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Vegas timeshare operator files for bankruptcy

Company runs 14 properties and will keep resorts open

Wednesday, July 8, 2009 | 2:47 p.m.

Vegas timeshare company to close sales operations (6-23-09)

More stories about business and the economy

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.

Discussion: 15 comments so far…

By rejco100

7/8/09 at 2:59 p.m.

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HA HA HA! All those properties and homeless veterans are living under bridges or in horrifying prison-like 12-step religious cult centers. The curse is on all of America until you GET THE VETERANS IN REAL HOUSING!
By LasVegas2009

7/8/09 at 3:12 p.m.

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rejco100 just because someone served and cashed checks for serving does not mean the country owes him or her a living. If these vets want a free house they can build it. They can get jobs are and work for a better life. Those on drugs chose that lifestyle and many of the homeless chose that lifestyle as well. I would think being a solider would make you get up and get after it everyday to improve your condition in life. 12-step religious programs have helped millions. Every once in a while some nut case cant comply and has to be pushed out. Is that what happen to you? Those Veterans need to get up and go to work everyday if they want something. Dont expect us to feel sorry for adults not taking charge of themselves. Its up to everyone of us to say "if its meant to be its up to me" and quit expecting life to be easy or fair cause it aint.
By davidwayneosedach

7/8/09 at 3:25 p.m.

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Anyone foolish enough to have invested in a time share scam deserves to lose that investment.
By goingbust

7/8/09 at 3:28 p.m.

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Only retards invest in timeshares.
By CynicalObserver

7/8/09 at 4:32 p.m.

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Perhaps GOINGBUST is correct that "Only retards invest in timeshares."

However, the State of Nevada has an obligation to protect consumers, regardless of their level of intellect.

Here's the concern: In States which actively protect a consumer, a timeshare is an ownership interest in real estate. A deed is recorded to the buyer, describing the interest, which reads something like "a 1/52nd interest as a tenant in common in and to the real property described as..."

In States which don't give a rat's patootie about protecting consumers, all that a person buys, when he buys a timeshare, is a contractual right to use one apartment unit in real estate owned by XYZ Development Company. In those states, timeshares are not interests in real estate owned by timeshare owners. The developer perpetually owns the buildings. When the timeshare developer files Chapter 7 bankruptcy in that circumstance, the timeshare owners are nothing but unsecured creditors whose right to occupy one apartment for one week each year simply terminates. In those sorts of timeshare bankruptcies, the "timeshare owners" tend to get NOTHING back, despite all the money they've spent.

So from the point of view of Las Vegas not getting ANOTHER black eye in this recession, I sure hope Nevada's Legislature required that timeshare projects like Tahiti Village and Club de Soleil be "set up the right way" with the timeshare owners collectively owning the real estate, not the developers.

Of course, if Consolidated Resorts timeshare projects in other states were "set up the wrong way", Las Vegas will still get a black eye, because things will be portrayed as a 'crooked Las Vegas timeshare development company' stiffed consumers.

The critical question of "Who owns the company that owns the real estate?" is something the press needs to be looking at right away.
By CynicalObserver

7/8/09 at 6:01 p.m.

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I'm told that NRS 119A.430 now requires title to the real estate for a time share project to be held by a trustee. However, I'm also told that has not always been the case, with respect to older time share projects.

So the key consumer oriented questions, with these bankruptcies, is whether the Nevada time share properties are owned by trustees, and if so were the trustees among the many companies put into Chapter 7 liquidation.
By stevem

7/8/09 at 6:59 p.m.

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there is a very specific profile of who the "greeters" at those kiosks go for.

if you are walking by yourself...they generally will leave you alone unless it's been a slow day.

if you are a 55+ couple OR an african american couple...they come after you like homer simpson goes after a beer truck spill.
By rejco100

7/8/09 at 8 p.m.

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LasVegas2009, it's not that simple when the veterans have a MULTI-BILLION DOLLAR VA & POVERTY PIMP CAMPAIGN telling the world veterans are mentally ill and addicted/alcoholic and are a THREAT TO YOUR BUSINESS and could "SNAP" at anytime, leaving so many down and out. Tell that nonsense to the 24 year old limping homeless veteran sitting by the Riviera daily with his ear missing & huge scar down his cheek with his VA disability papers in hand stamped DENIED; Mike said "Not a hotel in town will hire this "NON-BEAUTIFUL" guy that only needs a job & housing". He left USVets because he told them "I am not an alcoholic and never have been"; they don't like that, back to the streets!
By laniac

7/9/09 at 12:44 a.m.

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I am just happy to not ever hear those annoying Tahiti Village radio commecials anymore.
By PoenaAstorga

7/9/09 at 9 a.m.

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1100 hundred people lost their jobs when the resorts lost their financing, and I feel for them.
By goingbust

7/9/09 at 9:32 a.m.

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"I am just happy to not ever hear those annoying Tahiti Village radio commecials anymore."

Michael Savage never seemed very excited to be reading those ads anyway. The Tanya Roberts ads were much better.
By Unk

7/9/09 at 10:46 a.m.

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Goldman Sachs Group Inc. is cashing in their small-leveraged investment for full price. No doubt paid for by the American Taxpayers under TARP and other tax friendly scams.

The director of ANSY (Consolidated Resorts), Arthur Spector, used to be a :Public Finance Director" at Bear Stearns, you remember them.

Yet another footnote in the Derivative Party-pump/and/dump madness which has all but destroyed America for good.
By gdperson

7/10/09 at 8:13 a.m.

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This recession is not going away like the experts said in 18 months. It won't go away until there's a positive growth in jobs and spending. When's the last time you went shopping in the mall?
By Babyboomer

7/10/09 at 9:25 a.m.

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Thank Goodness their going....
By texassunshinesmile

7/20/09 at 11:45 a.m.

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Ugh! I really hate being a blonde, sometimes. Ok, so I got this stupid legal notice in the mail today, stating that these folks were filing chapter 7...and for the life of me, I couldn't figure out what the heck it all had to do with me. Then, I realized....duh!!! I had won a free trip to Vegas on the radio...still have some time left to take the trip...guess it won't be for free anymore....lol!