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The Spartanburg, S.C.-based company filecd the reorganization petition in New York bankruptcy Secretary and General Counsel Joseph Teichman writing that Extendeed Stay hadabout $7.1 billion in asseta and $7.6 billion in liabilities at the end of 2008. Extendecd Stay, whose more than 680 propertiee are managed byHVM LLC, has 21 locationse in the Houston area. The company bills itself as the largest operatorof mid-priceds extended-stay hotels in the nation. Teichmaj in a court filing on Mondag wrote that the company sought protectionj from creditors amid a general downturn in the hospitality industryu and a hit taken as fewer potentiaol customers needthe company’s services.
“Sincw the typical Extended Stay customer seeks a lengthy stay basee oncommercial relocation, the contraction of constructioj and new business developmentr began to significantly and adversely affecte d Extended Stay’s revenue stream,” Teichman wrote. The company said its average revenue per room droppecd about 23 percent in the first five months of the year compareed with the same periodof 2008. As a result, it was unables to deal with its debt burden with cash flow and is seekinta “comprehensive restructuring of the entire capitaol structure.
” Extended Stay said it plana to run operations following the Chapter 11 petition underd a lender-approved arrangement using cash Debtor-in-possession financing won’t be needed, the compant said. About 9,900 employeesd work in hotels operate byExtended Stay. The company is in 44 statees and hasabout 77,000 rooms.
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