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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 29, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SERVICO, INC.
(Exact name of registrant as specified in its charter)
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FLORIDA 7011 65-0350241
State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
DAVID BUDDEMEYER
CHIEF EXECUTIVE OFFICER
SERVICO, INC.
1601 BELVEDERE ROAD 1601 BELVEDERE ROAD
WEST PALM BEACH, FLORIDA 33406 WEST PALM BEACH, FLORIDA 33406
TELEPHONE (561) 689-9970 TELEPHONE (561) 689-9970
(Address, including Zip Code, and telephone (Name, address, including Zip Code, and
number, including area code, of registrant's telephone number, including area code, of
principal executive offices) agent for service)
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Copies to:
ALISON W. MILLER, ESQ.
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
150 WEST FLAGLER STREET, SUITE 2200
MIAMI, FLORIDA 33130
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, check the following box. [X]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF EACH AMOUNT MAXIMUM MAXIMUM AMOUNT OF
CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE
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Common Stock, $.01 par
value....................... 2,300,000 shares $15.125 $2,300,000 $10,542
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(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c), based upon average high and low sales price of the
Registrant's common stock, as reported on the composite tape of the New York
Stock Exchange on October 28, 1997.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 29, 1997
PROSPECTUS
2,300,000 SHARES
SERVICO, INC.
COMMON STOCK
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This Prospectus relates to 2,300,000 shares of common stock, par value $.01
per share (the "Common Stock"), which may be offered and issued by Servico, Inc.
(the "Company") from time to time in connection with acquisitions of businesses
or properties.
The Company anticipates that such acquisitions will consist principally of
properties and businesses (or the assets thereof) complementary to and related
to the Company's current businesses, but on occasion, an acquired business or
property may be dissimilar to the businesses of the Company. The consideration
for acquisitions will consist of shares of Common Stock, cash, notes or other
evidences of indebtedness, guarantees, assumption of liabilities, tangible or
intangible property, or a combination thereof, as determined from time to time
by negotiations between the Company and the owners or controlling persons of the
businesses or properties to be acquired. In addition, the Company may lease
property from and enter into management or consulting agreements and
non-competition agreements with the former owners and key executive personnel of
the businesses to be acquired.
The Company contemplates that the terms of an acquisition will be
determined by negotiations between the Company's representatives and the owners
or controlling persons of the businesses or properties to be acquired. Factors
taken into account in acquisitions include, among other relevant factors, the
quality and reputation of the business or property, the assets, liabilities,
results of operations and cash flows of the business or property, the quality of
its management and employees, its earnings potential, the geographic locations
of the business or property and the market value of the Common Stock of the
Company when pertinent. The Company anticipates that shares of Common Stock
issued in any such acquisition will be valued at a price reasonably related to
the market value of the Common Stock, either at the time the terms of the
acquisition are tentatively agreed upon, or at or about the time of closing, or
during the period or periods prior to delivery of the shares.
The Company does not expect that underwriting discounts or commissions will
be paid, except that finders fees may be paid to persons from time to time in
connection with specific acquisitions. Any person receiving any such fees may be
deemed to be an underwriter within the meaning of the Securities Act of 1933.
The Common Stock is listed on the New York Stock Exchange under the symbol
SER. On October 28, 1997, the closing sale price of the Common Stock on the New
York Stock Exchange was $16.25 per share.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" COMMENCING ON PAGE 3.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is , 1997
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO PURCHASE THE SECURITIES OFFERED BY THIS
PROSPECTUS IN ANY JURISDICTION IN WHICH, OR TO OR FROM ANY PERSON TO OR FROM
WHOM, IT IS UNLAWFUL TO MAKE SUCH AN OFFER, OR SOLICITATION OF AN OFFER. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES OFFERED
PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS PROSPECTUS OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
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PAGE
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Available Information....................................... 1
Information Incorporated by Reference....................... 2
The Company................................................. 2
Risk Factors................................................ 3
Use of Proceeds............................................. 7
Selected Consolidated Financial Data........................ 8
Other Information........................................... 8
Restrictions on Resale...................................... 8
Experts..................................................... 9
Legal Matters............................................... 9
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material may also be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such information is also available
to the public from commercial documents on the internet web site maintained by
the Commission at http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock offered hereby. This Prospectus, which is
a part of the Registration Statement, does not contain all of the information
set forth in, or annexed as exhibits to, such Registration Statement. For
further information with respect to the Company or the shares of Common Stock
offered hereby, reference is made to such Registration Statement and the
exhibits thereto, certain portions of which are omitted from this Prospectus as
permitted by the rules and regulations of the Commission. Statements contained
in this Prospectus regarding the contents of any contract or other document
referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or such other document, each such
statement being qualified in all respects by such reference.
