# Sunterra told to sell



## timeos2 (Jul 16, 2006)

This  article from the Las Vegas Review-Journal doesn't seem to be very positive news regarding the future of Sunterra as a stand alone company.


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## T_R_Oglodyte (Jul 16, 2006)

timeos2 said:
			
		

> This  article from the Las Vegas Review-Journal doesn't seem to be very positive news regarding the future of Sunterra as a stand alone company.


Yessireee - that Sunterra name is sure adding a lot more cachet to those formerly Embassy resorts!

Here's hoping that Hilton decides to get involved again.  Hilton could reattach the Embassy name to those former resorts, and create a lower level product with most of the other Sunterra inventory.  Then tie the whole thing into Hilton HHonors.

I suspect, though, that Radisson is a more likely bidder than Hilton.


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## dougp26364 (Jul 16, 2006)

T_R_Oglodyte said:
			
		

> Yessireee - that Sunterra name is sure adding a lot more cachet to those formerly Embassy resorts!
> 
> Here's hoping that Hilton decides to get involved again.  Hilton could reattach the Embassy name to those former resorts, and create a lower level product with most of the other Sunterra inventory.  Then tie the whole thing into Hilton HHonors.
> 
> I suspect, though, that Radisson is a more likely bidder than Hilton.



I'm thinking Bluegreen myself. Bluegreen has a mix of quality in it's resorts similar to Sunterra. I think they could slide Sunterra's point system and internal exchange system into their group of resorts with relative ease and actually enhance Sunterra owners ownership.

I can't see a major hotel chain taking on the shambles of this mess. While some of Sunterra's properties are decent, others aren't so great. A major hotel chain would have to take on upgrading some resorts while selling of other resorts. I can just see the mess this would cause with disgruntled owners who were promised the moon by Sunterra salesman and now have to deal with running their own, non five star resort without any internal exchange privledges. That would be a mess that, as a CEO of a major hotel chain I wouldn't want any part of.

If the company is sold off piecemeal, then I can see some of the major hotel chains trying to cherry pick some of the better resorts with good location from the lot. Sunterra might get a better return on the dollar if that happens but owners are going to suffer.

I wonder what will happen to those who have purchased units in the trust that Sunterra was pushing rather than deeded units. Oh yea, this could be a HUGE mess for Sunterra owners.


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## riverdees05 (Jul 16, 2006)

We own two weeks (deeded) at Lake Tahoe.  One week we can reserve two out and the other one week out.  If they decide to sell, We are hoping for a good buyer.


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## timeos2 (Jul 16, 2006)

Remember that any sale really impacts owners in only a few possible ways.

- If you own a week at a Sunterra resort what is the status of sales? Is it in active sales or basically sold out? The only thing that can be sold to a new buyer is the unsold inventory and maybe a sales center operation. They have no control over the individual owners purchased weeks.

- If you are a Club Sunterra member you have a little more exposure. Those who bought a while back still hold the deed to their unit/week so whats at risk is the amount paid to join club and any options unused in it. You could always drop out by simply not paying your next round of annual fees but then you would lose whatever your original fee to join may have been. If it's been long enough or if you didn't pay that much to join that may not be a big deal.  Those who have purchased the newer RTU style time and/or the newer club that is Trust based gave up their deed. So whatever direction the Trust goes in - meaning who buys it - will have a real impact on those owners as well as those in the older Club who decide to stay.  

- Management of the resort. A few, not that many anymore, of the Sunterra resorts are also managed by their resort management arm - RPM (if thats still their name).  Two I know of are Greensprings and Powatan in Williamsburg. Depending on how the management agreements are worded they may be able to sell those rights to a new company without owner approval.  These resorts  and owners are the most likely to feel the pinch. If you happen to fall in two or more of these categories you may also want to keep a careful eye as to where this all goes. 

If a sale occurs, and it is by no means a sure thing, this is a very large group of owners and resorts that will have to deal with the fallout.


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## bobcat (Jul 16, 2006)

timeos2 said:
			
		

> This  article from the Las Vegas Review-Journal doesn't seem to be very positive news regarding the future of Sunterra as a stand alone company.


Sunterra  If you purchased your T S in the time frame the stock class action is filed for, why not call the Attoney Generals office of the state you purcahsed?  they may be able to help? I am sure Sunterra does not want t s ownersto do this. This would add more heat to them. But,, you purchased under false reporting of Co.  Bobcat


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## T_R_Oglodyte (Jul 16, 2006)

All of the formerly Embassy resorts are managed by Sunterra.  I checled the latest version of the Disclosure Statement for Po`ipu, and it is silent about assignability of the management contract.

****

I mentioned Radisson above because Radisson and Sunterra have been dancing together for years.  Even the stock ticker symbol for Sunterra, SNRR, was selected with Radisson in mind - the ""RR" was to represent Radisson Resorts.  The combined entity was going to be named "Sunterra Radisson Resorts".

