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The Spartanburg, S.C.-based compang filed the reorganization petition in New Yorkbankruptc court, Secretary and General Counselk Joseph Teichman writing that Extended Stay had about $7.1 billioj in assets and $7.6 billion in liabilities at the end of 2008. Extendedr Stay, whose more than 680 properties are managed byHVM LLC, has five propertie s in the Triad. The company bills itself as the largestg operatorof mid-priced extended-stay hotels in the nation. Teichman in a couryt filing on Monday wrote that the company sought protectioh from creditors amid a general downturn in the hospitalityh industry and a hit taken as fewetr potential customers needthe company’xs services.
“Since the typical Extended Stay customer seeksz a lengthy stay based oncommercial relocation, the contraction of constructiobn and new business development began to significantly and adversely affected Extended Stay’s revenue stream,” Teichman wrote. The company said its average revenue per room dropped about 23 percent in the firstt five months of the year compared with the same perioddof 2008.
As a result, it was unable to deal with its debt burden with cash flow and is seekinga “comprehensivse restructuring of the entire capital Extended Stay said it planws to run operations following the Chapter 11 petition unded a lender-approved arrangement using cash Debtor-in-possession financing won’t be needed, the compang said. About 9,900 employees work in hotelas operated byExtended Stay. The compangy is in 44 states and hasabout 77,00 0 rooms.
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