Ultimate Escapes Chief Restructuring Officer Sheon Karol Updates Members On Tousignant Departure

By: Destination Club News
Date: September 30, 2010

The past month has been a chaotic one for Ultimate Escapes, the world's second largest destination club. A bankruptcy filing. Multiple offers from competing destination clubs looking to attract Ultimate Escapes members who have lost their travel reservations. The termination of the club's CEO and President. This is the situation that Chief Restructuring Officer Sheon Karol has walked into after the Board of Directors gave him responsibility for the day to day operations of the club earlier this week.

Karol has since contacted club members about his appointment, the departure of Jim Tousignant, and upcoming travel matters.

Members of Ultimate Escapes,

I am writing to inform you that as a result of the termination of Jim Tousignant as President and CEO, the Board of Directors of Ultimate Escapes has delegated to me, in my role as CRO, the responsibility for the day-to-day operations of the business. In carrying out these duties, I will continue working with certain key members of the management team and the Company’s employees.

The Company and CRG continue to market the Club to potential acquirers and have engaged in active negotiations with a number of potential partners. To date we have executed nearly 40 non-disclosure agreements. We are continuing to negotiate and respond to potential acquirers. I am also aware that several Clubs have sent solicitations to Ultimate's members (Destination Club News Note: offers from Quintess, Exclusive Resorts, and The Discovery Club have all been introduced), and there have been questions as to whether these are somehow sponsored by the Company or authorized by the Company. Let me assure you that none of the offers you have been receiving are authorized and some result from activity that is currently the subject of litigation brought by the Company. I apologize for any inconvenience this activity has caused and assure you that we are taking every action possible to curtail this activity.

On the reservation and travel front, as you are aware, we have had to cancel reservations in leased properties. However, we have made a concerted effort to contact the owners of these properties to ascertain their interest in being contacted by members for purposes of renting these properties directly. I am pleased to report that a number of these owners have expressed an interest, and accordingly we will post soon a list of properties and contact information on the Member Only Website. We shall update this list as additional properties are added. The purpose of this list is to allow members and property owners to connect and the Club cannot assist in any activity beyond the provision of the list. I appreciate your continued patience and understanding as we continue to work to provide the best level of service possible under the circumstances. I know many of you still have questions regarding the Bankruptcy process, your travel arrangements, when and if you will paid any amounts you may be due and other issues. I urge you to continue to avail yourselves of the various methods we have established to keep you informed, including checking the Member Only Website and submitting questions you may have to bankruptcy@ultimateescapes.com.

Sincerely,

Sheon Karol
Chief Restructuring Officer

We spoke to Holly Felder Etlin, an destination club restructuring expert and former colleague of Sheon Karol, about her philosophies for restructuring a destination club. "You have to have open, honest, and frequent communication," Etlin told us when discussing how to work with club members. Let's see if Karol adopts such a perspective as we move forward.

We will continue to read through the Ultimate Escapes bankruptcy documents and will feature more coverage about this ongoing story as it happens, so check back soon.