Recent Destination Club News

[TarheelTraveler]

There are other clubs with "SUGAR DADDIES" looking to get bigger and if you can get "information", there are other things going on as well. I just think that the equity holders egos are so big that it most likely will not happen unless Capital Source forces the current equity holders hands.

The problem with a lot of these deals is the very different interests of the members and the equity holders. Management and the equity holders want, of course, to package the members and sell them to another club for the maximum price (often a less stable club desperate for cash flow-long term economics be d**mned), while members would love to have increased security and travel that they don't need to worry about. More often than not, those goals conflict.

 

[wilkes591]

The problem with a lot of these deals is the very different interests of the members and the equity holders. Management and the equity holders want, of course, to package the members and sell them to another club for the maximum price (often a less stable club desperate for cash flow-long term economics be d**mned), while members would love to have increased security and travel that they don't need to worry about. More often than not, those goals conflict.

Yes, lots of problems with a deal for UE, the good news is at least someone is looking. It is highly unlikely given the egos involved, however smart people do dumb things every day.

 

[ClubsRDead]

Well....

Yes, lots of problems with a deal for UE, the good news is at least someone is looking. It is highly unlikely given the egos involved, however smart people do dumb things every day.

Leave for a while and come back to this. Is anyone surprised? Jim's ego is as big as a mountain. Now there's a CRO involved? That means bankruptcy, right? So what happens to us now? Well - they try to shove us in a one size fits all scenario and we all lose. And Capital Source loses. Is anyone really shocked by this? Half of us are suing AK (unsuccessfully) and now we all have to sue Jim or walk away. This is likely a blessing for him because in short order he'd owe us our supposed redemption rights, which is higher for those of us that paid assessments and early dues renewals. So what have we learned here? I'm all for a member owned, member driven, member run club. Maybe we buy the houses from CS, or those we want, calculate our costs of operations (eliminating all the duplication, unnecessary costs and other BS) and do it ourselves. Or - look at ANY of the "competitor" web sites - we can pretty much join any club at any time for a dues only basis for a couple of years of travel. Knowing that, why give Jim any more of our money from this point forward??

 

[TarheelTraveler]

Ultimate Escapes

Destination Club News re: chief restructuring officer for Ultimate Escapes:

http://destinationclubnews.com/News...s_Chief_Restructuring_Officer_Sheon_Karol.php

"...has retained Sheon Karol from CRG Partners to serve as Chief Restructuring Officer as the club seeks to recover from a rather lean 2009 and 2010. According to the club's recent 10-Q filing outlining their first half of 2010, the club counted 1,214 members at the end of 2009. As of June 30, 2010, Ultimate Escapes had just 1,232 members. The document also stated that the club would take "steps to increase cash flow in order to cover 2010 operational expenses" and would be "monitoring and reducing operating expenses." Soon after their filing, Ultimate Escapes closed their Fort Collins branch and has now brought in Karol to help the club restructure.

Karol joined CRG Partners as a Partner in March of last year and has over 20 years of experience in the legal and executive world, with an emphasis on "out-of-court restructurings, bankruptcy proceedings, and mergers and acquisitions." His resume includes serving as a Financial Advisor to Grupo Mexico during is retention of equity in ASARCO's contested confirmation hearing, managing more than $200 million in asset sales for an $8 billion supermarket chain in Chapter 11, and providing general bankruptcy advice and managing operations for the restructuring of a $250 million medical diagnostic company. A former lawyer with a leading New York firm, Karol holds a bachelor's degree from Yeshiva College and is a Juris Doctor studying at Yale Law School..."

 

[AK.TH.UR.UEmember]

CRO announcement

There are other clubs with "SUGAR DADDIES" looking to get bigger and if you can get "information", there are other things going on as well. I just think that the equity holders egos are so big that it most likely will not happen unless Capital Source forces the current equity holders hands.

Now that there has been a public announcement of the CRO's appointment, I guess you could remove the quote marks around the word information.

Bottom line is, I was pretty close to some of the earlier transactions and once in a while do have what you refer to as "information", sometimes a bit ahead of the public announcements...and I thought folks on this thread might be interested, that's all.....

I apologize if that is upsetting and worthy of sarcastic punctuation....

I guess I really don't understand the ad hominem nature of your comments after my postings, but let's move on shall we...???

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I continue to have real doubts about any other club stepping up if UE fails, even if there is the potential for a lot of new members in a hurry (which was Jim's theory, of course..). The nature of this real estate with very few properties scattered in many locations just make the economics hard, and the membership must be pretty burned out by now.

Remember, UR brought in a lot of bucks with upgrades from his base offer of the dues only 14 day bronze membership. That cash gave Jim some breathing room up front. Since the 14 day, dues only bronze members (not me unfortunately) are the ones who have no new potential losses if UE goes under, who would upgrade and give a new club any $$..??

