SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
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Date of Report (Date of earliest event reported): September 15, 2000
LODGIAN, INC.
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(Exact name of registrant as specified in its charter)
Delaware 001-14537 52-2093696
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification
of incorporation) Number)
3445 Peachtree Road, N.E., Suite 700, Atlanta, Georgia 30326
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 364-9400
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ITEM 4. CHANGES IN THE REGISTRANT'S CERTIFYING ACCOUNTANTS
At a meeting held on August 30, 2000, the Board of Directors of Lodgian, Inc.
(the "Company"), at the recommendation of its audit committee, made the decision
to seek the retention of new independent auditors for the year ending December
31, 2000 to replace the firm of Ernst & Young LLP. On September 20, 2000 the
Board of Directors appointed Arthur Andersen LLP as the Company's independent
auditors.
Ernst & Young LLP resigned as the Company's independent auditors on September
15, 2000.
The reports of Ernst & Young LLP on the Company's financial statements for the
past two years did not contain an adverse opinion or a disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope, or accounting
principles, except the report of Ernst & Young LLP on the Company's financial
statements for the year ended December 31, 1999 which stated that Ernst & Young
LLP was unable to review the quarterly data included in footnote 17 to the
financial statements for the year ended December 31, 1999 in accordance with
standards established by the American Institute of Certified Public Accountants
because the Company's internal controls for the preparation of interim financial
information did not provide an adequate basis to enable them to complete such a
review.
In connection with the audits of the Company's financial statements for each of
the two years ended December 31, 1999, and in the subsequent interim period,
there were no disagreements with Ernst & Young LLP on any matters of accounting
principles or practices, financial statement disclosure, or auditing scope and
procedures which, if not resolved to the satisfaction of Ernst & Young LLP would
have caused Ernst & Young LLP to make reference to the matter in their report.
In connection with the audit of the Company's financial statements as of
December 31, 1999, Ernst & Young LLP informed the Company of the existence of
the following "reportable events" as that term is described in Item 304(a)(1)(v)
of Regulation S-K as follows:
In their report to the Audit Committee for the year ended December 31,
1999, Ernst & Young LLP advised the Company of the existence of material
weaknesses, as defined by standards established by the American Institute
of Certified Public Accountants related to (1) Overall Lack of Controls
within the Financial Accounting Processes, (2) Lack of Account
Reconciliations within the Company's Cash, Property and Equipment, and
Accounts Payable and Accrual accounts, (3) Lack of General Application
Controls over the Company's Information Systems, and (4) Lack of Approval
of Journal Entries.
The Company's audit committee discussed these matters with Ernst & Young LLP.
The Company has authorized Ernst & Young LLP to respond fully to the inquiries
of Arthur Andersen concerning these matters.
As disclosed in the Company's Form 10-K for the fiscal year ended December 31,
1999, the Company has developed and is in the process of implementing a plan to
substantially improve its system of internal controls.
The Company has requested Ernst & Young LLP to furnish it a letter addressed to
the Commission stating whether it agrees with the above statements. A copy of
that letter, dated September 21, 2000 is filed as Exhibit 16.1 to this Form 8-K.
ITEM 7. EXHIBITS
EXHIBIT NUMBER DESCRIPTION
Exhibit 16.1 Letter from Ernst & Young to the Securities & Exchange
Commission, dated September 21, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LODGIAN, INC.
By: /s/ Thomas Eppich
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Name: Thomas Eppich
Title: Chief Financial Officer
Date: September 21, 2000