The Common Stock is listed on the New York Stock Exchange ("NYSE") and
reports, proxy and information statements and other information concerning the
Company can also be inspected at the offices of the NYSE, 20 Broad Street, New
York, New York, 10005.
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INFORMATION INCORPORATED BY REFERENCE
The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, including the portions of the Company's Proxy Statement
dated April 14, 1997, incorporated by reference in such report.
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997.
(3) The description of the Company's Common Stock contained in the
Company's Form 8-A, dated June 12, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus but prior to
termination of this Offering shall be deemed to be incorporated by reference
herein and made a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein (or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein) modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed to constitute a part
hereof, except as so modified or superseded.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. The Company hereby undertakes to provide, without
charge, to each person, including any beneficial owner, to whom this Prospectus
is delivered, upon written or oral request of such person, a copy of any or all
of the documents described above which have been or may be incorporated into
this Prospectus and deemed to be a part hereof, other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents. Requests for such copies should be directed to Mr. Warren M.
Knight, Vice President -- Finance, Servico, Inc., 1601 Belvedere Road, West Palm
Beach, Florida, 33406; telephone (561) 689-9970. In order to ensure timely
delivery of the documents, any request should be made five (5) business days
before final action is to be taken with respect to a proposed acquisition by the
Company involving the issuance of securities covered by this Prospectus.
THE COMPANY
The Company is one of the largest owners and operators of full-service
hotels in the United States. The Company currently operates 64 hotels containing
approximately 12,686 rooms located in 22 states and Canada. The Company's hotels
are primarily mid-sized, with an average of approximately 200 rooms per hotel,
and are primarily located in secondary metropolitan markets. The Company's
full-size hotels offer food and beverage services and meeting and banquet
facilities. The Company's hotels include 52 wholly owned hotels, 10 partially
owned hotels and two managed hotels. Eleven of the hotels are subject to
long-term ground or building leases. All of the Company's hotels are affiliated
with nationally recognized hospitality franchises, including Holiday Inn, Best
Western, Clarion, Comfort Inn, Crowne Plaza, Days Inn, Hampton Inn, Hilton,
Howard Johnson, Omni, Quality Inn, Radisson, Sheraton and Westin. The Company
operates 40 hotels under franchise agreements with Holiday Inn, making the
Company the second largest Holiday Inn franchisee in the United States. The
Company's principal executive offices are located at 1601 Belvedere Road, West
Palm Beach, Florida 33406, and its telephone number is (561) 689-9970. For
further information about the business and operations of the Company, reference
is made to the Company's reports incorporated herein by reference. See
"Information Incorporated by Reference."
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RISK FACTORS
An investment in the Common Stock involves material risks. In addition to
general investment risks and those factors set forth elsewhere in this
Prospectus or incorporated by reference herein, prospective investors should
consider, among other things, the following risks before making an investment.
Statements in this Prospectus which express "belief", "anticipation", or
"expectation", as well as other statements which are not historical fact, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and involve risks and uncertainties. Moreover,
there are important factors which include, but are not limited to, general and
local economic conditions, risks relating to the operation and acquisition of
hotels, government legislation and regulation, changes in interest rates, the
impact of rapid growth, the availability of capital to finance growth, the
historical cyclicality of the lodging industry and other factors described in
other filings of the Company with the Commission, all of which are difficult to
predict and many of which are beyond the control of the Company. Actual results
could differ materially from these forward-looking statements. In light of the
risks and uncertainties, there is no assurance that the forward-looking
statements contained in this Prospectus will in fact prove correct or occur. The
Company does not undertake any obligation to publicly release the results of any
revisions to these forward-looking statements to reflect future events or
circumstances.
RISKS ASSOCIATED WITH EXPANSION
Availability of Additional Capital to Support Growth. As part of the
Company's business strategy, the Company intends to seek to pursue growth
through the identification, acquisition, repositioning and renovation of
additional hotel properties. The Company will be required to obtain additional
capital in the future to meet its expansion plans. Capital may be raised by the
issuance of additional equity or the incurrence of indebtedness. In addition, in
appropriate situations, the Company may seek financing from other sources or
enter into joint ventures and other collaborative arrangements in connection
with the acquisition of hotel properties. The Company may not be successful in
obtaining additional capital in a timely manner, on favorable terms or at all.
Insufficient capital may cause the Company to delay, scale back or abandon some
or all of its property acquisition plans or opportunities.
