ILX Resorts liquidation plan takes effect with Sept. 1 sale closing

By Caroline Salls

Pittsburgh, Sept. 7 - ILX Resorts Inc.'s plan of liquidation took effect with the closing of the sale of substantially all of the company's assets on Sept. 1, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The plan was confirmed on July 23 by the U.S. Bankruptcy Court for the District of Arizona.

The company's assets were sold to ILX Acquisition, Inc. The sale included an assumption of $23.8 million in debt to creditor Textron Financial Corp. and a payment of $5.9 million in cash.

A liquidating trust will be created under the plan, and real property, residual rights to proceeds and other assets not sold will be transferred to the trust.

Under the plan:

• Administrative claims and priority claims will be paid from sale proceeds and cash on hand, as will pre-confirmation and post-confirmation operating expenses;

• Secured claims will be paid from the proceeds of the sale of the assets subject to their lien, and some secured creditors will receive the collateral securing their claims;

• The liquidating trust will be created for the benefit of unsecured creditors;

• A stock pool will be created for the benefit of holders of ILX stock, and Textron will transfer $2.1 million of its own funds to the stock pool.

For every dollar distributed under the stock pool, preferred shareholders will receive two-thirds of the distributions and common shareholders will receive one-third, provided that preferred shareholders will receive a maximum distribution of $2.00 per share, and the balance of any money available for distribution will go to common shareholders;

• Holders of equity interests, which are classified under a separate plan class than holders of ILX stock, will receive no distribution;

• The company's corporate shell, related income tax benefits and some merchant deposits will be retained for the ILX stock pool; and

• Causes of action against Textron will be settled and released, and Textron's claim and the validity and priority of its security interests will be allowed.

According to the 8-K, all of the company's preferred and common shares have been cancelled, and ILX has instructed FINRA to cease quotation of its common stock on the over the counter bulletin board, effective Aug. 31.

Phoenix-based ILX Resorts acquires, develops and operates timeshare resorts primarily in the western United States. The company filed for bankruptcy on March 2, 2009. Its Chapter 11 case number is 09-03594.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.