BREAKING: Celebrity Resorts, LLC Files for Chapter 11 Bankruptcy
BREAKING NEWS: ORLANDO, FL (March 9, 2010) — On Friday, March 5, 2010, Celebrity Resorts, LLC and 35 affiliates voluntarily filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court in Orlando, Florida. Celebrity Resorts was founded in 2003 and the group of debtors own and operate 13 vacation timeshare resorts in Colorado, Florida, Hawaii, New Jersey, Nevada, and Pennsylvania.
In their bankruptcy pleadings, the companies blamed their bankruptcies on three primary factors:
- 1. General economic factors, which resulted in an “unprecedented decrease in revenues” for the timeshare industry beginning in September 2008.
2. Disagreements between members of the Meyers family who control the debtors regarding the companies’ business model, which resulted in the termination of two family members – Neil Meyers (the father) and Steve Meyers (a son and the debtors’ general counsel) and a lawsuit by Neil Meyers against several of the companies. A second son, Jared Meyers, remains as the chief executive officer of all of the debtors.
3. The declaration of a default on a loan owing to Textron Financial Corporation.
The companies also reported that they have approximately $12 million in unsecured debt and $23 million in secured debt. The companies are represented by Latham, Shuker, Eden & Beaudine, LLP.
There is a great deal more information available in the case filing, which you can download or view in PDF format by clicking here.
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How will this action affect timeshare holders? Should we have legal representation? Will we suffer financial consequences? Please advise.
g.vargas
If this follows the path of other bankruptcies (and there’s no reason to assume it won’t), then timeshare owners shouldn’t have too much to worry about. The resorts continue to operate while Celebrity works its way through reorganization. Depending on the final outcome, Celebrity will either come out the back end with the same developer in charge or some or all of the “assets” will be sold to some other developer/resort company. Either way, you will still have ownership rights/access to the resorts.
You may remember that Celebrity itself began its expansion by buying the timeshare assets of Leisure Industries via a bankruptcy proceeding, and there are other examples of this too. Diamond Resorts bought Sunterra’s assets and just recently did the same with ILX Resorts. Consolidated Resorts, on the other hand, recently came out of bankruptcy with the original developer in charge.
Bottom line: Bankruptcy courts generally place great emphasis on protecting the rights of the owners/members. Keep an eye on what’s happening, but don’t worry too much. At least, not yet.