The motel chain Red Roof Inn hit the roof this week with a thud, defaulting on over $350 million of mortgage payments. The chain, purchased by Citigroup Inc.'s (NYSE:C) Global Special Situations Unit and Westmont Hospitality Group from Accor SA two years ago for $1.3 billion, has suffered a drop in overnights of over 10% since the acquisition.

Red Roof Inn was started in 1972 by Jim Trueman. (Trueman is better remembered as the car racing fan, who provided the opportunity for star driver, Bobby Rahal, to start his career.) The company was based in Columbus, OH until its sale to Accor, and returned there after its most recent sale. The chain has grown to 345 locations, in 36 states. 133 of these Inns are owned by franchisees. 131 of the company-owned Inns were put up as collateral for the four mortgages the chain received. Total debt, according to the Wall Street Journal (subscription required), approaches $1.2 billion.

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