Competition. The Company competes for the acquisition of hotels with
numerous entities, some of which have greater financial resources than the
Company. The Company believes that, as a result of the downturn experienced by
the lodging industry from the late 1980s through the early 1990s and the
significant number of foreclosures and bankruptcies created thereby, the prices
for many hotels during the past several years have been at historically low
levels, often well below the cost to build new hotels. The recent economic
recovery in the lodging industry and the resulting increase in funds available
for hotel acquisitions has attracted additional investors to enter the hotel
acquisition market, which in turn has caused the cost of hotel acquisitions to
increase and the number of attractive hotel acquisition opportunities to
decrease.
Integration of Operations. To successfully implement its growth strategy,
the Company must be able to continue to successfully acquire hotels on
attractive terms and to integrate the acquired hotels into its existing
operations. The failure of the Company to consolidate the management and
operations and integrate the systems and procedures of the acquired hotels into
the Company's existing operations in a timely and profitable manner could have a
material adverse effect on the results of operations and financial condition of
the Company. There can be no assurance that the Company will be able to achieve
operating results in its newly acquired hotels comparable to the historical
performance of its hotels.
HOTEL RENOVATION RISKS
The renovation of hotels involves risks associated with construction and
renovation of real property, including the possibility of construction cost
overruns and delays due to various factors (including the inability to obtain
regulatory approvals, inclement weather, labor or material shortages and the
unavailability of construction and permanent financing) and market or site
deterioration after acquisition or renovation. Any unanticipated delays or
expenses in connection with the renovation of hotels could have an adverse
effect on the results of operations and financial condition of the Company.
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RISK OF LEVERAGE
Substantially all of the Company's hotels are subject to mortgage
financing, which at June 30, 1997, totaled approximately $180.1 million.
Approximately $9.4 million of the mortgage financing collateralized by the
Company's hotels, and entered into by the various subsidiaries, is guaranteed by
Servico, Inc. Servico, Inc.'s guarantees of mortgage financing generally provide
for direct recourse by the lender against Servico, Inc., without requiring the
lender to seek recourse against either the applicable subsidiary or the hotel
property securing the mortgage financing. As a consequence, if payments under
mortgage financing guaranteed by Servico, Inc., are not timely made, Servico,
Inc. may be required to make payments in accordance with its guarantees.
The Company's leverage poses certain risks for the Company, including the
risks that the Company may not generate sufficient cash flow to service the
indebtedness; that the Company may be unable to obtain additional financing or
refinancing in the future; that, to the extent it is significantly more
leveraged than its competitors, it may be placed at a competitive disadvantage;
and that the Company's capacity to respond to market conditions and other
factors may be adversely affected. The Company's ability to service its debt
will depend on its future performance, which will be subject to prevailing
economic and competitive conditions and other specific factors discussed herein.
Additionally, certain of the mortgages and related loan documents evidencing the
Company's indebtedness contain provisions which, among other things, cross
collateralize and cross default each of the mortgages, prohibit prepayment
during years one through four, impose prepayment penalties during years five
through ten, restrict the Company's ability to utilize the cash generated by the
hotels if the hotels fail to meet certain financial covenants and, in certain
events upon a change in control of the Company, may cause the termination of the
Company's management of the hotels and acceleration of the payment of each of
the loans.
Neither the Company's Articles of Incorporation nor its Bylaws limit the
amount of indebtedness that the Company may incur. Subject to limitations in its
debt instruments, the Company may incur additional debt in the future to finance
acquisitions and renovations. Substantial indebtedness could increase the
Company's vulnerability to general economic and lodging industry conditions
(including increases in interest rates) and could impair the Company's ability
to obtain additional financing in the future and to take advantage of
significant business opportunities that may arise. The Company's indebtedness
is, and will likely continue to be, secured by mortgages on all, or
substantially all, of the hotels, and by the equity of certain subsidiaries of
the Company. There can be no assurance that the Company will in the future be
able to meet its debt service obligations and, to the extent that it cannot, the
Company risks the loss of some or all of its assets, including hotels, to
foreclosure. Further, adverse economic conditions could cause the terms on which
borrowings become available to be unfavorable. In such circumstances, if the
Company requires additional capital to repay indebtedness in accordance with its
terms or otherwise, it could be required to liquidate one or more investments in
hotels at times which may not permit realization of the maximum return on such
investments.
At June 30, 1997, approximately 79% of the Company's current outstanding
indebtedness bore interest at a fixed rate. However, to the extent that the
Company has or incurs additional debt bearing interest at variable rates,
economic conditions could result in increased debt service requirements and
could reduce the amount of cash available for various corporate purposes.
RISKS ASSOCIATED WITH OWNING OR LEASING REAL ESTATE
The Company will be subject to varying degrees of risk generally incident
to the ownership of real estate. These risks include, among other things,
changes in national, regional and local economic conditions, changes in local
real estate market conditions, changes in interest rates and in the
availability, cost and terms of financing, the potential for uninsured casualty
and other losses, the impact of present or future environmental legislation and
adverse changes in zoning laws and other regulations. Many of these risks are
beyond the control of the Company. In addition, real estate investments are
relatively illiquid, resulting in a limited ability of the Company to vary its
portfolio of hotels in response to changes in economic and other conditions.
