Hudson Hotels Announces Reorganization Plan

ROCHESTER, NY— Hudson Hotels Corp. has filed a Chapter 11 proceeding under the U.S. Bankruptcy Code. At the same time, the company has agreed, in principal, with its senior lender, RHD Capital Ventures, LLC, to a deal whereby RHD will purchase substantially all of the assets of the company. A definitive asset purchase agreement is expected to be signed and filed with the court within the next week. RHD is the owner of Hudsons mezzanine debt, presently totaling in excess of $20 million. The purchase by RHD would create a new operating company which would continue managing and operating the assets of Hudson. The sale process is expected to take approximately 60 days. During the pendency of the Chapter 11 case, RHD has agreed to provide debtor in possession financing to Hudson in order to sustain its activities until the sale is complete. The headquarters for the new company is expected to remain in Rochester, New York . Talking about the current condition of the company, Thomas Blank, president /CEO, said in a statement that the company has worked to trim overhead and debt, which had been taken on in an effort to increase the number of hotels in its portfolio as part of a plan for an initial public offering (IPO). However, “the IPO failed when the credit and equity markets collapsed in the summer of 1998. Our efforts to reduce overhead and debt were meeting with some success until the economic downturn in 2001, compounded by the events of September 11, brought the travel and tourism industry to a standstill. The bottom of this cycle has been low and long, and I dont anticipate any recovery until sometime in 2004,” he noted. Blank said he anticipates that this reorganization plan will allow the 25 owned and 44 managed hotels currently in Hudsons portfolio to continue with operations undisturbed under the new company going forward.