Sunterra Corp. has asked a U.S. bankruptcy court to approve the sale of its Carambola Beach Resort on St. Croix to Wyndham International Inc. for $12.5 million.
Sunterra, the world’s largest vacation ownership company with more than 2,000 employees and sales agents worldwide, filed for bankruptcy May 31. Earlier that month, the Carambola resort laid off about 20 people. It currently has a workforce of about 140.
Alan Mallory, general manager of the Carambola Resort, said he was aware of the pending sale but couldn't comment. He said the company's corporate office in Florida was handling the deal. Neither company officials nor their attorneys handling bankruptcy proceedings could be reached for comment Monday.
"We are continuing on the property level with guest services," Mallory said. "We're awaiting a resolution."
Fred Stern, Wyndham International’s vice president for corporate communications, declined to go into detail about the proposed sale.
"We don’t comment on acquisitions that may or may not occur," Stern said, adding that the company looks "at a lot of properties around the country that make sense."
Documents filed recently by Sunterra in U.S. Bankrptcy Court in Baltimore ask the court to authorize the sale of the 28-acre, 150-room Carambola Resort.
As part of its plan to restructure its operations, Sunterra "has begun, among other things, to identify and divest" itself of "non-core assets," court documents state. Towards that end, Sunterra officials have determined "that their resort in St. Croix is not essential to their successful reorganization" and thus have determined "to sell the resort."
The company has been marketing the property since April, with the highest offer coming from Wyndham International, which owns the 300-room Wyndham Sugar Bay Beach Club and Resort on St. Thomas. Wyndham also once owned what today are the Renaissance Grand Beach Resort on St. Thomas and the Westin Resort on St. John.
Since Sunterra purchased the Carambola property in 1997 from the Westin Corp. for $13 million, it has sold a number of time-share interests at the resort that have increased its balance-sheet value to $13.3 million. In the court documents, though, Sunterra says an appraisal of the property hasn’t been done, so the proposed $12.5 million offered by Wyndham represents the best estimate of the current value of the resort and its assets.
While the court documents say that time-share owners will retain their rights to the future use of the property, a St. Croix hotelier familiar with the proposed sale said Wyndham plans to turn Carambola into an all-inclusive resort.
Wyndham will have a 30-day due-diligence period beginning Aug. 17 to study details of the proposed purchase before a hearing on the sale motion in Baltimore on Sept. 15.
Sunterra owes more than $34,000 to local businesses, the majority of it to two contractors. The V.I. government claims the company owes $57,000 in property taxes, which Sunterra disputes, according to court documents.
Wyndham International is the fourth-largest hospitality and lodging company in the United States, with hotels and resorts in North America, the Caribbean and Europe. Among the 268 hotels the company owns, leases, manages or franchises are El San Juan Hotel and Casino and the Wyndham El Conquistador Resort and Country Club in Puerto Rico.
Founded in 1981, the company is headquartered in Dallas, Tex., and is traded on the New York Stock Exchange under the ticker symbol "WYN."
