CRO Sheon Karol And His Plans For Ultimate Escapes

By: Destination Club News
Date: September 4, 2010

Yesterday we profiled the details regarding the appointment of CRG Partners' Sheon Karol to the role of Chief Restructuring Officer at Ultimate Escapes. Today we outline Karol's plans for the world's second largest and only publicly-traded destination club.

According to the club's recent 8-K filing, the Board of Directors, including a special committee consisting of the independent directors of the company, are working with CRG to review the alternatives currently available to Ultimate Escapes, including new debt or equity financing or "a sale of all or sustainably all of the assets of the Company to a third party."

Earlier this week, Karol prepared a marketing plan identifying properties of Ultimate Escapes to be marketed and sold, including an "expected sales price" and "minimum sales price" for each. Following the approval of this plan by CapitalSource, Ultimate Escapes will begin listing such properties commercially.

Any offers that Karol deems to be "in the best interest" for the lender will be submitted to CapitalSource for approval. Offers above the minimum sales price however won't need approval from CapitalSource to be sold.

Karol will also be responsible for "creating and implementing an operating strategy designed to optimize cash flow from operations, formulating and directing the process for any potential sale and/or merger of UEH (Ultimate Escapes Holdings) or the Company’s vacation clubs, proposing, implementing and leading the Borrowers’ restructuring initiatives, formulating and directing the Borrowers’ asset disposition process, including the proposed sale of certain of the Borrowers’ specified properties, and evaluating and recommending the retention of any professionals, including an investment banker and/or real estate broker, to assist in accomplishing any of such actions."

The addition of Karol as Chief Restructuring Officer has been joined by the closure of the club's Colorado branch and layoffs at the executive level, greatly reducing the club's operational costs, one of the highest action items the club has outlined recently.

Many avenues are open for Ultimate Escapes and it will be up to Karol, President and CEO Jim Tousignant, and others to determine how the club moves forward, whether it be the selected selling of real estate, new debt and equity financing, or another option as not yet discussed.