Ten of the owned hotels are owned in partnerships with other parties. The
Company does not have sole control over decisions regarding sale and refinancing
of these hotels. In addition, the Company's investments
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in these joint ventures may, under certain circumstances, involve risks not
otherwise present in property ownership, including (i) the risk that the
Company's partner in a joint venture may become bankrupt, (ii) buy/sell rights
that exist with respect to certain of such hotels and (iii) the risk that the
Company's partner in a joint venture might at any time have economic or other
business interests or goals that are inconsistent with the business interests or
goals of the Company, and that such partner(s) may be in a position to veto
actions which may be inconsistent with the Company's objectives or policies.
LODGING INDUSTRY RISKS
Risks generally inherent in investments in hotel facilities may cause
operating results for hotels to vary more than for investments in other types of
properties. These factors include the following:
Operating Risks. The Company is subject to risks generally incident
to the lodging industry. These risks include, among other things, the
uncertainty of cash flow due to seasonal fluctuations, changes in general
and local economic conditions, periodic over-building in the hotel industry
or a specific market, varying competition from other hotels, motels and
recreational properties, changes in levels of tourism or business-related
travel due to energy costs or other factors, changes in travel patterns,
labor unavailability and disruptions, the recurring need for renovation,
refurbishment and improvement of hotel properties (including furniture,
fixtures and equipment), the availability of financing for operating or
capital requirements, adverse weather conditions and travel disruptions,
taxes and governmental regulations which influence or determine wages,
prices, interest rates, construction procedures and costs, losses due to
personal injuries, fire, earthquake, collapse or structural defects, the
application of health and beverage laws and other factors, many of which
are beyond the control of the Company. In addition, due to the level of
fixed costs required to operate full-service hotels, certain significant
expenditures necessary for the operation of hotels generally cannot be
reduced when circumstances cause a reduction in revenue.
Competition. The hotel industry is highly competitive in nature.
While there is no single competitor or small number of competitors that are
dominant in the industry, competition within the industry has recently
resulted in consolidations and other ownership changes among major hotel
companies. The Company's hotels generally operate in areas that contain
numerous other competitive lodging facilities, some of which have greater
financial resources than the Company. The Company competes with such
facilities on various bases, including room rates and quality, brand name
recognition, location and other services and amenities offered. New or
existing competitors could significantly lower rates or offer greater
conveniences, services or amenities or significantly expand, improve or
introduce new facilities in markets in which the Company's hotels compete,
thereby adversely effecting the Company's operations.
Maintenance and Refurbishment. For hotels to remain competitive, they
must be maintained and refurbished on an ongoing basis. Such renovations
and refurbishments will increase the need for funds for capital
improvements (whether from reserves, current cash flow or financing).
Moreover, operating revenues may decrease as facilities are removed from
service from time to time during such renovations. See "Hotel Renovation
Risks" above.
Insurance Risks. Hotels have extensive assets, require more
employees, rely more on suppliers and serve more customers than certain
other types of real estate properties. Hotels are also subject in certain
states to dram shop statutes which may give an injured person the right to
recover damages from any establishment which wrongfully served alcoholic
beverages to the person who, while intoxicated, caused the injury. As a
result, hotels may have greater exposure to liability for, among other
things, theft of property and other casualty and property loss, labor
difficulties and personal injuries. In this respect, many businesses,
including those in the lodging industry, have experienced recent increases
in the cost of, and contraction in the availability of, insurance,
resulting in cost escalation and reductions in amounts of coverage
available. The continuation of this trend could render certain types of
desired coverage unavailable with the attendant possibility that certain
claims may exceed coverage.
Seasonality. The hotel industry is seasonal in nature. Generally,
hotel revenues are greater in the second and third quarters than in the
first and fourth quarters. This seasonality can be expected to cause
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quarterly fluctuations in the revenues of the Company. Quarterly earnings
also may be adversely affected by events beyond the Company's control, such
as extreme weather conditions, economic factors and other considerations
affecting travel.
Inflation. Inflationary pressures could have the effect of increasing
operating expenses, including labor and energy costs (and, indirectly,
property taxes) above expected levels at a time when it may not be possible
to increase room rates to offset such higher operating expenses. In
addition, inflation could have a secondary effect upon occupancy rates by
increasing the expense or decreasing the availability of travel by
potential guests. Although the inflation rate has been low recently, there
is no assurance that it will not increase in the future.
