Ultimate Escapes Continues To Pursue Member Owned Option

By: Destination Club News
Date: October 8, 2010

Nearly one month ago today, Ultimate Escapes President and CEO Jim Tousignant addressed members via webinar, stating "We are in crisis." The world's second largest destination club had defaulted on a loan agreement with lender CapitalSource and was left with left with minimal cash and growing accounts payable. Tousignant would go on to pitch his vision for how to save the club by converting Ultimate Escapes to partially member-owned entity. Much has changed over the past month. Club members voted down the proposed conversion plan. Ultimate Escapes filed for bankruptcy, citing between $100 million and $500 million in liabilities. Jim Tousignant has been relieved of his duties as President and CEO. While much has changed, one thing that remains the same is the club is still considering a member-owned option.

Earlier this week, Ultimate Escapes Chief Restructuring Officer Sheon Karol reached out to a select group of members about this alternative.

"As I have indicated in my communications with members of Ultimate Escapes, one of the alternatives we wish to pursue is a member-owned club. Your names have been suggested as members who might be interested in supporting such a plan and who have the ability to provide leadership in this regard. We shall send you, under separate cover, a presentation that provides a suggested outline of a plan pursuant to which the members would assume ownership of the Club and continue its operations."

"The presentation is based upon parameters that the Company’s primary secured lender has indicated it would finance. We hope to obtain your initial response, suggestions and feedback before approaching the membership at large. To that end we are proposing to have a conference call to discuss your initial thoughts. Please tell us which time is best for you: Thursday (October 7) at 9:30pm, Friday (October 8) at 11:00am or 1pm, Sunday (October 10) at 9am or Monday (October 11) at 4:30pm or 8pm (Eastern)."

According to our sources, the proposed plan would need approximately 800 members to participate with a sizeable increase in annual dues. It isn't immediately clear how the club determined which members received this announcement and if a call to discuss this alternative has been scheduled.

Much happened today in regards to the Ultimate Escapes bankruptcy, including the court stating that they will conduct a sale hearing on October 20 where the court will consider approval of the sale to the successful bidder.

The Ultimate Escapes saga is far from the end, so please check back soon for more up to the minute details about the club and the rest of the destination club industry.