See, for example, the following TS Beat links (you may need to scroll down on the page to find the references to Sunterra and Radisson:

http://www.thetimesharebeat.com/street/feb21-03.htm
http://www.thetimesharebeat.com/street/dec20-02.htm
http://www.thetimesharebeat.com/street/jan24-03.htm
http://www.thetimesharebeat.com/street/nov22-02.htm
http://www.thetimesharebeat.com/street/aug02-02.htm

*******

Folks may also remember that several years ago there were also serious discussions with HIlton about Hilton acquiring the Embassy Vacation Resorts from Sunterra.  As I understand, the deal broke down over the price to be paid for the Ka`anapali property on Maui.  The two parties could not agree on the amount of renovation needed to bring the property  up to Hilton standards.

These events suggest that Sunterra may have overplayed their hand in those negotiations.  If they had sold the properties to HIlton, they may have been able to use the proceeds to extricate themselves from some of this mess.


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## jlfernandez5 (Jul 18, 2006)

What about Fairfield/Cendent? They seem to like to buy distressed properties or  other Resort chains and add them to their group. It would seem that the Sunterra properties would fit nicely with their expansion plans.


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## TimeshareTraveller (Jul 18, 2006)

Not all of the old Embassy resorts are owned by Sunterra.  There's one in Myrtle Beach that is owned by Starwood now.  I think only the two Embassy properties in Hawaii went to Sunterra:  Embassy at Poipu Point in Kauaii and Embassay Ka'anapali [sic] in Maui.  

When Embassy broke up and the pieces were sold, our family lost the ability to trade internally in the 6 resorts.  We had traded for both Hawaii units at one point.  Had Embassy been picked up by a decent hotel chain, I think it would have survived better.  I'm noticing lately that Poipu Point has a couple of "new" offspring resorts that look like Sunterra sold a set of rooms there to a private buyer.  Poipu Point Resort is what I'm referring to.  Unless Sunterra just decided to knock the Embassy off the name at last.  The quality of that one has really deteriorated since Sunterra got it.  

I'm not sure if Radisson is in any better financial shape than Sunterra.  I don't know if they could afford to buy the Sunterra properties.  Fairfield/Cendant --well, haven't ya'll noticed that they tend to lowball every offer.  I think the incestous relationship between RCI and Fairfield has allowed Fairfield to target with unerring precision resorts that have good locations, but have financial issues.  They scoop up the resort, patch it up a bit on the surface, and re-sell it to new customers.  (Sands Resort in Myrtle Beach, for example, was this lonely scary little resort before the Fairfield purchase.)

Hilton would be a buyer for Poipu Point if it hasn't run completely into the ground.  Maui's units are all one bedroom and in a tower that is not really near the ocean.  It would need major renovation to make it Hilton quality.  However, given the mess that's going to be left with Sunterra owners, I don't know if any decent resort group will want to touch it.  I see assessments ahead for every resort.  

This is a real mess.  It could rebound on the entire timeshare industry given that it looks like we're in for an economic slowdown.  Slowdowns usually mean less income going to luxuries like travel.

--TimeshareTraveller


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## Carolinian (Jul 19, 2006)

When you think of a sale, think of the Peppertree-Equivest example.  Fairfield bought their resorts and took over running their points program.  The points program was NOT merged with Fairfield's or the members even given a conversion opportunity.  No new points were sold, so the program has been in decline ever since, with sinking membership and Fairfield gradually selling off supporting inventory.

More likely (because it would be more profitable) is that they would offer an ''upgrade'' to a new points system for a price of a few thousand dollars.  Then owners would have a choice of buying their timeshare all over again by paying for this ''upgrade'' or being stuck in a declining orphan points program, like Peppertree-Equivest.  This pay-through-the-nose option to ''upgrade'' is what is being suggested as the likely outcome of a Club La Costa purchase of Sunterra Europe.  At least, with Sunterra Europe, a majority of owners are still weeks based, so they can easily escape the trap of an orphan points program.  I have not seen the numbers of such owners for the US part of the operation.


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## pgnewarkboy (Jul 24, 2006)

Sunterra resorts are quality resorts.  If sold, they should get a good buyer.


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## PA- (Jul 24, 2006)

pgnewarkboy said:
			
		

> Sunterra resorts are quality resorts.  If sold, they should get a good buyer.




As mentioned above, all that Sunterra can sell is whatever unsold inventory they own.  At some of the newer resorts, perhaps it's a significant amount, I don't know.  At most or all of the resorts more than 5 years old, they probably don't own much inventory.

Might be a good pickup, at the right price, for a multi-resort chain to purchase, so they can get the Sunterra owner's list and try to convert them to that mini-chains system (at a cost, of course).

But any buyer would probably pay less than ebay prices for the unsold inventory, since they are buying them all at once.


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## Robnsunny (Jul 24, 2006)

Approved development rights and access to existing owners can be more important to the purchasing company than unsold inventory. 

A Wyndham (Fairfield/Trendwest) purchase would probably let the existing point system die on the vine like they have with Equivest. Wyndham needs resorts in Europe and they might be interested in Sunterra Europe. I don't think the US resorts would be a good match for them, particularly in light of the Pahio purchase.