So, I wonder again - could the members themselves pull something together to move forward. The problem is that there is no longer any equity in the homes. When Jim bought from T&H, there was arguably a significant equity still in the real estate (maybe north of $20 million) - but that was before the UR/UE losses, the housing price collapse, and the money scramble of the last couple of years.

So my real fear is an abrupt, total shutdown, leaving many of us scrambling with already purchased tickets and no place to stay.

Just my 2 cents.

 

[ClubsRDead]

So does this mean the CRO will can Jim? How long until that significant event takes place? Ooopss....is Jim going to trade shares in UE now with whoever owns this website so they take it down too?

 

[wilkes591]

Now that there has been a public announcement of the CRO's appointment, I guess you could remove the quote marks around the word information.

Bottom line is, I was pretty close to some of the earlier transactions and once in a while do have what you refer to as "information", sometimes a bit ahead of the public announcements...and I thought folks on this thread might be interested, that's all.....

I apologize if that is upsetting and worthy of sarcastic punctuation....

You have a total of 5 post and most are "UE going BK" with

Until the sarcastic punctuation, your post had very little "information".

The UE situation is what it is and will be resolved shortly. As how you see it and I see it, it is very similar.

Once again UE is MOST LIKELY NOT going to be "merged" with another club. It will either try to raise money from members ie. assessment or file.

As I am in the same boat as you travel plans in the near future with family and friends and the possibility of scrambling to find lodging for everyone at the last minute.

I can care less who post what on a message board, does not upset me at all. Tell me all my messages suck, I have no idea, I am not offering anything, put me on ignore, It really will not bother me. Hope you feel the same way.

Just like every other member, I am try to get information where I can from who I can since UE is not providing anything officially.

Good luck to you and Happy Travels

 

[ClubsRDead]

Just like every other member, I am try to get information where I can from who I can since UE is not providing anything officially.

As am I. I've heard from a few that there's a group getting together (of members) to make a bid for the club - does anyone have info on that?

 

[Kagehitokiri2]

if so i would suggest getting in touch via private message, confirming identities, then starting communication via phone/email/etc.

so none of the (originally posted on DC4MS) email lists are still going?

clearly that was one of the things UE wanted to stop.

 

[wilkes591]

As am I. I've heard from a few that there's a group getting together (of members) to make a bid for the club - does anyone have info on that?

That's funny, investing more capital in a DC, good luck!

 

[ClubsRDead]

That's funny, investing more capital in a DC, good luck!

I would definitely consider putting capital in if it was for deeded interest in real estate, ie real equity. Jim's "offers" have always been "give me cash so I can pay operating expenses and inflated salaries." No thanks. But if we could buy a decent pool of the real estate that enough members like / want / use, and set dues commensurate to running the club - get the right # of members and scale services to match demand - why not? The other clubs that claim to be "equity" clubs, albeit small seem to be doing okay. Sure maybe no one (with a brain) is buying new memberships, but if we own and hold the real estate, why not? Of course that would require some cash up front and likely a good rapport with Capital source to pull it off. And a few people to manage the process.

 

[wilkes591]

And a few people to manage the process.

And hence the problem, I am sure you know a few right?

I was a fool to join, they got me once. Never Again.

I might give them some throw away money, to keep the vacations on the books alive and the family happy or do a dues only offer with another club if it ends and makes sense. But other then that, it is not for me.

Good Luck, but I think your call sign says it all if UE goes under. At least for me.

 

[Kagehitokiri2]

wilkes591, literally the entire business model of timeshares (99% of properties) is to ripoff the initial buyers.

how can you write off "DCs" (which i basically define with "exchange free") because of individual business practices?

luxus is a 100% conservative DC. no debt, no leases, few services. everything else is on a spectrum between them and the most ridiculous.

its just a question of how the industry develops from here, and/or how long it takes for good business practices to really come into play, and stabilize things.

 

[travelguy]

So my real fear is an abrupt, total shutdown, leaving many of us scrambling with already purchased tickets and no place to stay.

This is the standard ending to DCs that go bust. I'm amazed that DC members continue to be surprised and unhedged with their travel plans when this happens.

I'd bet that this will not be a happy ending but wish all the best for the current members.

 

[ClubsRDead]

And hence the problem, I am sure you know a few right?

.

I don't think it would be too hard to find a couple seasoned investment bankers or former managers. The bigger challenge might be getting the money together, but the member pool could use those whoever bring it to the table.

 

[3DH]

So my real fear is an abrupt, total shutdown, leaving many of us scrambling with already purchased tickets and no place to stay.

As one who went down with the LUSSO ship, my advice would be to book rooms, alternate residence, etc. as a backup plan. Been there, done that, sadly. Good luck... hoping you don't have to go through what we and other former LUSSO members have.

