Sec Form 13D Filing - Brookfield Corp filing for Hospitality Investors Trust Inc.Hospitality Investors Trust Inc. - 2021-05-19

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D/A

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 240.13d-2(a)

(Amendment No. 10)*

Justin Beber

Brookfield Asset Management Inc.

Brookfield Place, Suite 300

181 Bay Street, P.O. Box 762

Toronto, Ontario M5J2T3

Telephone: (416) 359-8598

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

Copy to:

Steven L. Wilner, Esq.

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

(212) 225-2000

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

Note.     Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

(Continued on following pages)

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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1	NAMES OF REPORTING PERSONS
	Brookfield Asset Management Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				 610;
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Canada
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			-0-
		8	SHARED VOTING POWER
			30,896,054.61*
		9	SOLE DISPOSITIVE POWER
			-0-
		10	SHARED DISPOSITIVE POWER
			30,896,054.61*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	30,896,054.61*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	44.17%**
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	CO

*See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock (as defined herein) outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares (as defined below) granted to BSREP II Board (as defined below), 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer (as defined below) as described below in Item 5), as reported in the Issuer’s quarterly report for the quarter ending March 31, 2021 on the Form 10-Q (the “10-Q”) filed with the Securities and Exchange Commission on May 14, 2021, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units (as defined herein) deliverable upon conversion of the Class C Units (as defined herein).

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

* See Item 5.

** The calculation is based on 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer as described below in Item 5), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

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This Amendment No. 10 (the “Amendment”) amends and supplements the Schedule 13D filed by the Reporting Persons on April 10, 2017 (the “Original 13D”), as amended and supplemented by Amendment No. 1 on February 28, 2018 (“Amendment No. 1”), Amendment No. 2 on January 3, 2019 (“Amendment No. 2”), Amendment No. 3 on February 27, 2019 (“Amendment No. 3”), Amendment No. 4 on January 3, 2020 (“Amendment No. 4”), Amendment No. 5 on August 18, 2020 (“Amendment No. 5”), Amendment No. 6 on December 28, 2020 (“Amendment No. 6”), Amendment No. 7 on March 31, 2021 (“Amendment No. 7”), Amendment No. 8 on May 3, 2021 (“Amendment No. 8”) and Amendment No. 9 on May 14, 2021 (“Amendment No. 9”, collectively with the Original 13D, Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7 and Amendment No. 8, the “Amended Schedule 13D”), with respect to the Common Stock.  Except as specifically provided herein, this Amendment does not modify any of the information previously reported on the Amended Schedule 13D. Capitalized terms used in this Amendment and not otherwise defined shall have the same meanings ascribed to them in the Amended Schedule 13D or the RSA (as defined below).

The Reporting Persons are filing this Amendment to reflect the restructuring support agreement (the “RSA”) that was entered into on May 19, 2021 by and between the Issuer, its operating partnership, Hospitality Investors Trust Operating Partnership, L.P. (the “OP”, and together with the Issuer, (the “Debtors”)), and Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC (the “Brookfield Investor”), one of the Reporting Persons.

Item 4 of the Amended Schedule 13D is amended by adding the following new sections above the subheading “Additional Plans or Proposals”:

Entry Into Restructuring Support Agreement; Commencement of Bankruptcy Cases

 

On May 19, 2021, the Issuer and the OP entered into the RSA with the Brookfield Investor. Pursuant to the RSA, as described in more detail below, the parties to the RSA have agreed to the principal terms of a proposed series of deleveraging or restructuring transactions of the Debtors (the “Restructuring Transactions”). The RSA contemplates that the Restructuring Transactions will be effectuated through a joint prepackaged Chapter 11 plan of reorganization (the “Plan”), in the form and substance attached as an exhibit to the RSA, to be implemented through cases to be commenced by the Debtors under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). In accordance with the RSA, on May 19, 2021 (the “Petition Date”), the Debtors filed voluntary petitions (collectively, the “Chapter 11 Cases”) under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

Prior to filing the Chapter 11 Cases and as contemplated by the RSA, the Brookfield Investor voted to accept the Plan.

The overview above and the summaries below of the terms of the RSA and the Restructuring Transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the RSA (including the Plan and all exhibits to the RSA and the Plan), a copy of which is filed as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K and incorporated here by reference. To the extent there is any inconsistency between these summaries and the full text of the RSA (including the Plan and all exhibits to the RSA and the Plan), the full text of the RSA (including the Plan and all other exhibits thereto) will govern. Additional information about the Chapter 11 Cases is available at the Debtors’ restructuring website at http://dm.epiq11.com/HospitalityInvestorsTrust.

