Hearing Date: August 25, 2010, at 11:00 a.m.

Eastern time Objection Deadline: August 18, 2010, at 4:00 p.m. Eastern time

DECHERT LLP 1095 Avenue of the Americas New York, New York 10036-6797 Telephone: (212) 698-3500 Facsimile: (212) 698-3599 Michael J. Sage Brian E. Greer Nicole B. Herther-Spiro Attorneys for Lehman ALI Inc. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------ X : In re: : Chapter 11 : 1 INNKEEPERS USA TRUST, et al. : Case No.: 10-13800 : Debtors. : Jointly Administered : ------------------------------------------------------------ X LEHMAN ALI INC.S OBJECTION TO MARRIOTT INTERNATIONAL, INC.S MOTION FOR LIMITED MODIFICATION OF THE AUTOMATIC STAY TO COMPLETE DE-IDENTIFICATION OF THE TROY CENTRAL RESIDENCE INN BY MARRIOTT HOTEL

The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtors 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 Corners) LLC (3650); Grand Prix Atlanta LLC (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 / 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 / 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 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 Floating 2, LLC (9972); Grand Prix Mezz Borrower Fixed, LLC (0252); Grand Prix

15888321

Lehman ALI Inc. (Lehman), submits this Objection (this Objection) to Marriott International, Inc.s Motion for Limited Modification of the Automatic Stay to Complete DeIdentification of the Troy Central Residence Inn by Marriott Hotel [Dkt. No. 131] (the Marriott Motion), and respectfully states as follows: Preliminary Statement For all of the reasons set forth in the Debtors Motion for Entry of an Order Authorizing the Debtors to Assume the Troy Central Franchise Agreement [Dkt. No. 173] (the Motion to Assume), Lehman asserts that the Troy Franchise Agreement (as defined below) has not been terminated pre-petition and accordingly objects to the relief sought in the Marriott Motion. In addition, as described below, Lehman and Marriot are parties to a Comfort Letter Agreement (as defined below) under which Marriott is required to provide Lehman with notice of any default and Lehman has the right to cure any default during any cure period and the right, under certain circumstances, to a reasonable extension of the time to cure. Marriott has taken actions that, if

Mezz Borrower Floating, LLC (5924); 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 RIMV 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 Financing Partnership II LP (9546); Innkeepers Morristown LLC (7834); Innkeepers RI Altamonte LP (3243); Innkeepers RI General LP (3244); Innkeepers RI Northwest LP (7740); Innkeepers Schaumburg LP (9822); Innkeepers Summerfield Gen. II LP (5954); Innkeepers Summerfield Gen. LP (3856); Innkeepers Westchester LP (9618); Innkeepers USA Limited Partnership (3956); Innkeepers USA Trust (3554); KPA Ft. Walton, LLC (4502); KPA HI Ontario LLC (6939); KPA HS Anaheim, LLC (0302); KPA Leaseco II, Inc. (6868); KPA Leaseco Holding Inc. (2887); KPA Leaseco, Inc. (7426); KPA RIGG, LLC (6706); KPA RIMV, 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 its affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, FL 33480.

effective, not only violate the Debtors rights under the Troy Franchise Agreement and various forbearance agreements, but also violate Lehmans cure rights under the Comfort Letter Agreement. Accordingly, the Marriot Motion should be denied. As the Court is aware, the Marriott Motion initiated a contested matter that has resulted in the production of documents by both Marriott and the Debtors as well as depositions of certain employees of Marriott and the Debtors. Lehman understands that depositions related to the Marriott Motion have been scheduled for August 19 and August 23 and that, following a discovery conference, the Court set Monday, August 23 as the discovery cutoff and directed Marriott to extend the Debtors objection deadline to that date. Accordingly, Lehman requested that Marriott extend Lehmans objection deadline so that it has the same opportunity as the Debtors to object to the Marriott Motion after the completion of discovery. Marriott denied that request. As a result, Lehman is forced to file this Objection in order to preserve its rights in connection with the Marriott Motion and reserves its right to supplement this objection after discovery is completed. Background 1. On July 19, 2010, (the Petition Date), the Debtors filed voluntary petitions for

relief under chapter 11 of Title 11 of the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the Southern District of New York. These chapter 11 cases (the Chapter 11 Cases) are being jointly administered in this Court. 2. The Debtors have remained debtors in possession under sections 1107 and 1108

of the Bankruptcy Code since the Petition Date. An official committee of unsecured creditors (the Committee) was appointed on July 28, 2010. As of the date of this filing, no trustee or examiner has been appointed in the Chapter 11 Cases.

3.

