June 23, 2009

Red Ink for Red Roof

First, it was Extended Stay.

Now, we learn that Red Roof inn has defaulted on $367,000,000 of mortgage debt.

Red Roof filed Chapter 11 Bankruptcy protection on June 15th.

They currently carry about $1,200,000,000 in debt (OUCH!).

Once again, we are reminded of Howard Marks' classic business and finance formula:

Leverage + Volatility = Dynamite


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