Extended Stay Hotels, the operator of mid-priced hotels acquired at the peak of the commercial real estate market for $8 billion, filed for bankruptcy protection as the recession cut corporate and leisure travel.According to WSJ, the principal David Lichtenstein of Lightstone Group has only $200 million equity in the deal:
The Spartanburg, South Carolina-based chain, with more than 680 properties in 44 states, collapsed two years after Lightstone Group LLC purchased the company with $7.4 billion in financing. The company said it had $7.1 billion in assets and $7.6 billion in debts at the end of last year, according to papers filed today in U.S. Bankruptcy Court in New York.
David Lichtenstein, whose Lightstone Group LLC led the buyout group, appears to be surviving Extended Stay's meltdown relatively unscathed. Lightstone contributed only $200 million of equity and borrowed a chunk of that for the deal, according to people familiar with the matter.
Under the hotel chain's proposed restructuring plan, the 48-year-old Mr. Lichtenstein would avoid personal guarantees in the original loan agreement. He would also be kept on as manager of the 680-property hotel chain.