 

Milestones and Termination

 

The Debtors, on the one hand, and the Brookfield Investor, on the other hand, have rights to terminate the RSA (and their support for the Restructuring Transactions) under certain circumstances, including:

DIP Facility and Exit Facility

The RSA contemplates that the Debtors will, during the pendency of the Chapter 11 Cases, enter into a secured debtor-in-possession financing facility on the terms and conditions set forth in the form of the super-priority senior secured debtor-in-possession term loan agreement attached as an exhibit to the RSA (the “DIP Facility”) pursuant to which the Brookfield Investor has committed to provide the liquidity the Debtors require to fund their current obligations (including up to $10.0 million to fund interest payments and other approved expenses for the property-level mortgage loans under which certain of the Issuer’s non-debtor subsidiaries serve as borrowers) during the pendency of the Chapter 11 Cases. There can be no assurance, however, that the Debtors will be able to enter into the DIP Facility, including because, among other reasons, entry into the DIP Facility is subject to approval by the Bankruptcy Court.

The RSA contemplates that the Debtors will, on the Effective Date, enter into a secured revolving exit facility on the terms and conditions set forth in the Plan (the “Exit Facility”) pursuant to which the Brookfield Investor has committed to provide liquidity the Debtors may require to fund working capital needs following the Effective Date. There can be no assurance, however, that the Debtors will be able to enter into the Exit Facility, including because, among other reasons, entry into the Exit Facility is subject to confirmation of the Plan by the Bankruptcy Court.

The DIP Facility will contain affirmative and negative covenants typical for a debtor-in-possession financing facility. The definitive documentation of the Exit Facility is anticipated to be in form and substance consistent with the definitive documentation of the DIP Facility.

Effect of the Plan

 

The Plan provides, among other things, that as of the Effective Date:

 

The CVR Agreement

Pursuant to the Plan and the CVR Agreement, holders of shares of Old Common Stock at the Effective Date will receive one CVR in exchange for each share of Old Common Stock. Each CVR will evidence the holder’s right to receive payments, if any, in an amount based on the future value of 98 of the 100 hotels and related assets owned by the Company on the Effective Date. The CVRs will be administered pursuant to the CVR Agreement, which will be entered into on the Effective Date among the Issuer, Computershare, Inc. and its subsidiary, Computershare Trust Company, N.A., as CVR agent. There can be no assurance, however, that the Debtors will be able to enter into the CVR Agreement and that holders of Old Common Stock will receive CVRs, including because, among other reasons, entry into the CVR Agreement is subject to confirmation of the Plan by the Bankruptcy Court.

 

The information set forth in Item 4 is incorporated herein by reference.

(a) and (b)

The following sentences assume that there is a total of 69,941,059.61 shares of Common Stock outstanding, which includes (i) the 39,082,625 shares of Common Stock outstanding as of May 1, 2021 (which includes the 37,620 Restricted Shares granted to BSREP II Board, 11,976 shares of which are subject to forfeiture in respect of Lowell Baron’s and Bruce Wiles’s service as directors of the Issuer), as reported in the 10-Q, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

The Brookfield Investor directly holds 30,858,434.61 Class C Units, which are convertible into OP Units at any time at the option of the Brookfield Investor at the Conversion Price. OP Units are, in turn, generally redeemable for shares of the Common Stock on a one-for-one-basis or the cash value of a corresponding number of shares of Common Stock, at the election of the Issuer, in accordance with the terms of the A&R LPA.  The Brookfield Investor also holds 37,620 Restricted Shares through its wholly-owned subsidiary BSREP II Board. Accordingly, the Brookfield Investor may be deemed to beneficially own 30,896,054.61 shares of Common Stock as of the date hereof, which constitutes 44.17% of the outstanding Common Stock.

As sole manager of the Brookfield Investor, BSREP II GP may be deemed to beneficially own all 30,858,434.61 Class C Units and 37,620 Restricted Shares as described above owned by the Brookfield Investor. As direct and indirect controlling persons of BSREP II GP, each of BAM, BAM Partners, BHC, BUSHI, BUSI, BUSC Finance, BPMH, BPG and Ultimate GP may be deemed to share with BSREP II GP beneficial ownership of such shares of Common Stock underlying such Class C Units and such Restricted Shares.

(c)             Except as set forth in this Amendment, none of the Reporting Persons nor, to the best knowledge of the Reporting Persons, without independent verification, any person named in Item 2 hereof, has effected any transaction in the Common Stock during the past 60 days.

(d)             To the best knowledge of the Reporting Persons, no person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities beneficially owned by the Reporting Persons identified in this Item 5.

(e)             Not Applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Item 6 of the Original Schedule 13D is hereby amended to add the following:

The information set forth in Items 4 and 5 is incorporated herein by reference.

Item 7.

Materials to be Filed as Exhibits

After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Dated: May 19, 2021

Brookfield Asset Management Inc.

BAM Class B Partners Inc., as trustee of BAM Partners Trust

Brookfield Holdings Canada Inc.

Brookfield US Holdings Inc.

Brookfield US Inc.

BUSC Finance LLC

Brookfield Property Master Holdings LLC

Brookfield Property Group LLC

Brookfield Strategic Real Estate Partners II GP OF GP LLC

Brookfield Strategic Real Estate Partners II GP L.P.

Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC

INDEX TO EXHIBITS

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