Celebrity Resorts Emerges From Bankruptcy
January 4, 2011 — Orlando, FL-based Celebrity Resorts, LLC has successfully emerged from Chapter 11 bankruptcy, with the Middle Florida Bankruptcy Court confirming the Company’s reorganization plan on Dec. 28, 2010. As a result of the reorganization plan, Legacy Hospitality Holdings acquired all that was Celebrity.
The Plan leaves the company intact, with no job losses, and with Jared Meyers remaining in control.
According to court documents, the bankruptcies of Celebrity and 35 subsidiary companies stemmed from a ferocious family dispute regarding the ownership and control of the Celebrity Resorts enterprise. Dr. Neil Meyers contested the bankruptcy filings every step of the way, contending that he, not his eldest son Jared, owns and controls Celebrity. Dr. Meyers acquired the secured claim of one of Celebrity’s primary secured creditors, Farmington Bank, which generated significant litigation concerning the claim’s valuation and confirmation. His younger sons, Derek and Dylan Meyers, were also involved in the dispute.
In the end, after a two-day evidentiary hearing the Court held that Jared had ownership and control of the company on the petition date and therefore had the authority to file the bankruptcy petitions. The Court conducted a full day valuation hearing on the Farmington Bank claim and determined the claim’s value to be $4,942,241.51.
Celebrity (the “Debtors”) intends to return to Dr. Meyers the Farmington Bank timeshare inventory as “the indubitable equivalent of his Secured Claim”.
Even at the end, Dr. Meyers contested the procedures, maintaining that the Plan violates Section 1129(a)(3) of the Bankruptcy Code because there was no open bidding for the equity of the reorganized company. He asserted the Plan violated the absolute priority rule. However, the Court found otherwise since the Class 9 Creditors voted overwhelmingly in favor of the plan.
A lending subsidiary of Textron, Inc. has agreed to provide Celebrity with a $4 million forward-financing facility for the sales of timeshare units.
HISTORY OF CELEBRITY RESORTS AND THE MEYERS FAMILY
In the early 1980s Dr. Neil Meyers and his brother Hillel (Hillie) Meyers began developing timeshare properties in Florida. The oldest of Neil’s three sons, Jared, (born August 13, 1976) graduated from college in 1998 at age 21. At that time, he went to work for Neil and Hillel. Neil and Hillel subsequently had a falling out and partitioned their businesses in 2003.
That same year, Jared and First Continental Corporation formed thirteen new entities to successfully bid on and purchase certain timeshare assets from Leisure Industries, which was in bankruptcy (originally those assets belonged to Mego Financial Corp/Preferred Equities). These new entities were primarily owned by Jared and 2 trusts representing his brothers’ interests.
As a result, Celebrity Resorts owned or operated *6 timeshare resorts in Colorado, Florida, Hawaii, New Jersey and Nevada. Through 2008 Celebrity engaged in various acquisitions which increased the resort count and expanded its presence into Pennsylvania.
Since Celebrity’s inception, Jared has been the CEO and President of the Celebrity Entities and the Debtors-in-Possession. In that capacity, he ran the day-to-day operations.
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.
*NOTE: During the bankruptcy proceedings Celebrity sold certain of its rights at David Walley’s Hot Springs Resort & Spa back to Quintus Resorts. Certain of those rights were subsequently sold to Summer Winds Resort Services of Branson, MO. Otherwise, the Celebrity Resorts properties remain intact.
Copyright 2011 JAM Publishing/InsideTheGate.com All rights reserved
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This will not end here! Knowing all of the players in the deal , this is just the start of a saga of events to come// The Doc is a fighter and is not even close to going down for the count~~
Keep us posted!!