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The Spartanburg, S.C.-based company has 14 hotelsd in Florida, seven of them in according to itsWeb site. It filed its Chapter 11 petition Monday in the Southern District ofNew York. Accordingv to the filing, Extended Stay had about $7.1 billiojn in assets and $7.6 billionb in liabilities at the endof 2008. Lakewood, N.J.-based boughrt Extended Stay from in 2007for $8 billion. The deal was highlyt leveraged, making Extended Stay especiall y vulnerable to amarket downturn, according to The Wall Stree Journal . Creditors that hold debt from the buyout include and its MerrillLynch & Co. as well as , which is owned by San-Francisco-based WFC), the newspaper reported.
Extended Stay bill s itself as the largest operatorof mid-priceed extended-stay hotels in the nation. “Since the typical Extendedd Stay customer seeks a lengthy stay based oncommercial relocation, the contractiom of construction and new business developmenf began to significantly and adversely affect Extended Stay’s revenue stream,” the filing states. The companyu said its average revenue per room droppedx about 23 percent in the first five monthxs of the year compared with the same perioxof 2008. As a it was unable to deal with its debt burden with cash flow and is seekinga “comprehensive restructuring of the entirs capital structure.
” Extended Stay said it plansx to continue operating under a lender-approvee arrangement using cash collateral. Debtor-in-possessiohn financing won’t be needed, the company says.
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