Wednesday, July 8, 2009 | 2:47 p.m.
Las Vegas-based timeshare operator Consolidated Resorts Inc. and affiliated companies started filing for bankruptcy protection Tuesday, as expected, in what promises to be a massive case involving hundreds of millions of dollars in debt.
Consolidated runs 14 properties including the Tahiti Village, Tahiti and Club de Soleil timeshares in Las Vegas; as well as timeshare operations in Hawaii and Florida.
It announced June 23 that because of economic conditions it was closing its sales and marketing operations and would seek bankruptcy protection -- but would keep its resorts open for use by timeshare owners.
The bankruptcy filings for Consolidated and 13 affiliated companies were all filed as Chapter 7 liquidations in Nevada bankruptcy court. In Chapter 7 cases, trustees sell assets and use the proceeds to repay debtors.
But Consolidated spokesman Ken Chupinsky said Wednesday that timeshare interval owners will continue to have full use and enjoyment of the resorts.
He said a management company that did not file for bankruptcy protection will continue to run the condominium associations responsible for each resort, which are owned by the timeshare owners.
"This has nothing to do with the timeshare owners. The timeshare owners are in fine shape," he said.
Affiliated companies named in the bankruptcy petitions filed Tuesday and Wednesday were Destinations Unlimited LLC, Consolidated Maui Inc., Consolidated Orlando Inc., Consolidated Tahiti Inc., Consolidated Kona Inc., Consolidated Realty Inc., Consolidated Media LLC, CRI Travel Holdings LLC, Consolidated Resorts Travel LLC, Lahaina Ticket Co., Soleil PS LLC, Soleil LV LLC and Consolidated Tickets LLC.
The filings totaled thousands of pages. Consolidated Resorts Inc. alone said it had 5,000 to 10,000 creditors -- apparently including many timeshare owners as well as trade creditors and individuals and other parties involved in litigation with Consolidated.
Consolidated Resorts listed assets of $50 million to $100 million and liabilities of $100 million to $500 million.
While the companies didn't spell out any further financial details in their filings, a lack of financing for timeshare buyers and dwindling inventory contributed to the filings, a source involved in the case said.
Besides the curtailment of marketing, the bankruptcies mean further development of Tahiti Village on Las Vegas Boulevard at Interstate 215 will be delayed indefinitely. That property has 860 units and room for expansion.
Tahiti, with 93 units, and Club de Soleil, with 150 units, are both on Tropicana Avenue west of Decatur Boulevard. Neither property has room for expansion.
In 2007, Wall Street investment bank Goldman Sachs Group Inc. said one of its real estate investment funds had made a substantial investment in Consolidated parent ASNY Corp.'s timeshare businesses run by businessman Arthur Spector.
But the economy soured and the Wall Street Journal reported this year that by the end of 2008 the fund, Whitehall Street Global Real Estate Limited Partnership 2007, had written off to nothing its $372 million investment in ASNY.