Updates on Celebrity Resorts Filing Chapter 11

As of last week, Celebrity Resorts, LLC (timeshares) and 35 affiliates have voluntarily filed for chapter 11 bankruptcy protection, filing in the US Bankruptcy Court in Orlando, Florida.

Celebrity (and its affiliates) own and operate thirteen timeshare resorts including Florida timeshare, Hawaii timeshare, and timeshare in Colorado, Nevada, New Jersey, and Pennsylvania.

Celebrity Resorts timeshares report that the company has approximately $23 million in unsecured debt and $12 million in secured debt. The two debts listed as secured are to International Escrow Services of Atlanta and Resort Condominiums International of Carmel, Indiana.

According to an article by Randall Reece for Netdocs.com, the company cites the following as the three primary reasons for the bankruptcy:

1. The economy in general and what the timeshare company calls, “unprecedented decrease in revenues” since September 2008.
2. Internal disagreements between family members who hold control over the debtors regarding the company’s business model. Two family members have been terminated, one of whom has filed a lawsuit against several of the companies involved.
3. The declaration of a default on a loan owing to Textron Financial Corporation.

Celebrity Resorts, formerly known as Resort World, began its business selling Caribbean timeshare in the 1970s, and then added Orlando timeshare in the 1980s.

At the time of this blog posting, there is no information on the company’s website regarding how the closing may impact any of the Celebrity Resorts timeshares.

The full court document is currently available to read at: http://www.jdsupra.com/post/documentViewer.aspx?fid=491abf36-f3e4-4fbe-81a1-2bbeeebbdb80