Premier Resorts can’t pay S. Carolina owners
September 15, 2009
Condominium owners in North Myrtle Beach, South Carolina received a letter this week dated Sept. 10 explaining Premier Resorts International cannot pay them their share of profits for July and August rentals.
A concerned homeowner faxed a copy of the letter to The Park Record and asked not to be identified.
Park City condo owners received similar letters last spring, sparking a chain of events that led to the local affiliate’s bankruptcy. While Premier Resorts of Utah and its Deer Valley Lodging are now out of business, the parent company and its affiliates in Oregon, Washington, Idaho, Colorado, Hawaii, Mexico and South Carolina continued to operate normally.
In a Utah bankruptcy hearing in early July, company director Bradley Goulding said the affiliates were all able to pay the condo owners they worked with. This prompted suspicion from many creditors since all income from Park City went into a sweep account used by all affiliates.
It now appears Goulding’s statement is no longer true. The letter sent to South Carolina clients reads much like those sent to Park City owners. It begins with a summary of economic woes affecting the tourism industry. It references wildfires North Myrtle Beach experienced earlier this summer that burned adjacent to the Barefoot Resort where Premier Resorts has developed and manages property. It says reservations are down 31 percent from last year. It says the credit crisis that has hurt hospitality businesses that borrowed money to cover expenses during slow years.
Like the letters about the Park City condos, it recounts the measures Premier Resorts has taken to reduce overhead and eliminate bonuses. It also says the company is "now attempting to liquidate other property."
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Then the letter gets to the point:
"In the meantime, however, Premier Resorts is temporarily unable to pay its owners the full amounts currently owed to them under our Rental Agency Agreement."
It says everything is being done to work out a payment plan and schedule.
"The relationships we have with our customers and staff is of the upmost (sic) importance to us, and our greatest fear is that these temporary financial challenges may damage those long-term relationships."
The letter concludes, " we fully expect to see an economic rebound," but asks for patience from the owners. It is signed by company directors Barbara Zimonja and Bradley Goulding.
South Carolina condo owners have speculated Premier Resorts invested heavily in Barefoot Resort over the past few years. The company bought assets from its development partner, has developed a yacht club, and built several amenities to the resort including a conference center completed in late 2007.
For more on the Utah affiliate’s bankruptcy, see related story on page A-9.