RISKS ASSOCIATED WITH FRANCHISE AGREEMENTS
The Company's hotels are all operated pursuant to franchise agreements with
major hotel chains. The franchise agreements generally contain specific
standards for, and restrictions and limitations on, the operation and
maintenance of a hotel in order to maintain uniformity within the franchisor
system. Those limitations may conflict with the Company's business plans.
Further, such standards are often subject to change over time, in some cases at
the discretion of the franchisor, and may restrict a franchisee's ability to
make improvements or modifications to a hotel without the consent of the
franchisor. In addition, compliance with such standards could require a
franchisee to incur significant expenses or capital expenditures. In connection
with changing the franchise affiliation of a hotel, the Company may be required
to incur additional expenses or capital expenditures. Franchise agreements are
typically terminable by the franchisor for failure of the franchisee to maintain
specified operating standards or to make payments due under the applicable
agreements in a timely fashion. In addition, such agreements may be subject to
termination at the end of their stated term. The termination of a franchise
agreement relating to a hotel may have an adverse impact on the operations or
underlying value of such hotel because of the loss of associated name
recognition, marketing support and centralized reservation systems provided by
the franchisor. A majority of the Company's hotels are affiliated with Holiday
Inn and any deterioration in the relationship with or the benefits associated
with being a franchisee of Holiday Inn could have a material adverse impact on
the Company.
ENVIRONMENTAL RISKS
Under various federal, state, and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in such property. Such laws often impose liability whether or not
the owner or operator knew of, or was responsible for, the presence of such
hazardous or toxic substances. Furthermore, a person that arranges for the
disposal of a hazardous substance at another property or transports a hazardous
substance for disposal or treatment at another property may be liable for the
costs of removal or remediation of hazardous substances at that property,
regardless whether that person owns or operates that property. The costs of any
such remediation or removal may be substantial, and the presence of any such
substance, or the failure promptly to remediate any such substance, may
adversely affect the property owner's ability to sell or lease the property, to
use the property for its intended purpose, or to borrow using the property as
collateral. Other federal, state and local laws, ordinances and regulations
require abatement or removal of certain asbestos-containing materials in
connection with demolition or certain renovations or remodeling, impose certain
worker protection and notification requirements, and govern emissions of and
exposure to asbestos fibers in the air. Additionally, federal, state and local
laws, ordinances and regulations and the common law impose on owners and
operators certain requirements regarding conditions and activities that may
affect human health or the environment. These conditions and activities include,
for example, the presence of lead in drinking water, the presence of
lead-containing paint in occupied structures, and the ownership or operation of
underground storage tanks. Failure to comply with applicable requirements could
result in difficulty in the lease or sale of any affected property or the
imposition of monetary penalties, in addition to the costs required to achieve
compliance and potential liability to third parties. Any liability resulting
from non-compliance or other claims relating to environmental matters could have
a material adverse effect on the Company's results of operations and financial
condition.
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GOVERNMENTAL REGULATION
A number of states regulate the licensing of hotels and restaurants,
including liquor license grants, by requiring registration, disclosure
statements and compliance with specific standards of conduct. The Company
believes that it is substantially in compliance with these requirements.
Managers of hotels are also subject to laws governing their relationship with
hotel employees, including minimum wage requirements, overtime, working
conditions and work permit requirements. Compliance with, or changes in, these
laws could reduce the revenue and profitability of the Company's hotels and
could otherwise adversely affect the Company's results of operations and
financial condition.
Under the Americans with Disabilities Act (the "ADA"), all public
accommodations are required to meet certain requirements related to access and
use by disabled persons. These requirements became effective in 1992. Although
significant amounts have been and continue to be invested in ADA required
upgrades to the Company's hotels, a determination that the Company is not in
compliance with the ADA could result in a judicial order requiring compliance,
imposition of fines or an award of damages to private litigants. The Company is
likely to incur additional costs of complying with the ADA; however, such costs
are not expected to have a material adverse effect on the Company's results of
operations and financial condition.
SUBSTANTIAL RELIANCE ON KEY PERSONNEL
The Company will place substantial reliance on the hotel industry knowledge
and experience and the continued services of its senior management, led by Mr.
David Buddemeyer, the Company's President and Chief Executive Officer. The
Company's future success and its ability to manage future growth depend in large
part upon the efforts of these persons and on the Company's ability to attract
and retain other highly qualified personnel. Competition for such personnel is
intense, and there can be no assurance that the Company will be successful in
attracting and retaining such personnel. The loss of the services of Mr.
Buddemeyer or the Company's inability to attract and retain other highly
qualified personnel may adversely affect the results of operations and financial
condition of the Company.
