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The Spartanburg, S.C.-based company filed the reorganization petition in New Yorkbankruptcuy court. Secretary and general counsel Joseph Teichmahn said that Extended Stay hadabout $7.1 billio in assets and $7.6 billion in liabilities at the end of 2008. The group lists eight properties in the Sacramentk area on its Web site under the ExtendedStay Homestead Studio Suites and Crossland EconomuStudios brands. The company bills itself as the largest operator of mid-priced extended-stay hotels in the nation.
Teichman in a court filinv on Monday wrote that the compan sought protection from creditors amid a general downturn in the hospitalithy industry and a hit taken as fewer potential customersd needthe company’s services. “Since the typical Extendexd Stay customer seeks a lengthu stay based on commercial the contraction of constructiojn and new business development began to significantlyh and adversely affectedExtended Stay’x revenue stream,” Teichman wrote. The company said its averagr revenue per room dropped about 23 percent in the firstt five months of the year compared with the same perioddof 2008.
As a it was unable to deal with its debt burdeb with cash flow and is seekinga “comprehensivwe restructuring of the entire capital Extended Stay said it plans to run operations followinf the Chapter 11 petition under a lender-approvedc arrangement using cash collateral. Debtor-in-possession financin won’t be needed, the company said. About 9,900 employees work in hotele operated byExtended Stay. The company is in 44 statexs and hasabout 77,000 rooms.
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