Extended Stay Emerges From Chapter 11 After Buyout
Extended Stay emerged from Chapter 11 bankruptcy protection, a few months after the hotel chain was bought by a group of investors led by private equity firm Centerbridge Partners.
The group, which includes Paulson & Co. and Blackstone Group, paid $3.925 billion in July for the owner of 685 properties bearing the brands Extended Stay America, Extended Stay Deluxe and Homestead Studio Suites in the U.S. and Canada.
The predecessor company, Extended Stay Hotels Inc., based in Spartanburg, S.C., filed for federal bankruptcy protection June 15, 2009. It blamed debt from its 2007 acquisition by the Lightstone Group and a sharp drop in business travel during the recession.
Extended Stay has reduced its debt by nearly $5 billion. All of the hotels remained open during the restructuring process, managed by HVM, a separately owned company. The management arrangement will continue.
The company plans "significant investment in major property improvements and renovations," now that it has emerged.
With the close of the transaction, Doug Geoga becomes non-executive chairman of Extended Stay. He was previously president of Global Hyatt. The board will also include Will Kussell, former president and chief brand officer of Dunkin' Donuts.