Details Regarding Ultimate Escapes Appointment of Chief Restructuring Officer Sheon Karol

By: Destination Club News
Date: September 3, 2010

Ultimate Escapes and CapitalSource recently signed a forbearance agreement where CapitalSource would not exercise their rights under an active loan agreement that Ultimate Escapes defaulted on until September 10, 2010. As part of this agreement, Ultimate Escapes has agreed to bring on Chief Restructuring Officer Sheon Karol from CRG Partners.

According to the agreement, Karol will perform the following duties without limitation:

  • The creation and implementation of an operating strategy designed to optimize cash flow from operations during the period commencing on the Effective Date and ending on the Forbearance Termination Date;
  • Formulating and directing the process for any potential sale and/or merger of Holdings and/or the Clubs or other course of action designed to maximize the value of the Borrowers;
  • Proposing, implementing and leading Borrowers’ restructuring initiatives
  • Formulating and directing Borrowers’ asset disposition process, including, without limitation, the disposition of the Marketed Real Estate Assets;
  • evaluating and recommending the retention of any professionals, including, without limitation, an investment banker and/or real estate broker, to assist in accomplishing any of the foregoing, provided that the retention of any such professionals shall require the prior written consent of Agent in its sole discretion.

As a condition of the forbearance agreement, Ultimate Escapes is required to continue to employee Karol or "an officer or principal of a nationally recognized restructuring firm to serve in the capacity of Chief Restructuring Officer" at all times while any of the club's obligations remain outstanding unless agreed upon by CapitalSource. If Ultimate Escapes fails to do so, they will be in immediate default, where the entire amount of the loan and all obligations under the loan agreement will become due.

Ultimate Escapes has closed their Colorado division and have made cuts to their executive ranks and general staff in recent weeks, both necessary steps as the club trims operational costs. Tomorrow, we will follow up with the tasks that Karol and the rest of the world's second largest destination club have put into place. With September 10 just a week away, we will continue to monitor the happenings at Ultimate Escapes to keep you informed of any late breaking news.