economy:

Hotel chain with four Vegas locations files for bankruptcy

Published Monday, June 15, 2009 | 9:41 a.m.

Updated Monday, June 15, 2009 | 2:59 p.m.

Sun business and economy coverage

Extended Stay Hotels, a national chain with four hotels in the Las Vegas area, filed for bankruptcy protection today in New York to restructure debt and said its properties will remain open.

Extended Stay has 680 properties in 44 states and in Canada.

The bankruptcy filing listed $7.1 billion in assets and $7.6 billion in debt at the end of 2008, and said the company needed protection from creditors because of decreased revenue and high debt costs, Bloomberg News reported.

In Las Vegas, the company markets two properties under the Extended Stay America brand, one under the Homestead Studio Suites brand and a fourth under the Extended Stay Deluxe brand.

Extended Stay was acquired in 2007 by Lightstone Group LLC.

This month, two investors who put $214 million into that deal filed suit alleging senior lenders have schemed to wipe out their minority investments in the highly leveraged transaction.

Extended Stay defaulted on its debt obligations and prior to the bankruptcy was in talks with the senior lenders on restructuring its debt.

Extended Stay owner HVM L.L.C. of Spartanburg, S.C., said the Chapter 11 filing should have no impact on operations of the hotels.

"Extended Stay Inc. has turned an important page in restructuring its debt and recapitalizing its business," Gary DeLapp, president and CEO of HVM L.L.C., said in a statement.

"All hotels are open and welcoming guests as usual," DeLapp said.

DeLapp said that there are no plans to either close or sell any of the hotels, and he expects that hotel employees -- approximately 15 at each location -- and HVM's corporate staff will continue to be paid and receive benefits as usual. He said HVM intends to meet all of its obligations in the ordinary course of business and pay vendors without interruption.

"We have the broadest distribution of any extended stay company by far," DeLapp said: "We are Number One in our category and intend to remain that way."

Discussion: 5 comments so far…

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By davidwayneosedach

June 15, 2009

10:06 a.m.

Suggest removal

Unfortunately during this worsening recession there is not much demand for extended stays. People are just staying over less on their Las Vegas visits.
By neiman1

June 15, 2009

10:41 a.m.

Suggest removal

When city center is finished and all those construction workers are laid off the extended stays will be empty.
By OG

June 15, 2009

10:54 a.m.

Suggest removal

Too Bad. ESA provided quality accomodation (eith a kitchentte) at Motel-6 prices; if you got one in a decent neighborhood you could stay there for a decent length of time and be ok.

Debts barely more than assets, but creditors are ravenous...especially now...
By stevem

June 15, 2009

11:52 a.m.

Suggest removal

the construction workers aren't staying in extended stays.

they'll rent a house for 6 months or a year.

extended stays are for people staying here for a month or less usually.

either way...

i do agree ( amazingly ) with nieman1 that as soon as city center gets done, the local economy of this town is going to collapse.

all those guys are going to have to leave town to find work.

nobody is in any rush to get fountainblew or echelon going again.
By logic_should_rule

June 15, 2009

3:11 p.m.

Suggest removal

600+ locations and just 4 here. You can't compare the local situation to the rest of the country.

Very likely that the problems come from a bad timed buyout. They will restructure and be ok.