And the Real Winner is...

We called it to soon back in March. The Centerbridge/Paulson/Blackstone investor group swooped in to take Extended Stay out of bankruptcy, quashing the creditor-approved group led by Starwood. More details to come.

There was one bit of unintended humor highlighted in the WSJ report on the matter:

Judge James Peck of the U.S. Bankruptcy Court in Manhattan initially approved Extended Stay's Chapter 11 restructuring plan in July, calling it "perhaps an unprecedented bankruptcy" involving entities "never expected" to file for bankruptcy protection.

I think it's fair to say that a lot of people expected this deal to fail - it epitomizes the rise and fall of the CRE space and Hotels in particular. Blackstone put $3-$4 billion into buying it in 2005, then flipped it to Lightstone in a highly levered $8 billion transaction in 2007, and now they're taking it back.