Posted on 06/15/2009 5:00:47 PM PDT by SeekAndFind
Extended Stay Hotels has filed for Chapter 11 bankruptcy protection, buckling under debt as its revenue dries up in the recession.
The Spartanburg, S.C.-based company filed its Chapter 11 petition Monday in the Southern District of New York. Extended Stay - which operates under the brands of Extended Stay America, Crossland Economy Studios, Extended Stay Deluxe and Homestead Studio Suites — operates 15 hotels in the Orlando area.
According to the filing, Extended Stay had about $7.1 billion in assets and $7.6 billion in liabilities at the end of 2008.
Lakewood, N.J.-based Lightstone Group bought Extended Stay from Blackstone Group in 2007 for $8 billion. The deal was highly leveraged, making Extended Stay especially vulnerable to a market downturn, according to The Wall Street Journal. Creditors that hold debt from the buyout include Bank of America Corp. and its Merrill Lynch & Co. subsidiary, as well as Wachovia Corp., which is owned by San-Francisco-based Wells Fargo & Co. (NYSE: WFC), the newspaper reported.
Extended Stay bills itself as the largest operator of mid-priced extended-stay hotels in the nation.
“Since the typical Extended Stay customer seeks a lengthy stay based on commercial relocation, the contraction of construction and new business development began to significantly and adversely affected Extended Stay’s revenue stream,” the filing states.
The company said its average revenue per room dropped about 23 percent in the first five months of the year compared with the same period of 2008. As a result, it was unable to deal with its debt burden with cash flow and is seeking a “comprehensive restructuring of the entire capital structure.”
Extended Stay said it plans to continue operating under a lender-approved arrangement using cash collateral. Debtor-in-possession financing won’t be needed, the company says.
If motels are closing down, we are in more trouble then we thought. I thought Omoron said things were getting better. What happened? Oh, I get it, more Bu—S—t.
Motels, restaraunts, farmers, this ball is starting to gather speed..... The 10% unemployment rate and higher gasoline prices aren’t helping. The supposed stimulus went into the bankers pockets never to be seen again. It’s pathetic.
Bail ‘em out!
As one who does travel the roads fairly frequently, I've noticed this. Frankly, it is much more pleasurable to travel by car when the traffic isn't in a constant "rolling roadblock" mode.
I haven't traveled on company business since last December. That was 3 days in the DC area. Prior to that, it was two weeks in Northern VA last June. Travel budgets are cut to the bone. It only happens when absolutely necessary.
I agree 100%!!! No accountability. Where did the money go? I'm sure a bunch of Omoron's buddies opened up secret bank accounts in the Caribbean. They "rope-a-doped" the "white folk" real good. The sky is falling!! The sky is falling!! "Look over there, see, look, its a bird!!" While billions of $$$ disappear into vapor. The biggest scam in history!
The one bright spot in town is the restaurants. They are full and doing just fine. The local Applebee's had a huge fire. It took 60 days to gut and rebuild the restaurant. Applebee's was happy to do it as they always have a full house.
It's tourist season, so the local hotels are busy with folks passing through on the way to Yellowstone National Park. Pocatello is favorably located at the intersection of I-86 and I-15. It's a great spot to run a hotel or restaurant.
Be careful, don’t tell that California story to anyone who knows your name. CA will try to tax for ANY work and subsequent pay earned while in that state (if they find out about it). It doesn’t matter where you stayed or where the employer is located. They will try to chase the money down even if it’s out of state. I recently cleared up a 2-year-long attempt by CA to collect taxes on what they thought were employees working there. What a bunch of boobs in Sacramento.
Theeere is your "change"... (and hope)
We ain't seen notin yet, this socialist craphope is just starting to snowball!
God help us!
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