
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, December 20, 1994                   TAG: 9412200093
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY STAFF WRITER NOTE: Below
DATELINE:                                 LENGTH: Medium

KRISCH 'EXITS GRACEFULLY' FROM HOTEL FORECLOSURES

Sam Krisch II, who put his four companies into bankruptcy in February to avoid foreclosure on seven hotels, has reached a settlement with lenders and expects to transfer the hotels to them early next year.

"We're going to exit the business," Krisch said Monday night. He settled, he said, because he was "concerned" about whether he could win. His family has operated hotels since the 1950s.

It was an opportunity to "exit gracefully," Krisch said. He already has spent more than $200,000 on the litigation, which might have taken years more to complete.

As part of the agreement, the Sheraton Airport Inn in Roanoke, a Sheraton Hotel in Charlotte and Holiday Inns in Salem, Lexington, Covington and Marion, and Rocky Mount, N.C., will be turned over to LW-SP2 L.P., a Lehman Brothers of New York consortium of lenders.

Terms of the settlement include "a substantial consideration" for the Krisch owners, attorney A. Carter Magee said. He said payments will be made to creditors and some money also will go to the limited partners in the ventures.

Final details aren't complete, Magee said.

Most affected are the 15 employees at the Krisch corporate headquarters on Franklin Road. They were told of the plans Monday.

The company that owns the hotels is Krisch Realty Associates L.P. A second company, KR Associates, owns 70 percent of Krisch Realty. The amount of debt involved is $42 million, and all but $1 million is secured by the hotels and is owed to LW-SP2. A third company, Krisch American Inns Inc., that originally filed for reorganization, is now being liquidated.

The fourth company, Krisch Hotels Inc., is still in Chapter 11, but it is not part of the settlement, Krisch said.

It has assets of about $1.6 million. Krisch Hotels owns Valley Catering and Krisch printing in Roanoke and several pieces of real estate, including land on Interstate 581 next to the Sheraton in Roanoke.

The current companies were an outgrowth of a hotel business begun in the 1950s by brothers Joel and Adolph Krisch. The brothers' companies grew into an organization of 51 hotels and brought $350 million in a sale in the mid-1980s.

by CNB