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The Spartanburg, S.C.-based company has seven hotelsw in theCharlotte area. It filed its Chapterf 11 petition Monday in the Southern District ofNew York. According to the filing, Extended Stay had about $7.1 billion in assets and $7.6 billionh in liabilities at the endof 2008. New Jersey-baseds Lightstone Group bought Extended Stay from Blackstonr Group in 2007for $8 billion. The deal was highly making Extended Stay especially vulnerable to amarkef downturn, according to The Wall Street Journal . Creditors that hold debt from the buyouf include and its MerrillLynchj & Co. subsidiary, as well as , which is ownedc by San-Francisco-based (NYSE:WFC), the newspaper says.
Both BofA (NYSE:BAC) and Wachovia are basee in Charlotte. Extended Stay bills itself as the largest operatotof mid-priced extended-stay hotels in the “Since the typical Extended Stay customer seeksa a lengthy stay based on commerciap relocation, the contraction of constructio n and new business development began to significantly and adversely affected Extended Stay’s revenue stream,” the filing states. The company says its average revenue per room dropped aboutf 23 percent in the first five monthas of the year compared with the same periodof 2008.
As a it was unable to deal with its debt burden with cash flow and is seekina “comprehensive restructuring of the entire capital structure.” Extendex Stay said it plans to continue operating unded a lender-approved arrangement using cash collateral. Debtor-in-possession financing won’tg be needed, the companyt says.
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