Diamond Resorts Corp. has moved one step closer to owning bankrupt ILX Resorts and its Los Abrigados Resort & Spa in Sedona.
U.S. Bankruptcy Judge Redfield T. Baum Sr. issued a ruling July 23 approving the sale of ILX Resorts, which filed for Chapter 11 under the U.S. Bankruptcy Code on March 2, 2009.
According to court documents, the official purchaser is ILX Acquisitions Inc., a holding company founded in mid-January by Diamond Resorts.
Although Diamond is based in Nevada, ILX Acquisitions Inc. was founded in Delaware, a state which charges lower corporate taxes and keeps the names of shareholders confidential.
On Jan. 6, Diamond Resorts filed a “stalking horse offer” — a bid on a company’s assets from an interested buyer chosen by the bankrupt company.
In the deal, Diamond would assume all of ILX Resort’s debt in exchange for acquiring all of its property, including three Sedona area resorts employing around 300 people.
The July deal would clear ILX Resorts of all liens, claims and debts — ILX Resorts owed $34.5 million, primarily $29 million in loans to its largest creditor, Textron Financial Corp.
In the deal proposed in June, Diamond Resorts would pay $29,672,251, comprised of cash and assumption of liabilities.
In exchange, it would assume control of all of ILX’s assets, including its nine resorts; a 10th one it operates in Mexico; all its sales and marketing centers; real estate holdings including five acres in Bullhead City and 2.1 acres in Puerto Peñasco, Sonora, Mexico; physical property including equipment, company automobiles and furniture; resort management contracts; and mortgage loans.
Diamond Resorts would also gain ownership of the Heart of Sedona — a 14.174-acre parcel officially titled U.S. Forest Service Parcel A — that USFS put up for public auction in March 2005 when the Sedona Ranger Station moved to a new site south of the Village of Oak Creek.
Based in North Las Vegas, Diamond Resorts is one of the largest time-share and vacation resort companies in the United States. It owns or manages more than 150 resorts in Asia, Australia, the Caribbean, Europe and North America, including the Ridge on Sedona Golf Resort in the Village of Oak Creek and Sedona Summit in Sedona.
Sedona Springs, the Villas of Sedona and the Villas at Poco Diablo, all in Sedona, are club-affiliated resorts.
One of the largest private employers in the Verde Valley, ILX Resorts currently owns Los Abrigados and The Inn at Los Abrigados, both in Sedona, and Premiere Vacation Club at Bell Rock in the Village of Oak Creek.
It also owns resorts in Tucson, Payson, Pinetop, Las Vegas, Colorado, Indiana and San Carlos, Sonora, Mexico.
