Looks like the next domino in the ILX chain has fallen!
Resort operator ILX Inc. files for bankruptcy
by Dawn Gilbertson - Mar. 3, 2009 12:00 AM
The Arizona Republic
Timeshare resort operator ILX Inc., stung by plunging timeshare sales and a surge in buyers' loan delinquencies, filed for Chapter 11 bankruptcy reorganization Monday.
The small Phoenix-based company, best known for its Los Abrigados Resort in Sedona, also blamed a recent "unanticipated reduction" in its financing due to instability in the financial markets.
The company's stock will continue to trade on the American Stock Exchange. But it could end up worthless, as stockholders last in line for repayment in bankruptcy reorganizations. Shares fell 9.4 percent Monday to 48 cents. ILX stock had been as high as $6 a share in the past year.
ILX, which operates eight timeshare resorts in Arizona, one each in Colorado and Indiana and one in San Carlos, Mexico, said it expects the Chapter 11 filing to enable the company and its resorts to continue business as usual.
Timeshare operators, like hotels, airlines and other travel businesses, are hurting because consumers have less disposable income in this weak economy. That means less money to spend on a timeshare or, in the case of those who already own a week or two at a timeshare resort, to pay off their loan.
ILX has not filed its financial results for the fourth quarter ended Dec. 31. In the nine months through Sept. 30, it reported a net loss of $8.1 million, compared with a loss of $801,194 a year earlier. Revenue plunged in the same period to $17.8 million, one-half the level of a year earlier. The biggest culprit: ILX's estimated uncollectible revenue, which is deducted from total revenue, ballooned to $15.2 million from $839,097 in the first nine months of 2007 as it reviewed past-due accounts and the likelihood of collecting from customers who were current on their loans or had just purchased a timeshare.
Timeshare sales fell 19 percent in the nine-month period, to $14.9 million from $18.4 million. The average sales price fell 3.5 percent to $17,157.
