Filing Details

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*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 March 15, 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 annual report for the fiscal year ending December 31, 2020 on the Form 10-K (the “10-K”) filed with the Securities and Exchange Commission on March 30, 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 March 15, 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-K, 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 March 15, 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-K, 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 March 15, 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-K, 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 March 15, 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-K, 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 March 15, 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-K, 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 March 15, 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-K, 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 March 15, 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-K, 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 March 15, 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-K, 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 March 15, 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-K, 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 March 15, 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-K, and (ii) 30,858,434.61 shares of Common Stock issuable upon redemption of OP Units deliverable upon conversion of the Class C Units.

 

This Amendment No. 7 (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. 5 on August 18, 2020 (“Amendment No. 5”) and Amendment No. 6 on December 28, 2020 (“Amendment No. 6”, collectively with the Original 13D, Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4 and Amendment No. 5, 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.

The Reporting Persons are filing this Amendment to reflect an amendment (the “March 30 LPA Amendment”), dated March 30, 2021, to the Amended and Restated Agreement of Limited Partnership of Hospitality Investors Trust Operating Partnership, L.P., dated as of March 31, 2017 (as amended, the “A&R LPA”), which amendment was entered into by and between the Issuer, in its capacity as the general partner of its operating partnership, Hospitality Investors Trust Operating Partnership, L.P., and Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC (the “Brookfield Investor”), one of the Reporting Persons, which modified certain terms of the A&R LPA.

Item 4 of the Amended Schedule 13D is amended by adding the following paragraph beneath the nineteenth paragraph under the subheading “Distributions” under the subheading “Terms of the Class C Units”:

On December 31, 2020, the Brookfield Investor received 926,294.22 Class C Units as a payment-in-kind dividend on 28,997,036.31 Class C Units (adjusted by .01 unit due to rounding) owned by the Brookfield Investor at the time of the dividend payment date in accordance with the terms of the A&R LPA. As a result of the foregoing transactions, the Brookfield Investor owned 29,923,330.53 C Units (adjusted by .01 unit due to rounding) on December 31, 2020.

On March 31, 2021, the Brookfield Investor received 935,104.08 Class C Units as a payment-in-kind dividend on 29,923.330.53 Class C Units (adjusted by .01 unit due to rounding) owned by the Brookfield Investor at the time of the dividend payment date in accordance with the terms of the A&R LPA (including the modifications made in the March 30 LPA Amendment, as further described below). As a result of the foregoing transactions, the Brookfield Investor owned 30,858,434.61 C Units (adjusted by .01 unit due to rounding) on March 31, 2021.

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

LPA Amendment

On March 30, 2021, the Issuer, in its capacity as the general partner of its operating partnership and the OP entered into the March LPA Amendment to the A&R LPA with the Brookfield Investor, the holder of all issued and outstanding Class C Units of the OP.

Pursuant to the A&R LPA, holders of Class C Units are generally entitled to receive PIK Distributions. As previously disclosed, the cash distribution that would otherwise have been payable on December 31, 2020 was converted into a PIK Distribution such that, on that date, no cash distribution was paid and the quarterly PIK Distribution due on that date was paid at a rate of 12.5% per annum.  Pursuant to the March 30 LPA Amendment, the cash distribution that would otherwise have been payable on March 31, 2021 was be converted into a PIK Distribution such that, on that date, no cash distribution was be paid and the quarterly PIK Distribution due on that date was paid be at a rate of 12.5% per annum.

Potential Restructuring

As previously disclosed, the Reporting Persons have been engaged in ongoing discussions with the Issuer regarding the Issuer’s strategic and liquidity alternatives. As part of these ongoing discussions, during December 2020, the Brookfield Investor, the Issuer and the OP entered into an amendment, dated December 24, 2020 (the “December 24 LPA Amendment”), to the Amended and Restated Agreement of Limited Partnership of Hospitality Investors Trust Operating Partnership, L.P., dated as of March 31, 2017, pursuant to which the cash distribution payable to the Reporting Persons on December 31, 2020 was converted into a PIK Distribution. As disclosed in this Amendment, on March 30, 2021, the Brookfield Investor, the Issuer and the OP entered into the March 30 LPA Amendment, pursuant to which the cash distribution payable to the Reporting Persons on March 31, 2021 was converted into a PIK Distribution. As the discussions among the parties have continued during the first quarter of 2021, the parties are in ongoing discussions concerning the possibility of entering into a definitive and comprehensive agreement on the terms of a series of deleveraging or restructuring transactions (the “Restructuring Transactions”) that may include, among other things, (a) the Issuer and the OP filing pre-packaged Chapter 11 cases under the U.S. Bankruptcy Code in the State of Delaware to implement the Restructuring Transactions pursuant to a plan of reorganization and (b) the Brookfield Investor or another lender providing a debtor-in-possession financing facility or a similar facility to the Issuer.

The Reporting Persons intend to continue to have discussions with the Issuer regarding these matters in order to consider, explore and develop plans, make proposals and negotiate agreements with respect to or relating to, among other things, the foregoing matters, including a potential recapitalization of the Company and the OP and/or the Brookfield Investor’s investment therein.  There can be no assurance that any of the matters described herein will be completed, and nothing herein is or shall be deemed to be an offer to buy, or the solicitation of any offer to sell, any equity, convertible debt or debt securities of the Issuer.

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 March 15, 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-K, 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, Partners Limited, 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 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.

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: March 31, 2021

Brookfield Asset Management Inc.

Partners Limited

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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