Twenty 2 of the Debtors (each, a Floating Rate Debtor and together, the

Floating Rate Debtors) are borrowers under that certain Loan Agreement, dated as of June 29, 2007, in the original principal amount of $250,000,000.00, between and among the Floating Rate Debtors, as borrowers, and Lehman, as lender (the Floating Rate Loan Agreement).3 The Floating Rate Debtors obligations under the Floating Rate Loan Agreement are secured by 20 separate mortgages (each, a Floating Rate Mortgage) that each grant Lehman a first lien mortgage on the applicable hotel property, a lien on all cash, accounts and proceeds of the applicable borrower, and an absolute assignment of rents of the applicable hotel property. 4. One of the 20 hotel properties that is part of Lehmans collateral is the property

commonly known as the Troy Central Residence Inn by Marriott Hotel, located at 2600 Livernois Road, Troy, Michigan 48083-1234 (the Troy Central Hotel). The Troy Central Hotel is the subject of a Residence Inn by Marriott Relicensing Franchise Agreement (Troy Franchise Agreement) dated as of June 29, 2007, between Marriott and Debtor Grand Prix Floating Lessee LLC. Lehman, as senior secured lender with a first lien on the Troy Central Hotel, and Marriott are parties to a Letter Agreement dated as of June 29, 2007 (the Comfort Letter Agreement), with respect to the Troy Franchise Agreement. Under the Comfort Letter Agreement, if there is a default by under the Troy Franchise Agreement, Lehman has the right to

The Floating Rate Debtors are: (1) KPA/GP Valencia LLC; (2) Grand Prix West Palm Beach LLC; (3) KPA/GP Ft. Walton Beach LLC; (4) Grand Prix Ft. Wayne LLC; (5) Grand Prix Indianapolis LLC; (6) KPA/GP Louisville (HI) LLC; (7) Grand Prix Bulfinch LLC; (8) Grand Prix Woburn LLC; (9) Grand Prix Rockville LLC; (10) Grand Prix East Lansing LLC; (11) Grand Prix Grand Rapids LLC; (12) Grand Prix Troy (Central) LLC; (13) Grand Prix Troy (SE) LLC; (14) Grand Prix Atlantic City LLC; (15) Grand Prix Montvale LLC; (16) Grand Prix Morristown LLC; (17) Grand Prix Albany LLC; (18) Grand Prix Addison (SS) LLC; (19) Grand Prix Harrisburg LLC; (20) Grand Prix Ontario LLC. The Floating Rate Loan Agreement originally included three additional borrowers (Grand Prix Wichita LLC, Grand Prix Columbus LLC and Grand Prix Tallahassee LLC), which borrowers were subsequently released from their obligations under the Floating Rate Loan Agreement.

cure such default during any cure period established and, under certain circumstances, has the right to a reasonable extension of time to cure. 5. In the Marriott Motion, Marriott has asserted that the Troy Franchise Agreement

was terminated pre-petition (effective post-petition) and seeks relief from stay to permanently remove the Troy Central Hotel from the Marriott system and complete the de-identification of the Troy Central Hotel. The Debtors have yet to file their objection to the Marriott Motion, but have filed their Motion to Assume the Troy Franchise Agreement, in which they make plain that the Troy Franchise Agreement was not, in fact, terminated pre-petition and seek authorization to assume the Troy Franchise Agreement. Objection 6. The Troy Central Hotel constitutes part of Lehmans collateral as secured lender.

The value of the Troy Central Hotel and, accordingly, Lehmans collateral, would be substantially diminished should the Troy Franchise Agreement be terminated and the Troy Central Hotel cease to operate as a Residence Inn by Marriott. Accordingly, Lehman has a substantial interest in the outcome of the Marriott Motion and the Motion to Assume. 7. Lehman submits that the Marriott Motion should be denied for the following

reasons: First, for all of the reasons stated in the Debtors Motion to Assume, which arguments are incorporated herein, the Troy Franchise Agreement was not terminated pre-petition, but was extant on the Petition Date and is subject to assumption by the Debtors. Specifically: Under the Forbearance Agreement dated September 15, 2009, relating to a asserted quality assurance program default under the Troy Franchise Agreement (the QA Default), Debtor had until June 30, 2010 to cure any default. Accordingly, Marriotts precipitous Notice of Continuing Default and Termination dated June 21, 2010 was delivered nine (9) days prior to the end of the cure period, in violation of the September 15, 2009 Forbearance Agreement, and could not effect a termination of the Troy Franchise Agreement. In other words, Marriott had no right to terminate the Troy Franchise Agreement on June

