Hospitality Staffing Solutions Group LLC, which provides housekeeping personnel for hotels, filed for chapter 11 bankruptcy yesterday, three years after being acquired by private equity firm Frontenac Co., Reuters reported yesterday. The company said that it plans to conduct a court-supervised auction of its business. After Hospitality Staffing was acquired for $80 million in 2010, it discovered problems with employee verification and other operational issues. The company was squeezed by a combination of the cost of correcting those problems, a sluggish economic recovery and increased competition, according to documents filed in the U.S. Bankruptcy Court in Wilmington, Del. In April, the company defaulted on its secured credit facility. Hospitality Staffing, which calls itself the largest U.S. provider of housekeeping staff for hotels, has about $60 million in secured, unsecured and trade debt. The company is seeking court approval to borrow $7 million to fund its business until the auction is completed, which is expected by the end of the year. At least nine Hospital Staffing affiliates have also filed for bankruptcy. The case is HSS Holding LLC, U.S. Bankruptcy Court, District of Delaware, No. 13-12740.
