Lodgian Shares Fall On 'going Concern' Questions

NEW YORK (AP) — Shares of Lodgian Inc. dropped sharply on Friday after the company's auditors raised "substantial doubt" about whether the hotel owner and operator can continue operating as a going concern.

Lodgian shares dropped 23 cents, or 10.7 percent, to $1.92 in afternoon trading. The stock has traded between $1.19 and $11.93 during the past 52 weeks.

Lodgian owns and manages a portfolio of 40 hotels, including 20 under InterContinental Hotels Group brands like Crowne Plaza and Holiday Inn.

The "going concern" statement by independent public accounting firm Deloitte & Touche LLP was included in Lodgian's 2008 annual report, which was filed with the Securities and Exchange Commission on Friday.

The auditor noted that the Atlanta-based company has been unable to refinance roughly $128 million of mortgage debt that is scheduled to mature in July.

In a statement on Monday, Lodgian noted that it has asked for an extension, but its loan servicers have not yet granted the request. The company said it is also pursuing opportunities to refinance the debt or acquire new mortgage debt on other properties.

Lodgian said that "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."