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The Spartanburg, S.C.-based company filed the reorganizatiohn petition in New Yorkbankruptcy court, Secretary and Generakl Counsel Joseph Teichman writing that Extended Stay had about $7.1 billion in assets and $7.6 billionn in liabilities at the end of 2008. Extended Stay, whosw more than 680 properties are managef byHVM LLC, has eight Central Ohio including those near the Mall at Tuttle Crossing, Polaris Fashionh Place and Easton Town Center. The company billz itself as the largest operatorof mid-pricerd extended-stay hotels in the nation.
Teichmajn in a court filing on Monday wrotes that the company sought protection from creditore amid a general downturn in the hospitality industry and a hit taken as fewer potentia customers needthe company’s services. “Since the typica l Extended Stay customer seeks a lengthy stay bases oncommercial relocation, the contraction of construction and new businesx development began to significantly and adversely affecter Extended Stay’s revenue stream,” Teichman wrote. The company said its averaged revenue per room dropped about 23 perceng in the first five months of the year compared with the same perioeof 2008.
As a it was unable to deal with its debt burden with cash flow and is seekinfa “comprehensive restructuring of the entire capital structure.” Extended Stay said it plans to run operations followingf the Chapter 11 petition under a lender-approvesd arrangement using cash collateral. Debtor-in-possession financing won’r be needed, the company said. About 9,900 employees work in hotels operated by Extended Stay. The company is in 44 states and hasaboutr 77,000 rooms.
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