8-K

United States
Securities And Exchange Commission

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 19, 2009

Lodgian, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-14537	52-2093696
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
of incorporation)		Identification No.)

3445 Peachtree Road, N.E., Suite 700
Atlanta, GA 30326
(Address of principal executive offices)

(404) 364-9400
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01. Completion of Acquisition or Disposition of Assets.

As has been previously disclosed, Lodgian, Inc. (the “Company”) is in default on $16.3 million of its mortgage indebtedness (the “Indebtedness”) secured by the Crowne Plaza in Worcester, Massachusetts (the “Worcester Property”). In addition, the Company has previously disclosed that on a trailing twelve month basis, cash flow from the Worcester Property was not sufficient to service the debt on the property, and as a result, the Company did not make required payments on the Indebtedness and intends to convey the Worcester Property to the Lender (as defined below) in full satisfaction of the Indebtedness.

On November 19, 2009, the Worcester Property was transferred to a receiver appointed pursuant to a court order approved by the United States District Court for the District of Massachusetts. Under the court order, the receiver, David Buddemeyer of Driftwood Hospitality Management, LLC, took exclusive possession of the Worcester Property and is holding, operating, managing and maintaining the Worcester Property on behalf of Wells Fargo Bank, N.A., as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-through Certificates, Series 2006-C25 (the “Lender”). The receivership was approved pursuant to a petition filed by the Lender for the appointment of a receiver after the Company did not cure its previously disclosed default.

The Indebtedness is non-recourse, except in certain limited circumstances, which the Company believes are remote, and is not cross-collateralized with any other mortgage debt. The Company classified the Indebtedness as current in its Condensed Consolidated Balance Sheet as of September 30, 2009.

Item 9.01. Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The pro forma financial information required to be filed pursuant to Item 9.01(b) of Form 8-K is attached hereto as Exhibit 99.1.

(d) Exhibits

Exhibit 99.1 Selected Financial Information.

Cautionary Note Regarding Forward-looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, including, among others, statements regarding the Company’s expectations regarding returning certain hotels to lenders, anticipated cost reductions, optional maturity extensions, property dispositions, future financial position, business strategy, projected performance and financing needs, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict. Such factors include, but are not limited to, the effects of regional, national and international economic conditions, our ability to refinance or extend maturing mortgage indebtedness, competitive conditions in the lodging industry and increases in room supply, requirements of franchise agreements (including the right of franchisors to immediately terminate their respective agreements if we breach certain provisions), our ability to complete planned hotel dispositions, the ability to realize anticipated cost reductions, the effects of unpredictable weather events such as hurricanes, the financial condition of the airline industry and its impact on air travel, the effect of self-insured claims in excess of our reserves and our ability to obtain adequate insurance at reasonable rates, and other factors discussed under Item IA (Risk Factors) in the Company’s Form 10-K for the year ended December 31, 2008, and as updated in its Forms 10-Q for the quarters ended March 31, June 30, 2009 and September 30, 2009. The Company assumes no duty to update these statements.

Management believes these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Lodgian, Inc.
Dated: November 24, 2009	By:	/s/ James A. MacLennan
		JAMES A. MACLENNAN
		Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Selected Financial Information.

EX-99.1

Exhibit No. 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial information has been prepared assuming that the Crowne Plaza, Worcester, MA (the “Worcester Property”) had been conveyed to the lender (i) at the beginning of the periods presented for the pro forma condensed consolidated statements of operations for the years ended December 31, 2008, 2007 and 2006 as well as for the nine months ended September 30, 2009 and 2008, and (ii) at September 30, 2009 for the pro forma condensed consolidated balance sheet.

The unaudited pro forma condensed consolidated statements of operations do not include adjustments for the gain on deconsolidation of the Worcester Property, estimated at $6.1 million, as this is a non-recurring transaction directly attributable to the disposition of the Worcester Property.

In accordance with the terms of the franchise agreement associated with the Worcester Property, the Company could be required to pay liquidated damages to the franchisor upon transfer of the Worcester Property to the Lender. The estimated potential liquidated damages totaled $1.3 million as of September 30, 2009. This amount is not reflected in the pro forma condensed consolidated financial statements presented since the recognition criteria for contingencies as established by U.S. GAAP had not been met.

The unaudited pro forma condensed consolidated financial statements have been prepared by management for illustrative purposes only in accordance with Article 11 of SEC Regulation S-X and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized had the Worcester Property been conveyed to the lender during the specified periods. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with Lodgian, Inc.’s historical consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2008 and its Form 10-Q for the nine months ended September 30, 2009.

