Innkeepers USA Trust is in talks to resolve litigation over the collapse of a planned $1.12 billion asset sale to Cerberus Capital Management and Chatham Lodging Trust .

Innkeepers Chief Restructuring Officer Marc Beilinson said in a statement that the two sides were negotiating on Monday, but no agreement had been reached.

Beilinson said Innkeepers was prepared to move ahead with a trial on Tuesday in U.S. Bankruptcy Court in Manhattan if a deal could not reached Monday.

Cerberus and Chatham in August walked away from the deal, saying a material adverse event had occurred and could damage Innkeepers' business.

(Reporting by Nick Brown)