ATLANTA? Lodgian is optimistic that its financial reporting woes are nearing an end, and has even hired a new CFO to help move the company forward in that area. Thomas Eppich was named as the company?s new CFO in June, replacing Ken Posner, who resigned from the post earlier that month. While no reason was given for Posner?s resignation, Lodgian CEO Robert Cole said, “Clearly the company has to improve upon its financial reporting.” At presstime, the company?s 1999 year-end results were delayed from release and had still not been officially reported. The financial stability of the small-cap hotel/real estate company has been in question as of late, with reports of a possible sale or takeover swirling in the industry. In fact, a battle has been waging between Lodgian executives and executives of Casuarina Cayman Holdings Ltd. and Edgecliff Holdings LLC for control of the company. Casuarina/Edgecliff offered $6.50 and then $5.75 per share for acquisition of Lodgian earlier this year? but the offers were not accepted. Later, Casuarina/Edgecliff challenged Lodgian?s decision to reduce the number of board seats. As for the delayed reporting of Lodgian?s 1999 year-end results, Cole said that the company was suffering from complications resulting from “the massive accounting mergers of Servico and Impac.” No material changes to the company?s financial position from earlier financial statements filed on May 1 are expected with the latest financial report, according to Cole. He said the company has adequate cash to fund its operating and debt service obligations, but is deferring its June 30 dividend payment due on convertible redeemable equity trust securities. Cole said that by the third quarter of 2000 he expects that Lodgian will be “back on a regular reporting cycle.” Eppich will be responsible for maintaining that cycle, he said, as well as clearing up some back-of-house financial issues. Morgan Stanley Dean Witter has been retained by Lodgian to advise the company on the best ways to maximize shareholder value. Cole, meanwhile, said the company will continue to sell assets to pay down debt. “We have several good deals in the pipeline that will close before year?s end,” he said, noting that all told, he expects to unload $200 million worth of hotels over the next nine to 12 months. Analysts say that the most likely scenario ahead for Lodgian would include a sale of the company or a leveraged buyout by management and investors. But, Cole stressed the company would only consider a deal if it were to receive a fair price. “We?re not in a panic-sell mode,” he said.
