Raintree Resorts says bonds accelerated, to start talks

New York, July 8 - Raintree Resorts International, Inc. said the trustee for its senior notes has accelerated the debt, making it immediately due and payable, after the company failed to make a $6.1 million interest payment within the 30-day grace period.

The coupon was originally due on June 3 and the grace period expired on July 3, according to a filing with the Securities and Exchange Commission.

Raintree Resorts said it expects to meet with holders of the senior notes this week to discuss restructuring the debt or other possible solutions to the company's high level of leverage, including the possible sale of some assets.

The Houston, Texas company noted it previously signed an agreement with Mego Financial Corp. doing business as Leisure Industries Corp. under which Leisure Industries would acquire some Raintree subsidiaries and businesses.

The agreement expired on June 20 but the two sides are continuing with efforts to determine whether some parts of the transaction can be completed in July.

A sale to Leisure Industries would give Raintree funds to meet the $6.1 million interest payment and additional working capital.

Under the proposed agreement, Leisure Industries would then assist Raintree in securitizing its receivables and restructuring part of the senior notes.

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