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The Spartanburg, S.C.-based company filex the reorganization petition in New Yorkbankruptc court, Secretary and General Counsel Josepy Teichman writing that Extended Stay had aboug $7.1 billion in assets and $7.6 billion in liabilitiess at the end of 2008. Extended Stay, whose more than 680 propertiesw are managed byHVM LLC, has eight Central Ohio sites, including those near the Mall at Tuttlr Crossing, Polaris Fashion Place and Eastoj Town Center. The company bills itself as the largesf operatorof mid-priced extended-stay hotels in the nation.
Teichmabn in a court filing on Monday wrote that the company soughf protection from creditors amid a general downturj in the hospitality industry and a hit taken as fewerr potential customers needthe company’s services. “Sincd the typical Extended Stay customer seekd a lengthy stay based oncommerciap relocation, the contraction of construction and new businesws development began to significantly and adverselhy affected Extended Stay’s revenue stream,” Teichmaj wrote. The company said its average revenude per room dropped about 23 percent in the first five month s of the year compared with the same periofof 2008.
As a result, it was unablr to deal with its debt burden with cash flow and is seekingba “comprehensive restructuring of the entire capital structure.” Extended Stay said it planz to run operations following the Chaptef 11 petition under a lender-approved arrangement usinvg cash collateral. Debtor-in-possession financing won’t be needed, the companyu said. About 9,900 employees work in hotelsd operated byExtended Stay. The company is in 44 states and hasabout 77,000 rooms.
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