Island One amended plan confirmed despite equityholders' rejection

By Lisa Kerner

Charlotte, N.C., May 4 - Island One, Inc.'s amended plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Middle District of Florida, according to an attorney familiar with the case.

The company had made several changes to its first amended plan and had asked the court to confirm it, despite the fact that holders of Island One equity interests and Crescent One equity interests did not vote to accept it.

The equityholders are not entitled to a distribution because general unsecured creditors will not be paid in full.

The company made a similar plan "cramdown" motion in April in connection with eight unsecured claims classes' non-acceptance of the plan.

As previously reported, the company filed its first amended plan in March to incorporate the terms of a plan sponsorship agreement with Timeshare Acquisitions, LLC.

Under the proposed changes to the first amended plan,

• The company's majority lenders will contribute $1.15 million;

• Holders of IOI Funding general unsecured claims will receive a share of distributions from an unsecured creditor trust. Previously, these creditors were slated to receive no distribution; and

• Holders of St. Croix One general unsecured claims will receive a share of distributions from an unsecured creditor trust.

Island One, an Orlando, Fla.-based timeshare resort development and hospitality management company, filed for bankruptcy on Sept. 10, 2010. Its Chapter 11 case number is 10-16177.

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