Ultimate Escapes Members Vote Down Member Owned Option

By: Destination Club News
Date: September 15, 2010

Ultimate Escapes, the world's second largest destination club, outlined a plan last week that they said "made the most sense" for their dire financial situation, converting the club to a member-owned entity by allowing members the ability to convert their membership into shares of the club. The club polled their 1,000+ members over the weekend and disclosed the results late last night: a roughly two to one vote against such a plan.

President and CEO Jim Tousignant and Chief Restructuring Officer Sheon Karol sent a brief letter to members about the results of the poll.

Dear Members:

We sincerely want to thank you all for your swift response to the Member POLL over the weekend. Nearly 1,000 Members participated, the votes were tallied and the results were approximately 2:1 against the conversion to a Member-owned Club on the terms proposed. The support of our Members is critical for our business.

The Company continues to explore all alternatives, including ongoing discussions with a number of parties regarding a potential acquisition and we will keep you apprised of developments in the forthcoming days. We are aware of the frustrations many of you have experienced in the last couple of days in attempting to communicate with the Company and also with regard to timely Member communications and we are working hard to rectify this within the constraints of our current situation. Thanks for your continued support and patience.

Warm regards,

Jim Tousignant, President & CEO
Sheon Karol, CRO

We identified some of the problems we saw with such a design earlier, including the large amount of debt that would still be owed to CapitalSource if such a plan was put into place and a convoluted conversion system that would have memberships converted into stock at $3.87 per share when the share price was hovering around $0.60 when the proposal was put forth.

Not satisfied with the presentation, timing thereof or options outlined by the club last week, a large number of Ultimate Escapes members have joined together in creating a "members only" group to discuss other alternatives. While the partially member-owned option outlined by Ultimate Escapes was struck down, one ongoing discussion is converting the club to a completely member-owned, debt free, equity club with a new management team and structure. The proposed details aren't presently available, but we are eager to learn more. If you are a member of Ultimate Escapes, please e-mail UEMemberOptions@gmail.com to be added to this distribution list and to discuss these and other options with your fellow members.

While Ultimate Escapes will continue to pursue other avenues moving forward, a bankruptcy filing is the most likely outcome that we see in the immediate future. As always, we will keep a close eye on the situation and will let you know of any breaking news about the destination club as it happens. Check back soon.