What happens to a pyrimide scheme when the s*** hits the fan? Watch FINOVA. When Kemper Marley's agent, Ned Warren, ripped off a half billion dollars with land fraud in Arizona commentators speculated that that was about as big as any financial crime could get. But Charlie Keating and Fife Symington did not believe that and they together ripped of $3.5 billion from S&Ls here. But what the company that not only owned SOUTHERN AIR TRANSPORT but many of Barry Seal's planes as well is doing today makes these others look like shoplifters. Brian The Arizona Republic: Record Display Six Arizona resorts owned by time-share giant Sunterra Corp. continue to operate despite the company's firing of 900 employees and filing for Chapter 11 bankruptcy protection.<P> Orlando-based Sunterra operates five Sedona properties and the 228-room Scottsdale Villa Mirage resort near the Fairmont Scottsdale Princess.<P> ''All of the resorts that we own and operate are operating as usual,'' said Lin Morison, Sunterra chief executive officer. ''The layoffs were here at headquarters and elsewhere in our system.''<P> A telemarketing office in Scottsdale was closed and 95 jobs were eliminated, company spokeswoman Brenda Adrian said.<P> The company has nearly 650 employees in Arizona, including 209 at the Scottsdale resort and 204 at a sales and marketing office, she said.<P> Sunterra filed for Chapter 11 protection on May 31 in U.S. Bankruptcy Court in Baltimore, listing $1.058 billion in assets and $827.6 million in debts.<P> The company has obtained $53 million in financing to continue operating during the reorganization.<P> Sunterra's bankruptcy filing not only raises questions about the company's ability to build and sell more time-share units but it also poses a risk for one of its largest creditors, Scottsdale-based <b>Finova</b> Capital Corp., according to a recent bond credit report by Merrill Lynch & Co.<P> Merrill Lynch estimates Finova's exposure to Sunterra at more than $100 million. Despite the risk, the report said that Sunterra's debt should not hinder a sale of Finova Capital's parent company. Finova Group Inc. announced in early May that it is considering a sale or merger.<P> Sunterra's sales dipped 12 percent in the first quarter of 2000 to $81.6 million. The company lost $15.6 million in the quarter or 43 cents per share, down from a profit of $10 million or 27 cents per share a year ago.<P> Advertising and marketing costs also soared in the first quarter. Those costs totaled 60.2 percent of time-share sales this year, compared with 46.1 percent in 1999.<P> Sunterra wrote off $43 million in bad debts last year, which contributed to a fourth-quarter loss of $58.4 million.<P> In mid-May, Sunterra announced that it did not make a scheduled payment of $6.47 million on a $140 million debt.<P> In the wake of its bankruptcy filing, Sunterra has halted sales at some resorts to cut costs but its most profitable sales offices remain open.<P> Sunterra is one of the world's largest owners and operators of time-share resorts.<P> Since going public in 1996, Sunterra grew from nine resorts and 25,000 owners to 89 resorts and more than 250,000 owners.<P> Sunterra's northern Arizona properties include the Ridge on Sedona Golf Resort, Sedona Springs, Sedona Summit, Villas of Sedona and Villas at Poco Diablo. There are a total of 518 rooms built or under construction at the Sedona area resorts and 197 employees.<P> It has properties in North America, Europe, Mexico, the Caribbean and Asia.<P> Memo: Reach the reporter at Peter.Corbett@Arizona Republic.com or (602) 444-4815.<p> <P>Copyright 2000 Phoenix Newspapers Inc. <P>Record Number: 0006170289 </td></tr></table> ------------------------------------------------------------------------ <B>SALESFORCE.COM MAKES SOFTWARE OBSOLETE Secure, online sales force automation with 5 users FREE for 1 year! </B><A HREF="http://click.egroups.com/1/2658/6/_/475667/_/961572183/">[ Click Here ]</A> ------------------------------------------------------------------------