 

[travelguy]

As one who went down with the LUSSO ship, my advice would be to book rooms, alternate residence, etc. as a backup plan.

Great advice. When the end comes, it is usually very SUDDEN sometimes followed by a complete silence from the DC corporate.

Also note that, as the saying goes, possession is 9/10ths of the law. If you're in one of the DC properties when the end comes, you should be able to finish out your trip. No one is going to come kick you out, just don't expect any services. Now if the utilities are shut off .....

 

[ClubsRDead]

Great advice. When the end comes, it is usually very SUDDEN sometimes followed by a complete silence from the DC corporate.

.

Curiously, this comment is based on what experience? Certainly not the case when TH went bust on us...

 

[AK.TH.UR.UEmember]

Member owned DC...????

As am I. I've heard from a few that there's a group getting together (of members) to make a bid for the club - does anyone have info on that?

There are definitely discussions going on, even over the weekend.... The CRO forgot to get paid up front and there is no cash to lease new properties to fulfill on the reserations which have been taken for "phantom properties", so the cash situation is way beyond critical.....

So, I wonder if there isn't a way to get CapSource to take a major haircut (they ae facing one in any case) to create some new equity in the properties (there certainly isn't any now) and then to get some new cash from someone based on that equity. If new $$ comes in, it would have to be backed up by real equity vale of eal estate I think, not just the usual arm waving......

Example (not accurate numbers)...

CapSource is owed say $110 million. The homes are worth perhaps $40 million on an agressive liquidation basis but maybe $70 million if held now, with some upside maybe over the next few years..

So CapSource could (1) liquidate and lose over 60%, or (2) take a haircut on the debt in exchange for equity in a member-driven club (reduced in size) and maybe get 60% or more over a modest amount of time....

I just hope there are a few people looking at every alternative. There is no reason to believe that JT is going to go along with anything easily, but eventually maybe he will realize something must be done.... Right now, the CRO doesn't talk to JT who in turn hardly talks to anyone, so things are muddled to say the least.

Also, something may have to be done in the next month since they only have funds for about one more payroll....

Question - how does anyone get JT to face facts and step aside....????

The end game for UE will be very interesting to watch..............

 

[AKTHUE]

The CRO forgot to get paid up front

Kind of hard to believe a pro CRO wouldn't have taken some cash up front, unless he got paid direct by CapSource.

I wonder if there isn't a way to get CapSource to take a major haircut (they ae facing one in any case) to create some new equity in the properties (there certainly isn't any now) and then to get some new cash from someone based on that equity. If new $$ comes in, it would have to be backed up by real equity vale of eal estate I think, not just the usual arm waving......

Example (not accurate numbers)...

CapSource is owed say $110 million. The homes are worth perhaps $40 million on an agressive liquidation basis but maybe $70 million if held now, with some upside maybe over the next few years..

So CapSource could (1) liquidate and lose over 60%, or (2) take a haircut on the debt in exchange for equity in a member-driven club (reduced in size) and maybe get 60% or more over a modest amount of time....

If your numbers are right, then either CapSource needs to be paid $40 million cash, and maybe they'd take that as full settlement, or be left with some warrants in the resulting club or some very junior debt, or else CapSource would want that $40 million to be senior, secured debt, ahead of everything else, with new equity coming in to fund operations in exchange for CapSource writing down some debt or making some more junior.

If CapSource could liquidate the real estate for $40 million now, CapSource isn't going take only junior debt in return for letting the club have another go. They are going to be focused on protecting what remaining capital they have. As it is they have to feel they've been burned by letting JT keep trying.

By the way, the face value of CapSource debt may be down by $15 million to reflect the payments made and the cash they appear to have seized.

It's strange that ULEI hasn't had to file something to the SEC about the CRO situation and CapSource's position.

 

[mhparker]

removed by author.

 

[travelguy]

Curiously, this comment is based on what experience? Certainly not the case when TH went bust on us...

The more recent DC club failures - HCC, Lusso, etc. I can't remember them all without the DC4MS archives as a reference.

My guess is that the more recent DC failures have ended abruptly because they exhausted all the possible options that many of the early failing DCs engaged to provide continuity. Cash deprived, asset depreciated, profit losing DCs are not the M/A candidates they were back in the early days. Now, the DCs just keep running until they exhaust all cash and/or credit and cannot possibly continue as an ongoing entity. IMHO, UE would appear to have the record for "ability to continue business operations by a failed DC".

 

[Kagehitokiri2]

because of capsource...?

 

[willmyclubmakeit]

forebearance

so what did you think of UE's 8k and forbearance on the debt until September 10? I hope this gives the management team and CRO some time to work out a deal that works for the members. I am trying to be optimistic and have not yet booked any backup plans for trips. Is that a mistake?

 

[ClubsRDead]

I misread your post above. Yes, the 8K today, as filed. An abomination...