Extended Stay returns from Chapter 11

Bankrupt hotel change Extended Stay is to re-enter business after securing US$400m in a further sign of a recovery in the hotel real estate market. Investment firms Centerbridge Partners and Paulson & Co have agreed to invest in the long-stay specialist, although the project will need court approval.

Extended Stay, which has operations in many major US cityies, filed for Chapter 11 bankruptcy protection in June last June. It was caught in the thick of the U.S. subprime collapse, taking on some $4.1bn in complex mortgage-back securities when it was acquired in 2007, at the height of the market.

The biggest creditors include Centerbridge and Cerberus, according to court filings.

“These structures are complex beyond the ability of only the most sophisticated among us to truly understand,” the court said.