21, 2010, because of the existence of the forbearance period established by written agreement between Marriott and the Debtors. In a March 16, 2010 Notice of Default relating to the failure to complete various property improvements prior to a certain deadline (the PIP Default) established a cure period, to expire on June 14, 2010. Marriott subsequently agreed to forbear from further exercising remedies until June 28, 2010, including in relation to the Troy Central Hotel, pursuant to a forbearance agreement with the Debtors dated June 11, 2010. This forbearance period was also in effect on June 21, 2010, the date of the purported QA Default termination. By agreement dated June 25, 2010, (four days after the purported QA Default termination) the forbearance period relating to the PIP Default was further extended to July 18, 2010, although in this agreement Marriott reserved any rights to terminate [the Troy] Franchise Agreement in accordance with the Notice of Continuing Default Forbearance Agreement dated September 15, 2009. Upon information and belief, when the Debtors filing was delayed specifically at Marriotts request, Marriott gave the Debtors a further one-day extension of the forbearance period with respect to the PIP Default to July 19, 2010, the Petition Date. Accordingly, there was no pre-petition termination with respect to the PIP Default. In the July 15, 2010 Notice of Termination, De-Identification and Closure of Reservation Services, dated days prior to the filing of these Chapter 11 Cases, Marriott informed the Debtors that it intended to terminate the Troy Central Hotels Marriott reservation services. The July 15, 2010 Notice did not purport to effect a terminate the Troy Franchise Agreement, it merely made reference to the ineffective June 21 termination notice. Accordingly, there was no pre-petition termination with respect to the QA Default. Further, Marriott should be estopped from terminating the Troy Franchise Agreement based on its actions leading up to the filing of the Debtors Chapter 11 Cases. Although the Debtors and Marriott failed to reach an agreement on the Troy Central Hotel prior to the Petition Date as it did with respect to the other Marriott hotels, upon information and belief, the Debtors reached an informal agreement with Marriott that each party would retain its rights to deal with the Troy Central Hotel in the bankruptcy. Upon information and belief, Marriott pressured the Debtors to delay filing the Chapter 11 Cases so that they could be paid further franchise fees, which the Debtors agreed to do as an accommodation. Marriott then proceeded to partially shut down the reservation system for the Troy Central Hotel on the morning of the Petition Date. Marriotts actions leading up to the Petition Date appear not to be in good faith and may subject Marriot to estoppel. Second, the Marriott Motion should be denied because, if granted, and if the stay

8.

is lifted with respect to the Troy Franchise Agreement, the financing contemplated by the term

sheet relating to the proposed $17.5 million debtor-in-possession financing facility between the Floating Rate Debtors and Solar Finance, Inc. (Solar), an affiliate of Lehman [Dkt. No. 23, Exhibit B] (the Floating Rate DIP Term Sheet), which is an integral part of the Debtors restructuring efforts, might not be available. The Troy Central Hotel is part of the proposed collateral for the loans contemplated by the Floating Rate DIP Term Sheet, and termination of the Troy Franchise Agreement (or any other franchise agreement relating to a hotel owned by any of the Floating Rate Debtors) would violate the Floating Rate DIP Term Sheet. Floating Rate DIP Term Sheet at p. 11. In short, if the Marriott Motion is granted, the collateral available to secure the contemplated loans would be substantially diminished, and Lehman and Solar will be forced to reassess the proposed debtor-in-possession financing. 9. Third, Marriott has not acted in good faith in seeking to terminate the Troy

Franchise Agreement because such termination would be a violation of the Comfort Letter Agreement between Marriott and Lehman. Under the Comfort Letter Agreement, Lehman has its own cure rights with respect to the Troy Franchise Agreement, which are, in certain ways, more expansive than the Debtors cure rights, because Lehman has the right, under certain circumstances, to a reasonable extension of time to cure defaults under the Troy Franchise Agreement. By attempting to terminate the Troy Franchise Agreement prior to the expiration of cure periods, Marriott violated the Comfort Letter Agreement by attempting to cut off Lehmans cure rights under the Comfort Letter Agreement with respect to defaults under the Forbearance Agreement. For this reason alone, Marriott should be enjoined from taking any further action to terminate the Troy Franchise Agreement or remove the Troy Central Hotel from the Residence Inn by Marriott system.

WHEREFORE, for the foregoing reasons, Lehman respectfully requests that the Court (i) deny the Marriott Motion and (ii) grant Lehman such other and further relief as the Court deems appropriate. Dated: New York, New York August 18, 2010 DECHERT LLP

By:/s/ Michael J. Sage Michael J. Sage Brian E. Greer Nicole B. Herther-Spiro 1095 Avenue of the Americas New York, New York 10036 Telephone: (212) 698-3500 Facsimile: (212) 698-3599