The global economic crisis is a ghastly event for each and every business in every country throughout the world. In the timeshare industry, this did not only results to low sales but also made the timeshares unattractive to most consumers. On the other hand, the current owners also are trying to get out of their timeshare contracts. The timeshare companies in their pursuit to survive during this chaotic time are doing numerous cost reducing and other restructuring measures. But for those who are unlucky to withstand this economic climate cannot escape the final blow to file for bankruptcy.
One such vacation timeshare company in Redington Shores filed for bankruptcy six years after it originally filed for Chapter 11 reorganization. Starco Ventures Inc., which lists its directors as Calypso Vacations Ltd. of Freeport, Grand Bahama, filed for Chapter 11 reorganization with the U.S. Bankruptcy Court’s Middle District of Florida last Nov. 25. It claims assets and liabilities of up to $66 million.
According to the court documents, Starco’s top unsecured creditor is GEM Capital Ltd. and Resort Capital Ltd. of Freeport for $65 million. GEM Capital held the mortgages on the timeshares operated by Starco, and as part of a 2003 bankruptcy proceeding by Starco, it was set to take title on units Starco owed money on. Under the agreement, Starco can continue selling timeshare weeks but would receive only 50% of the net sale price. The other half goes to GEM and its assigned owners.
While a number of vacationers refuse to own a timeshare and opt for other alternatives, the current owners on the other hand are trying to get rid of their timeshares. Some even hire a timeshare transfer company such as the Transfer Smart just to get rid of it. These results to low sales for most timeshare companies and unfortunately some did not make it and consequently filed for bankruptcy.