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2008

	Lodgian, Inc.			Pro Forma adjustments
	For the Year Ended			related to the Crowne
	December 31, 2008			Plaza Worcester, MA			Pro Forma
	(unaudited in thousands, except per share data)
Revenues:
Rooms	$	178,623		$	(5,192	)	$	173,431
Food and beverage		53,543			(3,801	)		49,742
Other		8,262			(517	)		7,745
Total revenues		240,428			(9,510	)		230,918
Direct operating expenses:
Rooms		46,588			(1,456	)		45,132
Food and beverage		36,755			(2,435	)		34,320
Other		5,806			(281	)		5,525
Total direct operating expenses		89,149			(4,172	)		84,977
		151,279			(5,338	)		145,941
Other operating expenses:
Other hotel operating costs		69,960			(2,762	)		67,198
Property and other taxes, insurance, and leases		16,561			(656	)		15,905
Corporate and other		16,805			(888	)		15,917
Casualty losses, net		1,095			—			1,095
Depreciation and amortization		31,930			(237	)		31,693
Impairment of long-lived assets		9,468			(4,875	)		4,593
Total other operating expenses		145,819			(9,418	)		136,401
Operating income		5,460			4,080			9,540
Other income (expenses):
Interest income and other		1,054			—			1,054
Interest expense		(19,345	)		1,063			(18,282	)
Loss before income taxes		(12,831	)		5,143			(7,688	)
Provision for income taxes — continuing operations		(80	)		—			(80	)
Loss from continuing operations		(12,911	)		5,143			(7,768	)
Basic and diluted net loss per share from continuing operations	$	(0.59	)	$	0.24		$	(0.36	)
Basic and diluted weighted average shares from continuing operations		21,774			—			21,774

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2007

	Lodgian, Inc.			Pro Forma adjustments
	For the Year Ended			related to the Crowne
	December 31, 2007			Plaza Worcester, MA			Pro Forma
	(unaudited in thousands, except per share data)
Revenues:
Rooms	$	179,716		$	(5,351	)	$	174,365
Food and beverage		55,089			(3,857	)		51,232
Other		7,753			(460	)		7,293
Total revenues		242,558			(9,668	)		232,890
Direct operating expenses:
Rooms		44,833			(1,474	)		43,359
Food and beverage		37,239			(2,477	)		34,762
Other		5,503			(238	)		5,265
Total direct operating expenses		87,575			(4,189	)		83,386
		154,983			(5,479	)		149,504
Other operating expenses:
Other hotel operating costs		68,623			(2,879	)		65,744
Property and other taxes, insurance, and leases		17,662			(710	)		16,952
Corporate and other		21,391			(392	)		20,999
Casualty gains, net		(1,867	)		—			(1,867	)
Restructuring		1,232			—			1,232
Depreciation and amortization		28,765			(647	)		28,118
Impairment of long-lived assets		1,622			(462	)		1,160
Total other operating expenses		137,428			(5,090	)		132,338
Operating income		17,555			(389	)		17,166
Other income (expenses):
Interest income and other		3,944			—			3,944
Interest expense		(23,172	)		1,078			(22,094	)
Loss on debt extinguishment		(3,330	)		—			(3,330	)
Loss before income taxes		(5,003	)		689			(4,314	)
Provision for income taxes — continuing operations		(157	)		—			(157	)
Loss from continuing operations		(5,160	)		689			(4,471	)
Basic and diluted net loss per share from continuing operations	$	(0.21	)	$	0.03		$	(0.18	)
Basic and diluted weighted average shares from continuing operations		24,292			—			24,292

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2006

	Lodgian, Inc.			Pro Forma adjustments
	For the Year Ended			related to the Crowne
	December 31, 2006			Plaza Worcester, MA			Pro Forma
	(unaudited in thousands, except per share data)
Revenues:
Rooms	$	170,764		$	(5,929	)	$	164,835
Food and beverage		49,807			(3,539	)		46,268
Other		7,064			(337	)		6,727
Total revenues		227,635			(9,805	)		217,830
Direct operating expenses:
Rooms		43,329			(1,517	)		41,812
Food and beverage		34,861			(2,260	)		32,601
Other		5,402			(180	)		5,222
Total direct operating expenses		83,592			(3,957	)		79,635
		144,043			(5,848	)		138,195
Other operating expenses:
Other hotel operating costs		63,467			(2,821	)		60,646
Property and other taxes, insurance, and leases		17,383			(633	)		16,750
Corporate and other		20,693			(391	)		20,302
Casualty gains, net		(2,985	)		—			(2,985	)
Depreciation and amortization		27,414			(715	)		26,699
Impairment of long-lived assets		632			—			632
Total other operating expenses		126,604			(4,560	)		122,044
Operating income		17,439			(1,288	)		16,151
Other income (expenses):
Business interruption proceeds		3,094			—			3,094
Interest income and other		2,558			—			2,558
Interest expense		(21,970	)		1,465			(20,505	)
Income before income taxes		1,121			177			1,298
Provision for income taxes — continuing operations		(11,854	)		—			(11,854	)
Loss from continuing operations		(10,733	)		177			(10,556	)
Basic and diluted net loss per share from continuing operations	$	(0.44	)	$	0.01		$	(0.43	)
Basic and diluted weighted average shares from continuing operations		24,617			—			24,617

