Las Vegas, NV, and Phoenix, AZ, January 21, 2010 — On Thursday January 7, 2010 ILX Resorts Inc. stipulated to terms in the U.S. Bankruptcy Court, subject to a contingency period which expired at the close of business on January 12, 2010, which provide that it will file a joint plan of reorganization with its largest creditor, Textron Financial Corporation. ILX owes Textron $29 million in loans.
If the plan is approved, ILX will sell the majority of its assets to Diamond Resorts Corporation. The parties expect to file with the bankruptcy court the joint plan of reorganization containing the details of the proposed transaction in the near future.
A Current Report (Form 8-K) was filed with the SEC to that effect by ILX president Nancy Stone on January 13.
Diamond Resorts’ offer includes a $100,000 deposit and a promise to pay off ILX’s debts of $34.5 million. In exchange, Diamond would assume control of all of ILX’s assets, which include its resorts; its real estate holdings (which includes 2.1 acres in Puerto Penasco, MX); all its sales and marketing centers; physical property such as equipment, company vehicles, furniture, etc.; and resort management contracts.
Diamond Resorts would also assume any mortgage loans and gain ownership of the Heart of Sedona, a 14-acre parcel owned by ILX-Bruno LLC; but the agreement states that Diamond reserves the right not to purchase that land if they so decide.
ILX has eight resorts in Arizona and one each in Indiana, Colorado and San Carlos, Mexico. Sites in Puerto Peñasco, Mexico and Sedona, AZ are in the final planning stages, and the company was actively selling at the Puerto Peñasco site prior to the bankruptcy filing. Through its Premiere Vacation Club the company has also acquired inventory at the Carriage House in Las Vegas and Scottsdale Camelback Resort in Scottsdale, AZ.
Phoenix, AZ-based ILX filed for Chapter 11 bankruptcy (reorganization protection) in March, 2009, citing “Dramatic challenges in the economy and recent unanticipated reductions in our credit facilities caused by disruption and instability in the capital markets” as the cause. The filing involves the Phoenix company and certain of its subsidiaries and limited liability companies.
Las Vegas, NV-based Diamond Resorts International is one of the largest vacation ownership companies in the world with more than 160 branded and affiliated resorts and over 24,000 guest beds in 26 countries with destinations throughout the continental United States and Hawaii, Canada, Mexico, the Caribbean, Europe, Asia, Australia and Africa.
The SEC’s decision is expected within the next month.