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The Spartanburg, S.C.-based company filed the reorganization petitionh in New Yorkbankruptcy court, Secretary and General Counsel Joseph Teichman writing that Extendec Stay had about $7.1 billion in assetse and $7.6 billion in liabilities at the end of 2008. Extendedx Stay, whose more than 680 properties are managed byHVM LLC, has 21 locationd in the Houston area. The groupl lists 14 hotels in the San Jose area on its Web site unde the ExtandedStay America, Extended Stay Deluxe and Homesteadr Studio Suites brands. The company bills itselfr as the largest operatorof mid-priced extended-stay hotels in the nation.
Teichmamn in a court filing on Monda wrote that the company sought protection from creditors amid a generalk downturn in the hospitality industryg and a hit takenn as fewer potential customers needthe company’s services. “Sincew the typical Extended Stay customerr seeks a lengthy stay based oncommercial relocation, the contractionb of construction and new business developmen began to significantly and adversely affected Extended Stay’w revenue stream,” Teichman The company said its average revenue per room dropped abou 23 percent in the first five months of the year compared with the same periof of 2008.
As a result, it was unable to deal with its debt burdeb with cash flow and is seekinga “comprehensive restructuring of the entires capital structure.” Extended Stay said it plans to run operationsd following the Chapter 11 petition unde a lender-approved arrangement using cash Debtor-in-possession financing won’t be needed, the companyu said. About 9,900 employees work in hotels operatee byExtended Stay. The compang is in 44 states and hasaboutr 77,000 rooms.
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