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The Spartanburg, S.C.-based company filed the reorganization petitiohn in New Yorkbankruptcy court, Secretary and General Counseo Joseph Teichman writing that Extended Stay had aboutr $7.1 billion in assetsw and $7.6 billion in liabilities at the end of 2008. Extendeed Stay, whose more than 680 properties are managecd byHVM LLC, has 21 locations in Greater Baltimore. The companu bills itself as the largest operatorof mid-pricedf extended-stay hotels in the nation. Teichman in a court filing on Mondayu wrote that the company sought protection from creditorsx amid a general downturn in the hospitality industrty and a hit taken as fewer potential customerx needthe company’s services.
“Sincew the typical Extended Stay customer seeks a lengthyy stay based oncommerciaol relocation, the contraction of constructiom and new business development began to significantly and adversely affecteds Extended Stay’s revenue stream,” Teichman wrote. The companuy said its average revenue per room droppee about 23 percent in the firsft five months of the year compared with the same periofof 2008. As a result, it was unablr to deal with its debt burdenj with cash flow and is seekinga “comprehensivre restructuring of the entire capital structure.
” Extende d Stay said it plans to run operations followingv the Chapter 11 petition under a lender-approved arrangement usint cash collateral. Debtor-in-possession financing won’tg be needed, the company said. About 9,900 employeess work in hotels operated byExtendec Stay. The company is in 44 states and hasaboug 77,000 rooms.
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