Lenard M. Parkins (NY Bar No. 4579124) John D. Penn (NY Bar No.

4847208) Mark Elmore (admitted pro hac vice) HAYNES AND BOONE, LLP 30 Rockefeller Plaza, 26th Floor New York, New York 10112 Telephone: (212) 659-7300 Facsimile: (212) 918-8989 Attorneys for Midland Loan Services, a Division of PNC Bank, N.A. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al., Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

MIDLAND LOAN SERVICES RESERVATION OF RIGHTS WITH RESPECT TO THE MONTHLY APPLICATION OF KIRKLAND & ELLIS LLP FOR COMPENSATION FOR SERVICES AND REIMBURSEMENT OF EXPENSES AS ATTORNEYS FOR THE DEBTORS AND DEBTORS IN POSSESSION FOR THE PERIOD FROM DECEMBER 1, 2010 THROUGH DECEMBER 31, 2010 Midland Loan Services, a division of PNC Bank, N.A. (Midland)1 hereby files this Reservation of Rights With Respect to the Monthly Application of Kirkland & Ellis LLP (Kirkland) for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors and Debtors in Possession for the Period from December 1, 2010 through December
Midland is the special servicer pursuant to the Pooling and Servicing Agreement dated as of August 13, 2007 (the Special Servicing Agreement) for that certain secured loan in the amount of not less than $825,402,542 plus interest, costs and fees (the Fixed Rate Mortgage Loan) owed by certain of the above captioned Debtors. The Fixed Rate Mortgage Loan is secured by cross-collateralized and crossdefaulted first priority mortgages, liens and security interests on forty-five (45) hotel properties and their contents and assets related thereto (collectively, the Midland Properties) and the other collateral, including all cash collateral as such term has meaning under section 363 of the Bankruptcy Code, generated by the Midland Debtors hotel and business operations with respect to the Midland Properties (the Midland Cash Collateral), as set forth in the Fixed Rate Mortgage Loan Agreement.
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31, 2010 (the December Fee Application),2 and in support thereof, respectfully represents as follows: BACKGROUND 1. On August 12, 2010, the Court entered its Order Authorizing the Retention and

Employment of Kirkland & Ellis LLP as Attorneys for the Debtor and Debtors in Possession Nunc Pro Tunc to the Petition Date (the Retention Order). Pursuant to the terms of the Retention Order, Kirklands retention was effective as of July 19, 2010. 2. On August 31, 2010, the Court entered its Order Authorizing the Establishment of

Procedures for Interim Compensation and Reimbursement of Expenses for Professionals and Official Committee Members (the Fee Procedures Order). Pursuant to the Fee Procedures Order, Notice Parties, as defined in the Fee Procedures Order, must file objections to monthly applications for compensation within twenty (20) days after service of the monthly application for compensation.3 The Fee Procedures Order provides further that nothing in this Order shall affect in any way any special servicers right to object to the use of its cash collateral to fund all or part of the fees and expenses of professionals compensated from the Debtors bankruptcy estates in monthly, interim, or final fee requests nor rule on the appropriateness of such cash collateral use or any entities rights with respect thereto. Fee Procedures Order at p. 7, 10. 3. On January 31, 2011, Kirkland filed its December Fee Application. The

December Fee Application indicated that during December 2010, Kirkland incurred fees of $1,116,671.50 and expenses of $39,511.91 for a total of $1,156,183.41. Kirkland requested the

2 3

Docket No. 884. Midland is a Notice Party under the Fee Procedures Order.

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payment of eighty percent (80%) of the fees and one hundred percent (100%) of the expenses. Pursuant to the Fee Procedures Order, objections to the December Fee Application must be filed by February 22, 2011. 4. The use of Midlands Cash Collateral is governed by the Final Order Authorizing

the Debtors to (i) Use the Adequate Protection Parties Cash Collateral and (ii) Provide Adequate Protection to the Adequate Protection Parties Pursuant to 11 U.S.C. 361, 362, and 363 dated September 2, 2010 (as amended) (the Final Cash Collateral Order).4 RESERVATION OF RIGHTS 1. The Fee Procedures Order included a provision for a 20% holdback of fees

charged by professionals paid from the Debtors estates. At this time, the holdback appears to be adequate to address issues that might arise in an objection to a future interim or final fee application to be submitted under 11 U.S.C. 330 or 331. 2. Midland objects to paying Kirkland more than 80% of the fees described in the

December Fee Application before they have been reviewed and approved after notice and a hearing on such interim or final fee applications. In doing so, Midland specifically reserves its right to assert objections to fees or expenses (or both) listed on the December Fee Application. Local Rule 9013-1(a) 3. This pleading includes citations to the applicable rules and statutory authorities

upon which the relief requested herein is predicated and a discussion of their application to this pleading. Accordingly, Midland submits that this pleading satisfies Local Bankruptcy Rule 9013-1(a).

Docket No. 402.

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Dated:

February 18, 2011 New York, New York

HAYNES AND BOONE, LLP

/s/ John D. Penn Lenard M. Parkins (NY Bar #4579124) Mark Elmore (admitted pro hac vice) 30 Rockefeller Plaza, 26th Floor New York, New York 10112 Telephone No.: (212) 659-7300 Facsimile No.: (212) 884-8211 - and John D. Penn (NY Bar # 4847208) Haynes and Boone, LLP 201 Main Street, Suite 2200 Fort Worth, Texas 76102 Telephone No.: (817) 347-6610 Facsimile No.: (817) 348-2300 ATTORNEYS FOR MIDLAND LOAN SERVICES, A DIVISION OF PNC BANK, N.A.

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