DEWEY & LEBOEUF

By Electronic Mail
Honorable Shelley C. Chapman
United States Bankruptcy Judge
One Bowling Green
New York, NY 10004-1408
March 9, 2011
Dewey & LeBoeuf LLP
1301 Avenue of the Americas
New York, NY 10019-6092
tel +1 212 259 8530
fax +1 212 259 6538
mbienenstock@dl.com
Re: In re Innkeepers USA Trust, eta/. ("Debtors") Chapter 11 No. 10-
13800 (SCC) - Debtors' Stalking Horse Motion
Dear Judge Chapman:
Pursuant to the Court's direction on the teleconference of March 7, 2011, we
submit this letter as attorneys for the ad hoc committee of preferred shareholders (the
"Ad Hoc Committee") to advise the court as to the objections the Ad Hoc Committee
plans to propound at tomorrow's hearing.
Five Mile-Lehman Transaction: If the proposed order the Debtors submit contain
the provisions the Debtors and the Ad Hoc Committee are now finalizing, and if the
proposed order is satisfactory to the Court, the Ad Hoc Committee will not need to
propound any objections at the hearing. Its various objections will be preserved for the
hearing to approve the sale transaction and the confirmation hearing, other than
objections relating to bidding procedures and the breakup fee which will be rendered
moot.
If the proposed order the Debtors submit does not contain the provisions the
Debtors and the Ad Hoc Committee are now finalizing, the Ad Hoc Committee will
propound each objection in its pleading filed on February 25, 2011, other than the
objection that the sale of the hotels not subject to blanket mortgages should not be tied
to the sale of the hotels subject to blanket liens. If the Debtors confirm that the
transaction is not conditioned on preferred shareholders releasing any entity, that
objection will be moot.
NEWYORKILONDONMULTINATIONALPARTNERSHIPIWASHINGTON,DC
ALBANYIALMA TYIAUSTI N 1 B EIJI N Gl BosTON 1 BRUSSELSICHARLOTTE I CHI CAGOI Du BAI
FRANKFURTIHARTFORDIHONGKONGIHousToNIJACKSONVILLEIJOHANNESBURG (PTY)Lm. I LosANGELES MILAN I Moscow I
PARISMULTINATIONALPARTNERSHIP I RIYADHAFFILIATEDOFFICE I ROME I SAN FRANCISCO I SILICON VALLEY I WARSAW
Honorable Shelley C. Chapman
March 9, 2011
Page 2 of 3
Thus, the main objections that might be propounded are: (i) breakup fee and
reimbursement are unwarranted under section 363, (ii) the sale process was fatally
flawed, (iii) the stalking horse motion is the product of breaches of fiduciary duty by the
trustees and management of Innkeepers USA Trust to the preferred shareholders, (iv)
the proposed transaction is expressly conditioned on an unfiled chapter 11 plan and
disclosure statement giving rise to due process issues if the hearing proceeds, (v) there
is no basis alleged to approve payments of fees and charges to Midland given its
blanket mortgage is undersecured, (vi) there is no basis alleged to require a $200
million payment to Lehman as part of any competing bid, and (vii) the proposal is an
illegal sub rosa plan.
Other Transaction. If the Debtors exercise their fiduciary out and propound
another transaction as the stalking horse bid, the Ad Hoc Committee reserves its rights
to propound any and all objections to such transaction if it is not fair to members of the
Ad Hoc Committee. Conversely, if it is fair, the Ad Hoc Committee will support it.
Finally, we want to emphasize that the Ad Hoc Committee's objections are
propounded solely for its members and are unique to the committee.
MJB/ds
CC by email:
Anup Sathy, Esq.
Paul Basta, Esq.
Daniel Donovan, Esq.
John Penn, Esq.
Lenard Parkins, Esq.
Todd Meyers, Esq.
David Neff, Esq.
Brian Greer, Esq.
Michael Sage, Esq.
Alan Kornberg, Esq.
Andrew Ehrlich, Esq.
Bonnie Steingart, Esq.
Brad Scheler, Esq.
Lee Attanasio, Esq.
Respectfully,

Ma'/9Bienenstock
Honorable Shelley C. Chapman
March 9, 2011
Page 3 of 3
Adam Shiff, Esq.
Paul Schwartzberg, Esq.
Lorenzo Marinuzzi, Esq.
Mark Elmore, Esq.
Brian Walsh, Esq.
Lawrence Gottesman, Esq.
Patrick Bryan, Esq.