Consolidated Resorts moves forward after bankruptcy

By Steve Green

Thursday, Sept. 9, 2010 | 12:06 p.m.

The big Consolidated Resorts Inc. timeshare bankruptcy case is winding down in Las Vegas, with businessman Arthur Spector purchasing some of his company's resort assets out of bankruptcy for $13.851 million.

The Arthur Spector Companies announced today that on Aug. 31 it completed the acquisition of all of the remaining timeshare inventory and operating assets of the Tahiti Village, Tahiti and Club de Soleil vacation ownership resorts in Las Vegas and other resorts in Hawaii.

"The closing of the sale from the bankruptcy estate is the first in a series of planned transactions that will result in the Spector family investing more than $30 million back into the local Las Vegas economy,'' the company said in a statement today.

"We are pleased to bring this business back under the control of our local family that has succeeded in the timeshare business for over 30 years," Spector said in the statement. "We are especially thankful that we were able to assist the trustee to protect the interests of over 100,000 timeshare owners in these difficult times. All of the timeshare resorts have remained fully operational, the owners have had uninterrupted use of their vacation plans and continue to choose Las Vegas and Hawaii as their vacation destinations. We look forward to rebuilding this vital sector of the Las Vegas economy."

With the recession harming the company, investors and creditors lost hundreds of millions of dollars before and during the Consolidated bankruptcy that was filed July 7, 2009.

In 2007, Wall Street investment bank Goldman Sachs Group Inc. said one of its real estate investment funds had made a substantial investment in Spector's ASNY Corp. timeshare business -- the parent of Consolidated Resorts.

But the economy soured and the Wall Street Journal reported 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.

In a July 30, 2009, filing in the Chapter 7 case, Consolidated listed assets of just $3.7 million vs. liabilities of $337.5 million. However, it was later revealed that a key asset of the company was $300 million in face-value financing agreements made with timeshare buyers. Most of those notes were collateral for secured creditors' claims.

As the case progressed, court-appointed receiver William Leonard Jr. said he marketed the properties and the sales deal was agreed to by he, ASNY and key creditor GMAC Commercial Finance LLC.

The sale will result in $6.9 million to benefit the 14 separate Consolidated Resorts debtors' estates and creditors, Leonard said in a court filing.

"This cooperative effort to ensure the continued proper and efficient operation of the resorts has had the salutary effect of leaving unaffected the more than 100,000 timeshare owners of the resorts and accordingly, preventing those owners from being involved in these proceedings,'' Leonard said in the filing.

The assets purchased include thousands of unsold timeshare intervals, timeshare receivables, trade names, copyrights and other intellectual property; and developer's rights to the Tahiti Village on Las Vegas Boulevard and the Tahiti and Club du Soleil properties on Tropicana Avenue in Las Vegas; as well as properties in Hawaii: Sands of Kahana, Hono Koa, Maui Banyan, Maui Beach, Gardens at West Maui, Kahana Beach, Kahana Villa and Kona Islander.

Ken Chupinsky, chief financial officer for the Spector Companies, said Thursday that in Hawaii, most of the timeshare inventory has been sold so the significance of the bankruptcy resolution there is that the Spector organization will continue to manage those properties.

In Las Vegas, not only will Spector continue to manage the properties but the $30 million investment is earmarked for future development of the big Tahiti Village property on Las Vegas Boulevard at Warm Springs Road.

Tahiti Village now has the equivalent of about 900 one-bedroom timeshare condominiums, and could more than double in size with future phases. But because of the economic climate, it's unknown when development of future phases there would begin.