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Lodgian Receives Audit Report Identifying Matters that Raise Substantial
Doubt About the Company’s Ability to Continue as a Going Concern


 
ATLANTA, Ga., March 17, 2010 — Lodgian, Inc. (NYSE Amex Equities: 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, 2009 (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 2009 financial statements or to its Form 10-K which was filed with the Securities and Exchange Commission on March 16, 2010.

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 $55.7 million of the company’s mortgage debt is scheduled to mature in 2010.  This mortgage debt cannot be extended without the approval of the loan servicers.  The largest facility, the Merrill Lynch Fixed Rate Pool 1 indebtedness with a current principal balance of $33.9 million, matures on July 1, 2010.  To address this pending maturity, the company is pursuing opportunities to refinance the maturing mortgage debt.  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 28 hotels with 5,359 rooms located in 19 states.  Of the company’s 28-hotel portfolio as of today, 14 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, and Holiday Inn Express), 8 are Marriott brands (Marriott, Courtyard by Marriott, SpringHill Suites by Marriott, Residence Inn by Marriott and Fairfield Inn by Marriott), two are Hilton brands, and four are affiliated with other nationally recognized franchisors including Starwood, Wyndham, and Carlson.  For more information about Lodgian, visit the company's website: www.lodgian.com.  

Cautionary Note Regarding Forward-looking Statements 
                
This press release contains 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 expectations regarding refinancing its mortgage indebtedness, anticipated cost reductions, optional maturity extensions, property dispositions, future financial position, business strategy, projected performance and financing needs, 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 or extend maturing mortgage indebtedness, 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 ability to realize anticipated cost reductions, 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, 2009.  Lodgian assumes no duty to update these statements.

Management believes these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations.  All written and oral forward-looking statements attributable to Lodgian or persons acting on its behalf are qualified in their entirety by these cautionary statements.  Further, forward-looking statements speak only as of the date they are made, and Lodgian undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law. 

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Contact: 

Debi Ethridge
Vice President, Finance & Investor Relations
dethridge@lodgian.com
(404) 365-2719    
 

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Also See: Lodgian Enters Into Definitive Agreeent to be Acquired by Lone Star for $270 million / January 2010
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