>> WESTERN USA TIMESHARE NEWS
LAS VEGAS: Earlier this month I told you about a new resort on the Big Island of Hawaii that Diamond Resorts is planning to build in conjunction with Och-Ziff Real Estate. “Planning” is the operative word there, as it is still subject to various conditions, permitting, etc.
So here’s something more concrete in DRI’s getting-BIGGER world: The company is in the process of acquiring Virginia’s Gold Key Resorts $167.5 million, which will add 6 new resorts to Diamond’s portfolio. So what exactly will Diamond be getting for the money? In short, according to the 8K document filed with the SEC:
On August 14, 2015, Diamond Resorts Corporation (“DRC”), a wholly-owned subsidiary of Diamond Resorts International, Inc. (the “Company”), entered into an Asset Purchase Agreement with Ocean Beach Club, LLC, Gold Key Resorts, LLC, Professional Hospitality Resources, Inc., Vacation Rentals, LLC and Resort Promotions, Inc. (collectively, the “Gold Key Companies”). The Gold Key Companies manage vacation ownership resorts in Virginia Beach, VA and the Outer Banks, NC. Pursuant to the Asset Purchase Agreement, DRC has agreed to acquire substantially all of the assets of the Gold Key Companies relating to their operation of their vacation ownership business in exchange for approximately $167.5 million, subject to adjustment in accordance with the terms of the Asset Purchase Agreement. An aggregate of $5 million of the purchase price will be deposited into an escrow account and held by an escrow agent to secure the obligations of the Gold Key Companies under the Asset Purchase Agreement. The acquisition is expected to close in the fourth quarter of 2015.
Upon the closing of the acquisition contemplated by the Asset Purchase Agreement, which is subject to customary closing conditions, DRC will acquire management contracts, real property interests, unsold vacation ownership interests and other assets of the Gold Key Companies, adding six additional managed resorts to the Company’s resort network. The Asset Purchase Agreement includes customary representations, warranties and covenants by the respective parties, including, among others, indemnification covenants and a covenant restricting the Gold Key Companies from entertaining, soliciting or encouraging any alternative acquisition proposals.
The purchase includes the Beach Quarters Resort, Turtle Cay Resort, Boardwalk Resort and Villas, Ocean Beach Club and Oceanaire Resort Hotel, all in Virginia Beach, as well as Gold Key’s recently purchased Barrier Island Station resort in Kitty Hawk, North Carolina (renamed Beachwoods) which is under renovation.
Of course this purchase makes DRI the predominant vacation ownership player in the Hampton Roads area, not a bad place to be.
What is NOT included in the sale are parent company Gold Key | PHR’s historic Cavalier Hotel, the company’s two Hilton hotels at the Oceanfront or its interests in The Main, a downtown Norfolk hotel under construction. Gold Key | PHR’s CEO Bruce Thompson intends to use funds from the sale of the timeshare properties to continue developing new projects in Hampton Roads and the East Coast. That might be interesting to watch.
For those of you interested in the legal side of things, Katten Muchin Rosenman LLP and Ballard Spahr LLP represented Diamond Resorts in its purchase and BakerHostetler worked as counsel to Gold Key.
Do you suppose DRI has any other company in its sights to be absorbed into the Body? Or are they done for the time being?
ALSO IN LAS VEGAS: James Assi Jariv, who was recently sentenced to 10 years in prison on timeshare resale telemarketing scam charges in Texas, has now been sentenced to an additional 10 years for biofuel fraud in Nevada.
James was sentenced for his role in illegal schemes to generate fraudulent biodiesel credits and to export biodiesel without providing biodiesel credits to the United States. Jariv was also ordered to make restitution in the amount of $6,345,830.91 and to forfeit between $4 to $6 million in cash and other assets. For details of the crimes he committed, click here.
Meanwhile, James Jariv’s 28-year-old son Alexander has also pleaded guilty to charges in the biofuels case. Originally his sentencing was set for August 18, 2015, but that date has been pushed back. The reason for that postponement is that Alexander is set to be sentenced in the Texas resale fraud case on Sept. 14 and the Nevada prosecution agreed to wait for that sentence to be handed down before receiving his sentence in Las Vegas.
All of the remaining defendants in that resale fraud case are to be sentenced at the same time and the date for all of them is 9/14/2015 at 01:30 PM in Courtroom 11C before Judge Lynn N. Hughes. To be sentenced on that date are: Alexander Jariv, Leon Avedikian, Thresa Lloyd, Michael Derek Muise and Ronald Frank Muise (aka William Blair, Anthony Sabella, John Conti, Anthony Russo and Brian Chambers).
Therefore, we can look forward to two sentencing dates for Alexander in September: The first in Houston on Sept. 14 and the second in Las Vegas sometime during the week of September 21-25, 2015.
What I wonder about is this: Will the Jariv father and son serve their sentences consecutively or concurrently? In other words, will James serve his 10 years for resale fraud and then serve his 10 years for biofuels fraud, for a total of 20 years in the slammer? Or will it eventually work out to a total of 10 years with both sentences being served at the same time? Keeping in mind that James is 64 years old, either way could amount to a life sentence for him.
Inquiring minds want to know.
“If you haven’t got anything nice to say about anybody, come sit next to me.” –Alice Roosevelt Longworth
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