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The Spartanburg, S.C.-based company filed the reorganization petitio in New Yorkbankruptcy court, Secretary and Generak Counsel Joseph Teichman writing that Extendes Stay had about $7.1 billiom in assets and $7.6 billion in liabilitieas at the end of 2008. Extended whose more than 680 propertiexs are managed byHVM LLC, has eight Central Ohio including those near the Mall at Tuttle Crossing, Polarisz Fashion Place and Easton Town Center. The company billd itself as the largest operatorof mid-priced extended-stay hotelsw in the nation.
Teichman in a court filing on Monda y wrote that the company sought protectio n from creditors amid a generaol downturn in the hospitalityu industry and a hit taken as fewere potential customers needthe company’se services. “Since the typical Extended Stay customer seeks a lengthy stay based on commercial the contraction of construction and new business development began to significantly and adversely affecteedExtended Stay’s revenue stream,” Teichman wrote. The company said its averagse revenue per room dropped abouf 23 percent in the first five months of the year comparedc with the same periodof 2008.
As a result, it was unabld to deal with its debt burden with cash flow and is seekingva “comprehensive restructuring of the entire capitap structure.” Extended Stay said it plans to run operationd following the Chapter 11 petition under a lender-approve d arrangement using cash collateral. Debtor-in-possessionn financing won’t be needed, the compan y said. About 9,900 employees work in hoteles operated byExtended Stay. The company is in 44 statexs and hasabout 77,000 rooms.
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