ANTI-TAKEOVER PROVISIONS
The Company's Articles of Incorporation provide that certain transactions
must be approved by the holders of at least 80% of the outstanding Common Stock,
unless approved by the Company's Board of Directors. The Company's Bylaws divide
the Company's Board of Directors into three classes of directors serving
staggered three-year terms, with one class of directors to be elected at each
annual meeting of shareholders. Additionally, as a Florida corporation, the
Company is also governed by the provisions of Florida corporate law regarding
affiliated transactions and control share acquisitions, which impose
restrictions and require specific procedures to be followed with respect to
certain takeover offers and business combinations, including, but not limited
to, combinations with interested shareholders and affiliates of the Company. The
provisions in the Company's Articles of Incorporation, the classification of the
Company's Board of Directors and the anti-takeover provisions of the Florida
corporate law will tend to assist the Board of Directors and management of the
Company in retaining their existing positions and will render more difficult or
discourage unsolicited takeover attempts, even if such actions were desired by
all shareholders of the Company other than directors and management
shareholders.
USE OF PROCEEDS
This Prospectus relates to shares of Common Stock which may be offered and
issued by the Company from time to time in the acquisition of other businesses
or properties. Other than the businesses or properties acquired, there will be
no proceeds to the Company from these offerings.
7
<PAGE> 11
SELECTED CONSOLIDATED FINANCIAL DATA
The following is a summary of certain financial information of the Company
and its consolidated subsidiaries and is qualified in its entirety by, and
should be read in conjunction with, the detailed information and consolidated
financial statements, including notes thereto, included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996 and its Quarterly
Report on Form 10-Q for the period ended June 30, 1997. The unaudited
consolidated interim period financial statements include, in the opinion of
management, all adjustments necessary to present fairly the data for such
periods. The results of operations for interim periods are not necessarily
indicative of results to be achieved for full fiscal years.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31,
------------------------- ------------------------------------
1997 1996 1996 1995 1994
----------- ----------- ---------- ---------- ----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues....................................... $ 133,823 $ 115,899 $ 239,526 $ 178,480 $ 149,683
Income before non-recurring items, net of
taxes........................................ 4,452 3,820 5,398 4,264 2,588
Non-recurring items, net of taxes.............. -- 1,666 3,150 (356) 193
Income before extraordinary items, net of
taxes........................................ 4,452 5,486 8,548 3,909 2,781
Extraordinary items, net of taxes.............. (3,751) (202) (348) -- 1,436
Net income..................................... 701 5,284 8,200 3,909 4,217
EBITDA(a)...................................... 34,727 29,036 57,915 36,894 26,376
Fully diluted per common share data:
Income before non-recurring items, net of
taxes...................................... .45 .40 .55 .46 .31
Income before extraordinary items, net of
taxes...................................... .45 .57 .87 .42 .33
Net income................................... $ .07 $ .55 $ .84 $ .42 $ .50
Weighted average shares........................ 9,944,561 9,668,357 9,762,707 9,318,670 8,414,945
Cash dividends per common share................ -- -- -- -- --
CONSOLIDATED BALANCE SHEET DATA:
End of Period:
Total assets................................. $ 457,936 $ 417,148 $ 439,786 $ 324,202 $ 228,900
Long-term obligations, less current
portion.................................... 183,021 282,076 284,880 210,242 143,830
Total stockholders' equity................... 210,974 70,066 74,738 62,820 46,740
</TABLE>
- ---------------
(a) Earnings before interest expense, income taxes, depreciation and
amortization "EBITDA", is a widely regarded industry measure of lodging
performance used in the assessment of hotel property values. EBITDA is not
indicative of, and should not be used as an alternative to net income or net
cash provided by operations as specified by generally accepted accounting
principles.
OTHER INFORMATION
Acquisitions involving the offer and issuance of shares of the Company's
Common Stock may require approval by certain federal and state regulatory
bodies. The rights of dissenting stockholders of any acquired corporation and
the federal income tax consequences for persons involved in any acquisition
involving the issuance of shares of the Company Common Stock will be determined
on a case-by-case basis for each acquisition.
RESTRICTIONS ON RESALE
This Prospectus, which has been prepared in accordance with the
Commission's Form S-4, is not available for use in connection with reoffers or
resales of securities acquired pursuant to this Prospectus by persons who may be
deemed "affiliates" of the Company as such term is defined by the Commission.
Such "affiliates" may sell such shares only pursuant to a prospectus prepared in
accordance with a Commission form which is available for such purpose or
pursuant to an available exemption from the registration requirements of the
Securities Act of 1933, as amended (the "Act").
