Allstar Inns announces tentative settlement of dispute with Motel 6.SANTA BARBARA Santa Barbara (săn'tə bär`brə, –bərə), city (1990 pop. 85,571), seat of Santa Barbara co., S Calif., on the Pacific Ocean; inc. 1850. , Calif.--(BUSINESS WIRE)--March 6, 1995--Allstar Inns Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). :ALST ALST Aboriginal Legal Services of Toronto (Canada) ALST Assistant Life Support Technician ALST All Stations ) Monday announced that it has entered into a letter of intent with Motel 6 Operating L.P. which would, if implemented, settle the pending litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. between Allstar and Motel 6 in California and Texas. Under the letter of intent, which is non-binding, Motel 6 and Allstar would terminate the existing Management Contract under which Motel 6 operates the 72 motels Motels may refer to any of the following:
In addition, Motel 6 would have an option to purchase the motels from Allstar prior to the end of 1998 at a fixed price of $40 million (subject to a $3 million offset) plus the debt secured by the motels. Annual rent under the contemplated lease would cover debt service on the motels, plus $3.5 million from Allstar. In the event Motel 6 did not exercise the option to purchase the properties, rent under the lease would increase, starting in 1999, to include debt service plus $5 million (adjusted for cost-of-living increases) plus satisfaction of Allstar's indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. to Motel 6 in the approximate amount of $32.5 million. The letter of intent contemplates that the termination of the Management Contract and the execution of the lease would be implemented by July 1995. However, it is subject to numerous conditions, including the negotiation of definitive agreements between Motel 6 and Allstar, and the approval of Allstar's stockholders. CONTACT: Allstar Inns Inc., Santa Barbara Daniel R. Shaughnessy, 805/730-3383 |
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