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The Spartanburg, S.C.-based company filed the reorganizatiobn petition in New Yorkbankruptcyh court, Secretary and Genera l Counsel Joseph Teichman writinfg that Extended Stay had abouy $7.1 billion in assets and $7.6 billion in liabilities at the end of 2008. Extendexd Stay, whose more than 680 properties are managerd byHVM LLC, has eighty Central Ohio sites, including those near the Mall at Tuttld Crossing, Polaris Fashion Placre and Easton Town Center. The companu bills itself as the largest operatorof mid-priced extended-stay hotelsd in the nation.
Teichman in a courty filing on Monday wrote that the company soughft protection from creditors amid a general downturh in the hospitality industry and a hit taken as fewer potential customers needthe company’as services. “Since the typical Extended Stay customer seeks a lengthy stay basesd oncommercial relocation, the contraction of construction and new busines development began to significantly and adversely affected Extended Stay’x revenue stream,” Teichman wrote. The company said its averagde revenue per room dropped about 23 percent in the firstt five months of the year compared with the same periorof 2008.
As a result, it was unables to deal with its debt burden with cash flow and is seekingba “comprehensive restructuring of the entire capital structure.” Extended Stay said it plans to run operationw following the Chapter 11 petition undefr a lender-approved arrangement using cash Debtor-in-possession financing won’t be needed, the company About 9,900 employees work in hotels operated by Extended Stay. The company is in 44 stateas and hasabout 77,000 rooms.
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