A pair of Steamboat Springs timeshare resorts are among a half dozen properties nationwide that were purchased out of bankruptcy liquidation Friday by an Orlando, Fla.-based company, Celebrity Resorts, for undisclosed millions.
The two properties are the 77-suite Leisure Resorts Hilltop and the 60-suite Leisure Resorts Steamboat on Pine Grove Road.
Celebrity Resorts acquired the Steamboat properties as well as developments in Honolulu; Reno, Nev.; Brigantine Beach, N.J.; and Indian Shores, Fla.; from Leisure Resorts Industries. Leisure Resorts filed for Chapter 11 bankruptcy in July and has been seeking to liquidate its assets under the supervision of court-appointed trustee C. Alan Bentley.
The "multi-million dollar" purchase effectively triples the size of Celebrity, and includes unsold timeshare intervals, a mortgage portfolio and management contracts at each property as well as Leisure Resorts' assets and rights in the properties.
The closing, scheduled for this month, will take place with Textron Financial Corp., which provided $8 million in financing to help keep the resorts operating.
Celebrity Resorts is owned by Neil Meyers. His son, Jared Meyers, is the company's CEO. A release prepared by Jared Meyers indicates the company is anticipating more expansion in the future.
He said his company would provide $5 million to help alleviate financial concerns of the homeowner associations at the various resorts.
The two Steamboat properties are the largest additions to Celebrity resorts' portfolio, according to Meyers. Prior to the purchase, Celebrity Resorts properties were located in Orlando, Fla., Lake Buena Vista, Fla., and Palm Coast, Fla.
The acquisition will expand Celebrity's base of timeshare owners to 50,000 and add nearly 150 employees. Meyers pledged that no current employees will lose their jobs as a result of the transaction.
Documents filed with the Securities and Exchange Commission by Mego Financial Corp., parent of Leisure Industries, reflect that lagging sales across its numerous subsidiaries, as well as the number of customers abandoning their timeshare vacation contracts, sapped the company's ability to operate. Leisure Industries arranged financing for many of its timeshare purchasers and used its consumer contracts to underwrite lines of credit that were its source of operating funds. As vacation owners walked away from their mortgages, the company lost cash flow.
The company had not kept up to date with quarterly earnings reports, however a year-old report indicates the two properties in Steamboat accounted for more than 40 percent of the company's 10,100 timeshare intervals. At Steamboat Hilltop, 1,305, or 45.7 percent, of 2,856 intervals remained unsold. At Steamboat Suites, 814, or 26.6 percent, of 3,060 intervals were unsold. Throughout the company, an average of 12 percent of all intervals were unsold at the time of the earnings report.
The unsold inventory is among the assets acquired by Celebrity. However, Leisure Industries' local sales offices were closed last summer.
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