Sunday, March 15, 2009

Lodgian Receives Audit Report with Going Concern Explanation

Lodgian, Inc. (NYSE Alternext US: LGN) today announced that the audit report of its independent registered public accounting firm, Deloitte & Touche LLP, included in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the “Form 10-K”), while expressing an unqualified opinion regarding the company’s audited financial statements, identified matters which raise substantial doubt about the company’s ability to continue as a going concern. The company’s announcement does not represent any changes or amendment to its 2008 financial statements or to its Form 10-K which was filed with the Securities and Exchange Commission on March 13, 2009.

As disclosed in the Form 10-K, the audit report raised substantial doubt about the company’s ability to continue as a going concern because approximately $128 million of the company’s mortgage debt is scheduled to mature in July 2009. This mortgage debt cannot be extended without the approval of the loan servicers, which extension has been requested but not yet granted. To address the pending maturities, the company is also pursuing opportunities to refinance the maturing mortgage debt or to acquire new mortgage debt using currently unencumbered properties. However, in light of the current state of credit markets generally and the real estate credit markets specifically, the company cannot currently predict the outcome of these efforts.

About Lodgian
Lodgian is one of the largest independent owners and operators of full-service hotels in the United States. The company currently owns and manages a portfolio of 40 hotels with 7,448 rooms located in 22 states and Canada. Of the company’s 40-hotel portfolio, 20 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express), 12 are Marriott brands (Marriott, Courtyard by Marriott, SpringHill Suites by Marriott, Residence Inn by Marriott and Fairfield Inn by Marriott), three are Hilton brands, and four are affiliated with other nationally recognized franchisors including Starwood, Wyndham, and Carlson. One hotel is an independent, unbranded property, which is currently closed and held for sale. For more information about Lodgian, visit the company’s website:

Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, including, among others, statements regarding Lodgian’s future financial position, business strategy, projected performance, financing needs and ability to extend, refinance or repay its debt, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Lodgian and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond Lodgian’s ability to control or predict. Such factors include, but are not limited to, the effects of regional, national and international economic conditions, our ability to refinance mortgage debt that matures on July 1, 2009, competitive conditions in the lodging industry and increases in room supply, requirements of franchise agreements (including the right of franchisors to immediately terminate their respective agreements if we breach certain provisions), our ability to complete planned hotel dispositions, the effects of unpredictable weather events such as hurricanes, the financial condition of the airline industry and its impact on air travel, the effect of self-insured claims in excess of our reserves and our ability to obtain adequate insurance at reasonable rates, and other factors discussed under Item IA (Risk Factors) in Lodgian’s Form 10-K for the year ended December 31, 2008. We assume no duty to update these statements.
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