* Extended Stay lender falls 22 pct on NYSE

* Analysts expect more hotel defaults in future

* Firm may end up in hands of Cerberus, Centerbridge - FT (Adds details from hearing, paragraphs 11-15, details on Cerberus, Fortress, Centerbridge, in paragraphs 6-7)

By Deepa Seetharaman and Tom Hals

NEW YORK, June 16 (Reuters) - Initial signs point to a long, drawn-out battle in bankruptcy court for Extended Stay Hotels, the 680-property hotel chain bought in 2007 for $8 billion by a firm little known to the industry at the time.

Extended Stay won interim court approval on Tuesday to use cash against which creditors have a claim. The company said its management company, HVM LLC, would only have about $4 million by the end of Tuesday and the cash was needed to keep it operating.

Several parties objected to the request, which initially ran more than 30 pages and was described by Judge James Peck as a "monstrosity." Peck approved a simplified version and asked the parties to return to court by the end of the month to take up the issue again.

"This is going to be a mess," said Mitesh Shah, chief executive of Noble Investment Group, a private equity firm that invests in hotels. "You've got a lot of lenders, a lot of people who have already taken steep discounts."

Shares in one of Extended Stay's lenders, Ashford Hospitality Trust Inc (AHT.N: Quote, Profile, Research), dropped 22 percent on the New York Stock Exchange. The real estate investment trust owns a $164 million note in a tranche of Extended Stay's mezzanine debt. [ID:nN16388554]