Extended Stay Hotels is a privately owned hotel brand that operates in the extended stay hotel market. The chain operates over 680 hotels with approximately 76,000 rooms across the United States and Canada. They cater to budget conscious travelers who are looking for value over elegance. David Lichtenstein acquired the chain in 2007 for eight billion dollars. This occurred at the peak of the real estate market and the first mortgage was estimated to be $4.1 billion dollars.
In June, it was announced that the company filed for bankruptcy projection. They proceeded by proposing a plan supported by creditors to enable them to get their money back. However, it would wipe out $4.8 billion in debt which would hurt most of the existing creditors.
Currently, the bankruptcy lawsuit is beginning. Ralph Mabey, an ex-bankruptcy judge was chosen by a New York Bankruptcy Court to investigate further into the acquisition of Extended Stay. Starwood Capital Group, another leader in the hotel industry is attempting to take control of Extended Stay Inc. They would buy Extended Stay’s $4.1 billion dollar first mortgage which was put into commercial mortgage-backed securities.