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NEW YORK, N.Y.—April 26, 2010 (BUSINESS WIRE)—Extended
Stay Inc. said that it has received Bankruptcy Court approval of
bidding procedures that will govern an auction to select an investor to
sponsor its proposed plan of reorganization. The company is moving
forward with the auction process, pursuant to which bids are due on May
17. The auction will take place on May 27.
“The Court’s decision to approve the bidding procedures will enable
Extended Stay to maximize value for the benefit of the Debtors’
estates,” said Ari Lefkovits of Lazard Freres & Co., L.L.C., the
company’s financial advisor. “The auction will facilitate the
competitive process already underway and be open to any qualified
party, with the goal of developing a plan of reorganization that
provides the Debtors’ estates with the greatest recovery. Moreover, it
will establish a transparent process by which the company can select a
plan sponsor and emerge from bankruptcy expeditiously.”
Gary DeLapp, the chief executive officer of HVM L.L.C., which manages
the business, added, “We are looking forward to working with all
potential plan sponsors and intend to provide assistance to all
interested parties so that the highest value can be realized.”
On April 2, 2010, Extended Stay executed a commitment letter with
Centerbridge Partners LP and Paulson & Co. Inc. to sponsor and fund
a plan of reorganization. Extended Stay is soliciting competing
proposals that provide greater value than the current offer.
According to the approved bidding procedures, those wishing to
participate in the auction must submit a binding and committed proposal
in writing to Lazard, along with a $150 million deposit on or before
May 17, 2010, at 3:00 p.m. (Eastern Time).
An auction will be held May 27 at the offices of Weil, Gotshal &
Manges LLP in Manhattan to consider the proposals and select the
successful bid.
DeLapp said that while operations at Extended Stay’s 666 hotel
properties have continued without interruption throughout the
restructuring and sale process, HVM L.L.C. looks forward to the debtors
finalizing the terms of their plan of reorganization.
Extended Stay Inc. and its affiliates filed voluntary petitions under
Chapter 11 of the Bankruptcy Code on June 15, 2009, in U.S. Bankruptcy
Court for the Southern District of New York in Manhattan.
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