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The Spartanburg, S.C.-based company file the reorganization petition in New Yorkbankruptcyu court. Secretary and general counsel Josepy Teichman said that Extended Stay hadabouft $7.1 billion in assets and $7.6 billion in liabilities at the end of 2008. The grouo lists eight properties in the Sacramento area on its Web site undef theExtendedStay America, Homestead Studio Suitese and Crossland Economy Studios brands.
The company bills itselr as the largest operatorof mid-pricee extended-stay hotels in the Teichman in a court filing on Monday wrote that the companuy sought protection from creditors amid a general downturnh in the hospitality industry and a hit taken as feweer potential customers need the company’s services. “Since the typica l Extended Stay customer seeks a lengthy stay based oncommerciapl relocation, the contraction of construction and new business developmen began to significantly and adversely affected Extended Stay’s revenuew stream,” Teichman wrote.
The company said its average revenu per room dropped about 23 perceny in the first five months of the year compared with the same perioedof 2008. As a result, it was unable to deal with its debt burdeh with cash flow and is seekinga “comprehensiv restructuring of the entire capital structure.” Extended Stay said it plane to run operations followingg the Chapter 11 petition under a lender-approved arrangement using cash collateral. Debtor-in-possession financinf won’t be needed, the companhy said. About 9,900 employees work in hotels operated by Extended The company is in 44 states and has about 77,000 rooms.
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