FORT MITCHELL, Ky.--(BUSINESS WIRE)--Aug. 31, 2000--Edgecliff
Holdings, LLC announced today that it has begun mailing definitive
proxy materials to stockholders of Lodgian, Inc. (NYSE:LOD) to solicit
proxies for the election of up to three nominees to Lodgian's Board.
Edgecliff's nominees are expected, subject to their fiduciary duties,
to strongly advocate a sale of the company to the highest bidder. The
proxies will be used at Lodgian's 2000 Annual Meeting of Stockholders,
which is expected to be held on October 12, 2000.
As Lodgian's largest stockholder, we've grown increasingly
dissatisfied with the company's performance over the past year, said
William J. Yung, President of Edgecliff. Although we've made repeated
overtures since November of 1999 to acquire the company at prices
representing substantial premiums on the market value of Lodgian's
shares, Lodgian's Board has consistently rejected our efforts.
Instead, the Board has entrenched itself by reducing the number of
directors up for election at Lodgian's annual meeting and by delaying
the annual meeting until October 12, 2000. Lodgian has also begun to
sell its core assets -- at prices we believe are below replacement
cost and fair market value -- and has deprived its stockholders of the
maximum value obtainable by excluding us from the bidding process.
Lodgian recently reported serious deficiencies in its accounting
and financial controls. As a result of these deficiencies, Lodgian
filed its 1999 annual report four months late -- violating the terms
of its credit agreement. According to Lodgian's SEC filings and press
releases, Lodgian expects to remedy these problems by the end of
2000. Until then, Lodgian has resorted to paying outside consulting
accountants to assist its personnel in complying with the SEC's
recordkeeping and control requirements.
We believe that now is the appropriate time for Lodgian's
stockholders to hold the Board accountable for its actions and its
poor management of the company, Mr. Yung said.
In addition to its proposal to elect nominees to Lodgian's Board,
Edgecliff is asking Lodgian's stockholders to approve a by-law
proposal intended to dissuade Lodgian's Board from adopting new by-law
amendments that would impair the ability of a bidder to acquire the
company.
Edgecliff and its affiliated companies constitute the largest
full-service Marriott franchisee in the world and are owner-operators
of 40 hotels, with three more under construction. Edgecliff and its
affiliates have been in the business of building, owning and managing
hotels since 1972.
Information regarding the identity of the persons who, under SEC
rules, may be deemed to be participants in Edgecliff's solicitation of
Lodgian's stockholders, and their interests in the solicitation, are
set forth in Edgecliff's definitive proxy statement filed on the date
of this press release with the SEC. Copies of the definitive proxy
statement are being mailed to Lodgian's stockholders beginning today.
Stockholders are urged to read the Edgecliff proxy statement and any
other relevant documents that may be filed with the SEC because they
contain important information. Stockholders can obtain these documents
free of charge at the SEC's website (www.sec.gov) or by contacting
MacKenzie Partners, Inc., Edgecliff's solicitation agent, at
800-322-2885 or 212-929-5500. Stockholders should read the Edgecliff
proxy statement carefully before making any voting decision.
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