8
<PAGE> 12
EXPERTS
The consolidated financial statements of Servico, Inc. appearing in
Servico, Inc.'s Annual Report (Form 10-K) for the year ended December 31, 1996
have been audited by Ernst & Young LLP, independent certified public
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
With respect to the unaudited condensed consolidated interim financial
information for the three and six month periods ended June 30, 1997 and 1996 and
three month periods ended March 31, 1997 and 1996, incorporated by reference in
this Prospectus, Ernst & Young LLP have reported that they have applied limited
procedures in accordance with professional standards for a review of such
information. However, their separate reports, included in Servico, Inc.'s
Quarterly Reports on Form 10-Q for the quarters ended June 30, 1997 and March
31, 1997, and incorporated herein by reference, state that they did not audit
and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted considering the limited nature of the review procedures applied.
The independent certified public accountants are not subject to the liability
provisions of Section 11 of the Act for their reports on the unaudited interim
financial information because these reports are not "reports" or a "part" of the
Registration Statement prepared or certified by the independent certified public
accountants within the meaning of Sections 7 and 11 of the Act.
LEGAL MATTERS
The validity of the shares of the Company's Common Stock being registered
under the registration statement of which this Prospectus is a part will be
passed upon for the Company by Stearns Weaver Miller Weissler Alhadeff &
Sitterson, P.A., 150 West Flagler Street, Suite 2200, Miami, Florida 33130-1557.
9
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0831 of the Florida Business Corporation Act (the "Florida
Act") provides that a director is not personally liable for monetary damages to
the corporation or any person for any statement, vote, decision or failure to
act regarding corporate management or policy, by a director, unless: (a) the
director breached or failed to perform his duties as a director; and (b) the
director's breach of, or failure to perform, those duties constitutes: (i) a
violation of criminal law unless the director had reasonable cause to believe
his conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (ii) a transaction from which the director derived an improper
personal benefit, either directly or indirectly; (iii) a circumstance under
which the director is liable for an improper distribution; (iv) in a proceeding
by, or in the right of the corporation to procure a judgment in its favor or by
or in the right of a shareholder, conscious disregard for the best interests of
the corporation, or willful misconduct; or (v) in a proceeding by or in the
right of someone other than the corporation or a shareholder, recklessness or an
act or omission which was committed in bad faith or with malicious purpose or in
a manner exhibiting wanton and willful disregard of human rights, safety or
property.
Section 607.0850 of the Florida Act provides that a corporation shall have
the power to indemnify any person who was or is a party to any proceeding (other
than an action by, or in the right of, the corporation), by reason of the fact
that he is or was a director, officer or employee or agent of the corporation
against liability incurred in connection with such proceeding if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 607.0850 also provides that a corporation shall have the power to
indemnify any person, who was or is a party to any proceeding by, or in the
right of, the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, against expenses and amounts paid in settlement not exceeding, in
the judgment of the board of directors, the estimated expense of litigating the
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, including any appeal thereof.
Under Section 607.0850, indemnification is authorized if such person acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation, except that no indemnification may be
made in respect of any claim, issue, or matter as to which such person is
adjudged to be liable unless, and only to the extent that, the court in which
such proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability, but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court deems proper. To the
extent that a director, officer, employee or agent has been successful on the
merits or otherwise in defense of any of the foregoing proceedings, or in
defense of any claim, issue or matter therein Section 607.0850 provides that, he
shall be indemnified against expenses actually and reasonably incurred by him in
connection therewith. Under Section 607.0850, any indemnification, unless
pursuant to a determination by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that the indemnification of
the director, officer, employee or agent is proper under the circumstances
because he has met the applicable standard of conduct. Notwithstanding the
failure of a corporation to provide indemnification, and despite any contrary
determination by the corporation in a specific case, Section 607.0850 permits a
director, officer, employee or agent of the corporation who is or was a party to
a proceeding to apply for indemnification to the appropriate court and such
court may order indemnification if it determines that such person is entitled to
indemnification under the applicable standard.
Section 607.0850 also provides that a corporation has the power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation against any liability asserted
against him and incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the power to indemnify
him against such liability under the provisions of Section 607.0850.
II-1
<PAGE> 14
The Registrant's bylaws provide that it shall indemnify its officers and
directors and former officers and directors to the full extent permitted by law.
The Registrant's directors and officers are covered by insurance policies
indemnifying them against certain liabilities, including liabilities under the
federal securities laws (other than liability under Section 16(b) of the
Exchange Act), which might be incurred by them in such capacities.
ITEM 21. EXHIBITS
The following exhibits are either filed herewith or incorporated by
reference to documents previously filed as indicated below:
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
- -------- -----------
<C> <C> <S>
5 -- Opinion of Stearns Weaver Miller Weissler Alhadeff &
Sitterson, P.A.