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2009

	Lodgian, Inc.			Pro Forma adjustments
	For the Nine Months			related to the Crowne
	Ended September 30, 2009			Plaza Worcester, MA			Pro Forma
	(unaudited in thousands, except per share data)
Revenues:
Rooms	$	114,415		$	(3,073	)	$	111,342
Food and beverage		33,852			(2,088	)		31,764
Other		5,689			(335	)		5,354
Total revenues		153,956			(5,496	)		148,460
Direct operating expenses:
Rooms		31,818			(996	)		30,822
Food and beverage		23,706			(1,485	)		22,221
Other		3,881			(163	)		3,718
Total direct operating expenses		59,405			(2,644	)		56,761
		94,551			(2,852	)		91,699
Other operating expenses:
Other hotel operating costs		46,229			(1,768	)		44,461
Property and other taxes, insurance, and leases		12,829			(505	)		12,324
Corporate and other		11,458			(228	)		11,230
Casualty losses, net		133			(15	)		118
Depreciation and amortization		26,067			(594	)		25,473
Impairment of long-lived assets		35,349			(4,996	)		30,353
Total other operating expenses		132,065			(8,106	)		123,959
Operating loss		(37,514	)		5,254			(32,260	)
Other income (expenses):
Interest income and other		98			—			98
Interest expense		(10,598	)		768			(9,830	)
Loss before income taxes and noncontrolling interest		(48,014	)		6,022			(41,992	)
Provision for income taxes — continuing operations		(29	)		—			(29	)
Loss from continuing operations		(48,043	)		6,022			(42,021	)
Basic and diluted net loss per share from continuing operations	$	(2.25	)	$	0.28		$	(1.97	)
Basic and diluted weighted average shares from continuing operations		21,313			—			21,313

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2008

	Lodgian, Inc.			Pro Forma adjustments
	For the Nine Months			related to the Crowne
	Ended September 30, 2008			Plaza Worcester, MA			Pro Forma
	(unaudited in thousands, except per share data)
Revenues:
Rooms	$	139,891		$	(3,842	)	$	136,049
Food and beverage		40,011			(2,776	)		37,235
Other		6,376			(392	)		5,984
Total revenues		186,278			(7,010	)		179,268
Direct operating expenses:
Rooms		35,562			(1,088	)		34,474
Food and beverage		27,740			(1,792	)		25,948
Other		4,473			(215	)		4,258
Total direct operating expenses		67,775			(3,095	)		64,680
		118,503			(3,915	)		114,588
Other operating expenses:
Other hotel operating costs		53,885			(2,038	)		51,847
Property and other taxes, insurance, and leases		12,338			(496	)		11,842
Corporate and other		13,742			(788	)		12,954
Casualty gains, net		(57	)		—			(57	)
Depreciation and amortization		23,578			(94	)		23,484
Impairment of long-lived assets		9,114			(4,849	)		4,265
Total other operating expenses		112,600			(8,265	)		104,335
Operating income		5,903			4,350			10,253
Other income (expenses):
Interest income and other		907			—			907
Interest expense		(14,768	)		797			(13,971	)
Loss before income taxes and noncontrolling interest		(7,958	)		5,147			(2,811	)
Provision for income taxes — continuing operations		(6	)		—			(6	)
Loss from continuing operations		(7,964	)		5,147			(2,817	)
Basic and diluted net loss per share from continuing operations	$	(0.36	)	$	0.23		$	(0.13	)
Basic and diluted weighted average shares from continuing operations		21,944			—			21,944

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2009

				Pro Forma adjustments
	Lodgian, Inc. as of			related to the Crowne
	September 30, 2009			Plaza Worcester, MA			Pro Forma
	(Unaudited in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	24,647		$	(205	)	$	24,442
Cash, restricted		9,419			—			9,419
Accounts receivable (net of allowances of $257)		7,035			(225	)		6,810
Inventories		3,100			(129	)		2,971
Prepaid expenses and other current assets		15,342			(352	)		14,990
Assets held for sale		4,554			—			4,554
Total current assets		64,097			(911	)		63,186
Property and equipment, net		403,815			(9,627	)		394,188
Deposits for capital expenditures		5,586			(103	)		5,483
Other assets		4,893			(153	)		4,740
	$	478,391		$	(10,794	)	$	467,597
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,152		$	(177	)	$	4,975
Other accrued liabilities		23,674			(380	)		23,294
Advance deposits		1,619			(98	)		1,521
Current portion of long-term liabilities		102,614			(16,270	)		86,344
Liabilities related to assets held for sale		607			—			607
Total current liabilities		133,666			(16,925	)		116,741
Long-term liabilities		208,935			—			208,935
Total liabilities		342,601			(16,925	)		325,676
Commitments and contingencies
Stockholders’ equity:
Common stock, $.01 par value, 60,000,000 shares authorized; 25,148,819 issued at September 30, 2009		252			—			252
Additional paid-in capital		331,601			—			331,601
Accumulated deficit		(155,344	)		6,131			(149,213	)
Accumulated other comprehensive income		64			—			64
Treasury stock, at cost, 3,827,603 at September 30, 2009		(39,692	)		—			(39,692	)
Total stockholders’ equity attributable to common stock		136,881			6,131			143,012
Noncontrolling interest		(1,091	)		—			(1,091	)
Total equity		135,790			6,131			141,921
	$	478,391		$	(10,794	)	$	467,597