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

DATE: WEDNESDAY, December 21, 1994                   TAG: 9412220035
SECTION: BUSINESS                    PAGE: B7   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE:                                 LENGTH: Medium

KRISCH FORFEITS REMAINDER OF ITS PROPERTY TO LENDERS

Roanoke lawyer Ben Richardson was hired by Adolph and Joel Krisch in 1962 to do the legal work that would turn their small Motel Company of Roanoke Inc. into a big operation. Now he is helping the Krisch family leave the hotel business via Bankruptcy Court.

Tuesday, a second-generation Krisch company said it will settle its court battle with lenders and forfeit the seven hotel/motel properties it still owns. The 15 corporate employees, several of them long-timers, learned of the plans Monday.

"I wanted them to know in case they need to make plans," said Sam Krisch II, president of the companies. It could be several months before details of the settlement can be completed and the business can be shut down., but Krisch thought employees would need that lead time Not Richardson, though.

"I fully expect to go into semi-retirement," he said Tuesday.

After court hearings in late January, an Atlanta company called LW-SP2, L.P., will take possession of the Sheraton Inn Roanoke Airport; a Sheraton hotel in Charlotte, N.C.; and Holiday Inns in Salem, Lexington, Covington and Marion in Virginia and in Rocky Mount, N.C.

LW-SP2 is owned by Lehman Brothers, a New York investment broker; Westinghouse Corp.; and Lennar Corp., a publicly traded real estate company based in Miami.

Courtroom comments indicated LW-SP2 paid $16 million to buy the Krisch companies' $42 million debt.

Four Krisch companies, Krisch Realty Associates L.P., KR Associates, Krisch American Inns Inc., and Krisch Hotels Inc., filed for Chapter 11 reorganization bankruptcy in February. Since then, Krisch American Inns Inc. has converted its filing to a Chapter 7 liquidation bankruptcy. Krisch Hotels, which owns a catering and printing business and some real estate, also is not part of Monday's settlement.

The filing was a maneuver to protect the companies from foreclosure when a $13 million loan came due in July.

The companies were an outgrowth of the earlier hotel companies. By the mid-1980s, the Krisch brothers had built their hotel-motel empire, American Motor Inns, and sold it for $350 million.

Adolph Krisch, now deceased, retired shortly after that sale. Joel and his son, Sam, bought back 23 hotels formerly owned by AMI and set up a management company to run them and other properties. They also tried to develop a resort in St. Thomas, Virgin Islands; it already has been forfeited to LW-SP2.

Details of the latest settlement won't be available until the court hearings, but A. Carter Magee, Roanoke attorney for Sam Krisch, called the it "substantial" for the Krisch companies.

by CNB