Ultimate Escapes Contacts Members About Bankruptcy Filing

By: Destination Club News
Date: September 21, 2010

Ultimate Escapes has been known by many titles over the years. The world's second largest destination club in terms of members. The largest in terms of total destinations. The only publicly-traded destination club in operation. Yesterday, they added another title as the largest destination club ever to file for bankruptcy.

Members were contacted by the club yesterday, touching on many points concerning all phases of membership, including substantial reductions to the Ultimate Escapes property portfolio, their continued exploration of potential sales and other strategic alternatives, and how long members can continue to travel with the club.

We have brought you the unedited letter sent to members. Unlike other communications from the club in recent days, the note does not include signatures from either CEO and President Jim Tousignant or Chief Restructuring Officer Sheon Karol, giving pause to who is actually disclosing the information to members.

Members of Ultimate Escapes,

On September 20, 2010, Ultimate Escapes, Inc. (the "Company") and certain of its direct and indirect subsidiaries and affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

The Company has petitioned the court to approve the appointment of CRG Partners, LLC to provide the services of a Chief Restructuring Officer and supporting personnel. It is expected that the Company, through its Chief Restructuring Officer, will be allowed to manage its business in the ordinary course.

The Company, in conjunction with its largest secured creditor, Capital Source Bank, is actively continuing the process of exploring the sale of its operations to another destination club, hospitality company or investment group as well as other strategic alternatives, including potentially a conversion to a member-owned club.

At this point, the Company will only continue to operate a limited number of residences. For our Members, this means the immediate termination of existing leases and corresponding reservations in the following locations.

Bend, OR - Signature - Pronghorn Club

Big Island, HI - Signature - Kohala Dream

Costa Rica - Signature - Pura Vida

Costa Rica - Premiere - Tico Terrace

Deer Valley - Signature - In the Trees

Florence, Italy - Elite - Ferragamo

Jackson Hole - Elite - Rendezvous

Key West - Elite - Island House

Kiawah - Signature - Bufflehead

Kiawah - Signature - Raynor's Hideaway

Kiawah - Elite - Seaside Serenity

La Quinta - Elite - Terrace Green

Lake Tahoe - Elite - Great Bear Lodge

London - Elite - Chesham

London - Signature - Butler's Wharf

Maui - Signature - Whale View

Maui - Signature - Wailea #403

Maui - Elite - Wailea #412

Miami - Premiere - Trump Sonesta

Naples - Elite - Old Naples Cottage

NYC - Elite - 1600 Broadway PH2C

NYC - Elite - 1600 Broadway PH5D

Orlando - Signature - Homestead Estate

Palm Beach County - Signature - Spanish River

Paris - Elite - Maison Pompidou

Stowe - Elite - Soupcon

Telluride - Elite - Winter Haven

While no new travel or reservations can be supported by the Company in the residences above, Members currently in residence will be allowed to complete their travel, absent the surfacing of any landlord issues that cannot be amicably resolved.

Use of the following residences and experiences has also been terminated effective immediately.

Abaco, Bahamas - Signature - Abaco Club #8

Beaver Creek - Premiere - The Charter

Belize - Premiere - Belizean Dreams

Breckenridge, CO - Signature - Snowflake at Blue Sky

Dominican Republic - Premiere - Villa Maria

Dominican Republic - Signature - Villa Kary

Lake Las Vegas - Premiere - Viera

Nevis - Elite - Villa 2

Nevis - Elite - Villa 3

Nevis - Elite - Villa 4

Nevis - Elite - Villa 6

Nevis - Elite - Villa 7

Nevis - Signature - Villa 8

Nevis - Signature - Villa 9

Reynolds Plantation - Signature - Oconee Estate

Turks & Caicos - Premiere - English Cottage

Tuscany - Premiere - Villa Cassia

Tuscany - Signature - Rigo Salcio

Watercolor - Premiere - Seaside

Watercolor - Signature - Seagrove

British Virgin Islands - Signature - La Buscadora

While no new travel or reservations can be supported by the Company in these residences, Members currently in residence will be allowed to complete their travel, absent the surfacing of any lender issues that cannot be amicably resolved.

In addition, funding for the Annual and Seasonal Leases announced in May, and scheduled to be open for use as early as this month will not be made available. Consequently, reservations in these twenty six residences will be cancelled.

Relative to our hotel alliances, we will also be ending our relationships with World Hotels and the Waldorf Astoria and reservations will be also cancelled.

We recognize these actions will impact many of our Members travel plans and we regret that despite the collective efforts of everyone involved, we were unable to overcome the continuing challenges posed by the slow economy, the downturn in the real estate market and the tight credit markets.

