements, assumption or
rejection of executory contracts or unexpired leases, and/or causes of action under the provisions of chapter 5 of the
Bankruptcy Code or any other relevant applicable laws to recover assets or avoid transfers.
2. Basis of Presentation. The accompanying unaudited financial information presented on Exhibits B-1 and B-2
represents the financial position and statements of operations (collectively, the "Financial Information") of the non-
Debtor entities in which the Debtors hold a substantial or controlling interest (the" Reporting Entities").
The Financial Information has been assembled from the general ledgers of the Reporting Entities. The Financial
Information has generally been maintained in accordance with U.S. generally accepted accounting principles ("U.S.
GAAP").
The Financial Information is presented on an unconsolidated, separate legal entity basis (but with the balance sheets
for all Reporting Entities on one page and the income statements for all Repm1ing Entities on another for ease of
review). In the ordinary course of business, the Debtors do not record the earnings or losses ofthe Repm1ing Entities
on their individual general ledgers because the related amounts are reflected through the consolidation process in the
preparation of the Debtors' consolidated entity financial statements.
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and
assumptions that affect the repm1ed amounts of assets and liabilities and disclosure of contingent assets and liabilities
as of the date the financial statements, as well as the reported amounts of revenues and expenses during the reporting
period. Actual amounts and results could differ from those estimates.
Given, among other things, the uncertainty surrounding the collection and ownership of certain assets and the
valuation and nature of certain liabilities, to the extent that a non-Debtor entity shows more assets than liabilities, this
is not an admission that the non-Debtor entity was solvent on July 19, 2010 (the "Petition Date") or at any time prior
to the Petition Date, including the date as of or for the period of any financial statements or other financial information
included in this Periodic Repm1. Likewise, to the extent that a non-Debtor entity shows more liabilities than assets,
this is not an admission that the non-Debtor entity was insolvent at the Petition Date or at any time prior to the Petition
Date, including the date as of or for the period of any financial statements or other financial information included in
this Periodic Report.
The accompanying Financial Information does not include all footnotes and certain financial presentations normally
required by U.S. GAAP.
3. Current values. Unless otherwise indicated, the basis for all current values included in this Periodic Report was the
net book value from relevant corporate books and records as of the close of business on December 31, 2009. The net
book value as of December 31, 2009, may not reflect the current value of the respective assets.
For the reasons discussed above, the Debtors caution readersnot to place undue reliance upon the information contained in this
Periodic Report.
K&E 17679362
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