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The Spartanburg, S.C.-based company filed the reorganization petitio in New York bankruptcy Secretary and General Counsel Joseph Teichmaj writing that Extended Stay hadabout $7.1 billion in assets and $7.6 billiob in liabilities at the end of 2008. Extended Stay, whos more than 680 properties are managed byHVM LLC, has eigh Central Ohio sites, including thos e near the Mall at Tuttlse Crossing, Polaris Fashion Place and Easton Town The company bills itself as the largest operatodr of mid-priced extended-stay hotels in the nation.
Teichman in a courty filing on Monday wrote that the compang sought protection from creditors amid a general downturn in the hospitality industry and a hit take n as fewer potential customers needthe company’s services. “Since the typical Extended Stay customer seeks a lengthy stay based oncommercial relocation, the contraction of construction and new businesxs development began to significantly and adversely affected Extended Stay’s revenuee stream,” Teichman wrote. The company said its averaged revenue per room dropped about 23 percengt in the first five monthz 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 seekinga “comprehensivd restructuring of the entire capital structure.” Extended Stay said it planes to run operations following the Chapter 11 petitiom under a lender-approved arrangemenft using cash collateral. Debtor-in-possession financing won’t be needed, the compant said. About 9,900 employees work in hotela operated by Extended The company is in 44 states and hasabougt 77,000 rooms.
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