The Company has funding as a "Debtor in Possession" for thirty (30) days or until October 19, 2010. Reservations at the residences below, for travel to be completed within this period, will be honored as usual. Reservations for travel to the residences below with end dates extending beyond October 19, 2010 will need to be cancelled or shortened. Reservations for travel through October 19, 2010 to any residence other than those on the list below will be cancelled. The Company will maintain the list of all future reservations for travel to the below residences after October 19, 2010 so that any potential purchaser of the business as a going concern can choose whether or not to honor them as part of their proposal to members. The ability to honor reservations beyond such period will be subject to the outcome of the plan developed in the bankruptcy.

While the loss of residences in our portfolio is extensive, our goal is to minimize the effect of this unfortunate circumstance on our Members to whatever extent possible. Please contact your Escape Planners who will work diligently with you to find alternative travel opportunities within the remaining portfolio of residences below to the best of their ability.

Abaco, Bahamas - Elite - Abaco Club #42

Abaco, Bahamas - Elite - Abaco Club #43

Abaco, Bahamas - Signature - Abaco Club #6

Beaver Creek - Elite - Beaver Creek Lodge

Big Island, HI - Premiere - Maluhia

Big Island, HI - Premiere - Wailana

Chicago - Premiere - Lincoln Park

Copper Mountain - Signature - Super Bee

Deer Valley - Elite - Silver Lake #2

Deer Valley - Elite - Silver Lake #6

Delray Beach - Elite - Ocean View

Indian Rocks Beach - Elite - Beach House

Jackson Hole - Premiere - Teton Mountain Lodge

Jackson Hole - Signature - Snake River Lodge #231/232

Jackson Hole - Signature - Snake River Lodge #339/340

Kiawah - Elite - Windhaven

Kiawah - Premiere - Night Heron

Kiawah - Signature - Broomsedge

La Costa - Signature - La Costa Resort #7

La Quinta - Premiere - Montana

La Quinta - Premiere - Laguna

La Quinta - Signature - PGA West

Lake George - Signature - Sagamore

Lake Las Vegas - Elite - Tramonto

Lake Tahoe - Premiere - Third Creek

Lake Tahoe - Signature - Caddie Court

Los Cabos - Elite - Casa Eternidad

Los Cabos - Elite - Villa Paraiso

Los Cabos - Elite - Esperanza 1501

Los Cabos - Elite - Esperanza 1502

Los Cabos - Elite - Esperanza 1503

Los Cabos - Premiere - Casa Oceano

Los Cabos - Premiere - Villa Rubi

Los Cabos - Signature - Casa Paraiso

Los Cabos - Signature - Casa Martha

Los Cabos - Signature - Villa del Sol

Los Cabos - Signature - Casa Tortuga

Los Cabos - Signature - Esperanza 1601

Los Cabos - Signature - Esperanza 1602

Los Cabos - Signature - Esperanza 1603

Maui - Elite - Wailea #208

Miami Beach - Signature - Acqualina

Naples - Signature - Strada Bella

NYC - Elite - Trump #300/301

NYC - Elite - Trump #302/303

NYC - Elite - Trump #310

NYC - Premiere - Link #29C

NYC - Premiere - Trump #318

NYC - Premiere - 1600 Broadway #18F

NYC - Signature - Trump #308

NYC - Signature - Trump #1222

NYC - Signature - Trump #1622

NYC - Signature - Link #31B

Outer Banks - Premiere - Osprey

Outer Banks - Signature - Hunters Green

Punta Mita - Premiere - La Playa

Reynolds Plantation - Premiere - Carolyn's Pond

Scottsdale - Elite - Happy Valley

Scottsdale - Elite - The Rocks

Scottsdale - Signature - Highpoint

St. Thomas - Elite - Lovenlund Estate

Steamboat Springs - Premiere - Eagle Ridge Lodge

Steamboat Springs - Signature - Mountaineer

Stowe Vermont - Premiere - Topnotch #512

Sun Valley - Elite - MacKenzie Lane

Sun Valley - Elite - Plaza #2

Telluride - Signature - Cabin #4

Telluride - Signature - Cabin #8

Turks & Caicos - Signature - Dundee Estate

Tuscany - Premiere - Borgo di Vagli

While we appreciate that you have many questions and concerns regarding your travel plans, please recognize that your Planners will be fielding many calls. Please be patient with us as we work to respond to each and every one of you.

Should you have any questions concerning the recent Company filing, please submit your questions to bankruptcy@ultimateescapes.com. We will respond back to you as soon as possible.

Thank you.