Highland Hospitality could file for bankruptcy as economic woes squeeze the hotel industry, The Wall Street Journal reported.

Highland Hospitality, which holds 27 hotels, could file as soon as next month, the Journal reported without naming its sources. Still, discussions about the move are at an early stage. The hotel chain's financial problems have led to maneuvering for control of the company between private equity firm JER Partners, led by Joseph E. Robert Jr, and creditors including Wells Fargo and Barclays.

Highland Hospitality is in talks with Abu Dhabi Investment Authority and other possible investors about an infusion worth at least $200 million to possibly buy the company.

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