Sunterra operating as normal under Chapter 11

After voluntarily filing for Chapter 11 bankruptcy in order to restructure its company's debt obligations, Sunterra Corporation will be operating business as usual.

Although the corporation has placed certain Sunterra entities under bankruptcy, it has not included the Embassy Vacation Resort in South Lake Tahoe under the court filing. Sunterra Europe, Sunterra Pacific, Marc Resorts and RPM were also not included.

"Our only affiliation with Sunterra is with its sales and marketing department, " said Jose Rugamas, Embassy employee. "We need someone to sell our properties."

Since Embassy Vacation Resort is not filing for bankruptcy, there should be no adverse affects on the city of South Lake Tahoe, said Catherine DiCamillo, city attorney. This is because the city collects transient occupancy tax and incremental property taxesfrom the Embassy Resort.

The petition, which was filed in the U.S. bankruptcy court for the District of Maryland, allows Sunterra to continue to operate under normal conditions.

Sunterra opted for the filing and reorganization to eliminate months of uncertainty that could have had a negative impact on the company, a press release said.

The bankruptcy allows the company to run business as usual and implement measures to reorganize.

Although Sunterra is still operating in South Lake Tahoe, some employees have quit because the only property to sell is at the Embassy Vacation Resort.

"You come to work and try to get people to go on tours but they're all booked up for that day or the next," said one former Sunterra employee. "It's frustrating because the Embassy is the only place to send people and most can't wait a week to go on a tour because they aren't here that long."

As a result, one employee was having trouble generating any business. It was also difficult to attract customers since the bankruptcy filing, he said.

"They won't lay anyone off, but they're forcing me to quit by closing up my booth," the employee said. "My only option was to go to another casino which I didn't like and is already filled up anyway. I didn't want to quit but I felt like they weren't being straight with me."


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