In re MFI Partners L.P.

Host Hotels & Resorts

Our attorneys represented an affiliate of Host Marriott, a subordinate secured lender, in the Chapter 11 case of a property owner. Our team had a significant victory following an eight-day trial in the U.S. Bankruptcy Court for the District of Columbia. Host Marriott was the largest creditor of MFI Partners, L.P. - an affiliate of The Carlyle Group which owned 14 Fairfield Inn Hotels. MFI filed for bankruptcy, and proposed a plan of reorganization under which it would retain control of the hotels and spend $5 million of estate funds to improve the hotels, in hopes of increasing the value sufficiently to pay its creditors and provide a return to MFI's investors. Vigorously opposing MFI's risky plan, together with MFI's other secured lender Credit Lyonnais, Host Marriott proposed a competing plan of reorganization which would turn over control to Host Marriott and allow it to sell the hotels over an 18 month period and use the funds to pay MFI's creditors. Following the trial, Judge Teel ruled in favor of the creditors on all grounds and confirmed the Host Marriott plan over the debtor's competing plan.

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