ILX Resorts' disclosure statement OK'd; confirmation hearing Nov. 10

By Caroline Salls

Pittsburgh, Oct. 5 - ILX Resorts Inc. received court approval of the disclosure statement for its plan of reorganization, according to a Friday filing with the U.S. Bankruptcy Court for the District of Arizona.

The plan confirmation hearing is scheduled for Nov. 10.

According to the disclosure statement, the plan calls for the use of cash generated by post-bankruptcy operations, the extension of maturity dates in connection with secured claims and the issuance of general unsecured debentures due Dec. 31, 2016 to general unsecured creditors.

ILX said a majority of secured claims will be paid in full or refinanced by Dec. 31, 2012 with the remainder being paid in full or refinanced by Dec. 31, 2014.

The company said it also expects to repay the debentures by Dec. 31, 2014.

ILX said it will obtain the cash needed to make plan payments by selling note portfolios.

In addition, non-productive assets may be sold as market conditions improve to enhance liquidity and potentially accelerate debt reduction.

Creditor treatment

Treatment of creditors will include:

• Holders of administrative claims and tax claims will be paid in full in cash;

• The maturity of the Textron Financial Corp. secured loan will be extended to Dec. 31, 2012 and the claims will accrue interest at 8½%. ILX will make monthly payments of principal and interest based on a 20-year amortization of the secured claim at a 4% interest rate, and the difference between the accrual interest rate and the interest rate paid will be deferred and added to principal annually;

• The Irwin Union Bank, FSB claim, the M&I Marshall & Ilsley Bank claim and the Resort Funding LLC claim will be extended to Dec. 31, 2014, and monthly interest payments and yearly principal payments will be made;

• The company will make monthly payments of $7,076 on the secured claims of U.S. Bank, NA, including interest at the contract rate of 8.625%, and the maturity of the related loan will be extended to Dec. 31, 2014;

• The company will make interest payments on Steele Foundation, Inc.'s secured claim and Arizona Bank & Trust Co.'s secured claim, and the maturity will be extended to Dec. 31, 2014;

• Brentwood Credit Corp., GMAC Financial Services and Netbank Business Finance will receive payments on their secured claim under pre-bankruptcy agreements;

• Maricopa County, Yavapai County, Coconino County, Navajo County, Gila County, Mohave County, Pima County, St. Joseph County, Ind., and Larimer County, Colo., will receive quarterly payments of principal and interest at a statutory rate plus 2% over a one-year period on their secured claims;

• Holders of trade creditor unsecured claims, unsecured claims arising from rejected executor contracts and unexpired leases, unsecured disputed, contingent or liquidated claims, claims of outstanding check payees and general unsecured claims will receive new debentures. These creditors can also elect to receive the lesser of $100 or 10% of their claims; and

• Holders of allowed equity interests will retain their interests and receive the balance of any assets or proceeds available after all senior claims have been paid in full. These creditors will not receive a distribution before 2015.

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.

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