15 -- Letter from Independent Certified Public Accountants
relating to unaudited interim financial information for the
three and six months ended June 30, 1997 and 1996, and the
three months ended March 31, 1997 and 1996
23.1 -- Consent of Stearns Weaver Miller Weissler Alhadeff &
Sitterson, P.A.
23.2 -- Consent of Ernst & Young LLP
24.1 -- Power of Attorney (included with the signature pages to this
Registration Statement)
</TABLE>
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes: (a) To file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement: (i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (the "Act"); (ii) To reflect in the
prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the change in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and (iii) To include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; (b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof; and (c) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned Registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration
II-2
<PAGE> 15
form with respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other Items of the applicable
form.
The Registrant undertakes that every prospectus (i) that is filed pursuant
to the immediately preceding paragraph, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 20 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of West Palm Beach, State of
Florida, on the 29th day of October, 1997.
SERVICO, INC.
By: /s/ David Buddemeyer
------------------------------------
David Buddemeyer,
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Buddemeyer and Warren M. Knight, and each
of them acting along, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Registration Statement or any registration
statement relating to this offering to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ David Buddemeyer Chairman of the Board, October 29, 1997
- ----------------------------------- President and Chief Executive
David Buddemeyer Officer
PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER:
/s/ Warren M. Knight Vice President -- Finance and Chief October 29, 1997
- ----------------------------------- Financial and Principal Accounting
Warren M. Knight Officer
/s/ Joseph C. Calabro Director October 29, 1997
- -----------------------------------
Joseph C. Calabro
/s/ Michael A. Leven Director October 29, 1997
- -----------------------------------
Michael A. Leven
</TABLE>
II-4
<PAGE> 17
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ PETER R. TYSON Director October 29, 1997
- -----------------------------------
Peter R. Tyson
/s/ RICHARD H. WEINER Director October 29, 1997
- -----------------------------------
Richard H. Weiner
</TABLE>
II-5
<PAGE> 1
EXHIBIT 5
October 28, 1997
Mr. David A. Buddemeyer
Servico, Inc.
1601 Belvedere Road
West Palm Beach, FL 33406
Re: Servico, Inc. / Offering of Shares of Common Stock
--------------------------------------------------
Dear Mr. Buddemeyer:
As counsel to Servico, Inc. (the "Corporation"), we have examined the
Articles of Incorporation and Bylaws of the Corporation as well as such other
documents and proceedings as we have considered necessary for the purposes of
this opinion. We have also examined and are familiar with the proceedings taken
by the Corporation to authorize the issuance of up to 2.3 million shares of
Common Stock, par value $.01 per share, of the Corporation (the "Common Stock").
In addition, we have examined a copy of the Prospectus included in the
Corporation's Registration Statement on Form S-4 (the "Prospectus") to be filed
with the Securities and Exchange Commission on October 29, 1997.
In rendering this opinion, we have assumed, without independent
investigation: (i) the authenticity of all documents submitted to us as
originals; (ii) the conformity to original documents of all documents submitted
to us as certified or photostatic copies; and (iii) the genuineness of all
signatures. In addition, as to questions of fact material to the opinions
expressed herein, we have relied upon such certificates of public officials,
corporate agents and officers of the Corporation and such other certificates as
we deemed relevant.
Based upon the foregoing, and having regard to legal considerations which
we deem relevant, we are of the opinion that following the issuance and delivery
of the Common Stock against payment of adequate consideration therefore in
accordance with the terms of the Prospectus, the Common Stock will be validly
issued, fully paid and non-assessable.
Very truly yours,
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
<PAGE> 1
EXHIBIT 15
October 27, 1997
Board of Directors and Stockholders
Servico, Inc.
We are aware of the incorporation by reference in the Registration
Statement (Form S-4 No. ) of Servico, Inc. for the registration of 2,300,000
shares of its common stock of our reports dated April 18, 1997 and July 31,
1997, relating to the unaudited condensed consolidated interim financial
statements of Servico, Inc. that are included in its Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997.
Pursuant to Rule 436(c) of the Securities Act of 1933, our reports are not
a part of the registration statement prepared or certified by accountants within
the meaning of Section 7 or Section 11 of the Securities Act of 1933.
Very truly yours,
Ernst & Young LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A.
We hereby consent to the inclusion of our opinion letter as an Exhibit to
this Registration Statement on Form S-4 of Servico, Inc. and to any references
to this firm in such registration statement and in the documents incorporated
therein by reference.
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
Miami, Florida
October 29, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4 No. ) and related Prospectus of Servico,
Inc. for the registration of 2,300,000 shares of its common stock and to the
incorporation by reference therein of our report dated February 13, 1997, with
respect to the consolidated financial statements of Servico, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1996, filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
West Palm Beach, Florida
October 27, 1997