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## T_R_Oglodyte (Jul 24, 2006)

PA- said:
			
		

> At most or all of the resorts more than 5 years old, they probably don't own much inventory.


At Ka`anapali, as timeshare inventory was sold out, the partnership group that owns the resort would simply convert another floor of the hotel to timeshares to  create more inventory.

It wouldn't make sense for them to drop the Embassy name in favor of Sunterra if the ownership goup intended to operate a combined hotel/timeshare operation.  So I assume Sunterra's plans were to convert the entire Ka`anapali facility to timeshare.  

But if a hotel chain were to pick up the assets, I can easily see where the acquirer might want to maintain an on-site hotel operation.


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## PA- (Jul 24, 2006)

why would that fund manager buy an 8.4% stake of Sunterra, given that he believes their management to be so poor?  Isn't part of what you pay a fund manager for to make sure the companies he invests in are solid?


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## Rent_Share (Jul 26, 2006)

*Lake Tahoe Property*

Toured the lake tahoe property, last tour was Kannapali 4 years ago.

*Wife said never again !!!!!!!!* 

(fortunately I negotiated 2 future nights + the $ 100 spiff, should have gone for instant gratifcation) Let's see if we are ever able to use the two free nights​
Sales manager couldn't understand why I couldn't see the value of buying 10,500 sunpoints @ $ 30,000 + approximately $ 1,050 in taxes, maintenance and SunPoints annual fees.

No reason for me to wait and research what was going on regarding Sunterra before executing a contract  . . . . .



Any thoughts on my decision not to jump ?????


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## bobcat (Jul 26, 2006)

*Re: Lake Tahoe Property*



			
				Rent_Share said:
			
		

> Toured the lake tahoe property, last tour was Kannapali 4 years ago.
> 
> *Wife said never again !!!!!!!!*
> 
> ...


You made the right move.The price was very  high. Also Sunterra  still does not know what is going to happen to the Co.


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## pedro47 (Jul 27, 2006)

On July 27, 2007 Sunterra Board of Directors dismissed chief executive officer Nicholas Benson after after an accounting investigation.

Benson had been on paid administrative leave, pending the outcome of a previously announced investigation into alleged accounting improprietes in the company's unit in Spain.

The board also said it intend to ask the former CEO to reimburse the company for all bonus, incentives, or equity-based compensation he had received since 2002.  This is information was reported by REUTERS this morning.


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## Spence (Aug 18, 2006)

*Somebody must know something!*

Sunterra "market perform," target price raised

Wednesday, August 16, 2006 2:38:18 AM ET
JMP Securities

NEW YORK, August 16 (newratings.com) - In a research note published yesterday, analysts at JMP Securities reiterate their "market perform" rating on Sunterra (SNRR.NAS). The target price has been raised from $12 to $15.


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## lv_maui (Aug 24, 2006)

T_R_Oglodyte said:
			
		

> Folks may also remember that several years ago there were also serious discussions with HIlton about Hilton acquiring the Embassy Vacation Resorts from Sunterra.  As I understand, the deal broke down over the price to be paid for the Ka`anapali property on Maui.  The two parties could not agree on the amount of renovation needed to bring the property  up to Hilton standards.
> 
> These events suggest that Sunterra may have overplayed their hand in those negotiations.  If they had sold the properties to HIlton, they may have been able to use the proceeds to extricate themselves from some of this mess.



Steve, I am sorry but you are not correct.  First, Hilton never made any offer or letter of intent about the Poipu Resort.  Not at all.  Second, the reason that Kaanapali was not completed by Hilton was because of bad timing.  9/11 hit and Hilton had a temporary cash freeze on large purchases.  They wanted to pay the Goldman/Sunterra partnership with other than cash and made the deal too complicated.  

Sunterra bought out their partners in both Poipu and Kaanapali due to the EXTREME profit and cashflow coming from these sales centers.  Selling them would have generated cash today but sacraficed the future.


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## pgnewarkboy (Aug 24, 2006)

*Any More news on Sunterra Appreciated*

LV Maui


I am an owner at Kanapalli and am, of course, worried about any changes that are in the works.  Any "inside" or outside information would be very welcome . 

Thanks,

Pgnewarkbou


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## Spence (Aug 24, 2006)

Rent_Share said:
			
		

> Sales manager couldn't understand why I couldn't see the value of buying 10,500 sunpoints @ $ 30,000 + approximately $ 1,050 in taxes, maintenance and SunPoints annual fees.
> No reason for me to wait and research what was going on regarding Sunterra before executing a contract  . . . . .
> Any thoughts on my decision not to jump ?????


Don't see why you didn't jump.  Maybe you know that my average price paid for 10,500 SunOptions is around $3139 with a MF of $545.  Resale is the way to go but you need a lot of points to make the resale entry fee negligible and then really work the system.


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## pedro47 (Aug 25, 2006)

Sunterra stock (SNRR)  closed today at $12.38 per share.


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## Carolinian (Aug 26, 2006)

The company is worth more if it is broken up and sold.  Since several of the largest shareholders are pushing that and the new board member is an advoate of that position, it would seem the market is sensing some money to be made when it happens.


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