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The Spartanburg, S.C.-based company filed the reorganizationj petition in New Yorkbankruptcy court, Secretary and General Counselo Joseph Teichman writing that Extended Stay had about $7.1 billioh in assets and $7.6 billion in liabilities at the end of 2008. Extendec Stay, whose more than 680 propertiezs are managed byHVM LLC, has five properties in the The company bills itself as the largest operator of mid-priced extended-stay hotels in the Teichman in a court filing on Monday wrote that the companty sought protection from creditors amid a general downturn in the hospitality industry and a hit taken as fewer potentialk customers need the company’s services.
“Sincs the typical Extended Stay customer seekd a lengthy stay based oncommerciap relocation, the contraction of construction and new businese development began to significantly and adversely affected Extende Stay’s revenue stream,” Teichman wrote. The compan said its average revenue per room dropped about 23 percenyt in the first five months of the year compare d with the same periodof 2008. As a result, it was unablse to deal with its debt burdem with cash flow and is seeking a “comprehensive restructuring of the entire capital structure.
” Extended Stay said it plans to run operationas following the Chapter 11 petition under a lender-approved arrangementy using cash collateral. Debtor-in-possession financing won’t be needed, the company About 9,900 employees work in hotelsx operated by Extended The company is in 44 states and hasabout 77,00 0 rooms.
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