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EXHIBIT 99
Sunterra Corporation
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NEWS RELEASE
Contact: Gregory F. Rayburn
(407) 532-1022
Sunterra Names Turnaround Specialist Gregory F. Rayburn
As Chief Executive Officer
ORLANDO, FLORIDA (October 11, 2000) The Board of Directors of Sunterra
Corporation today announced the appointment of Gregory F. Rayburn as Chief
Executive Officer and President. Rayburn, 42, is a principal of the
internationally known corporate turnaround firm, Jay Alix & Associates (JA&A),
which has been engaged, subject to bankruptcy court approval, to lead the
company's turnaround efforts.
The company also announced that T. Lincoln Morison has resigned his
position as CEO and President, and will assume the role of Vice Chairman of the
Board of Directors of the company to assist in the transition. "Lin provided
leadership and strategic direction to Sunterra during a difficult and critical
time. The company appreciates his service," said J. Taylor Crandall, Chairman
of the Board.
"The Board of Directors and the management staff welcome Greg and the JA&A
professionals to the team. Given the serious issues Sunterra faces as we move
forward in our turnaround efforts, we believe the Company will be best served by
a CEO with extensive experience in restructuring activities. Mr. Rayburn's team
brings deep experience in leading companies through change and in successfully
navigating the Chapter 11 process," said Crandall.
Rayburn has more than 20 years experience leading financial and business
turnarounds in a variety of companies, and in private equity investment. He is
a former Chairman and CEO of Silas Creek Retail Inc., and a former partner with
Arthur Andersen where he helped to create and develop their corporate recovery
services practice.
"My mandate is to provide leadership, expertise and a sense of urgency to
the company's turnaround process," said Rayburn. "I look forward to getting to
know the managers and employees of Sunterra, who will be a critical part of the
turnaround. In addition, I will work closely with the company's outside
constituents and stakeholders in seeking to build a consensual process."
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Sunterra filed for reorganization under Chapter 11 of the U.S. Bankruptcy
Code on May 31, 2000 in Baltimore, Maryland. All of the 89 resorts operated by
the company remain open for use by owners, Club Sunterra members, exchangers and
guests.
Jay Alix & Associates is a leading firm in the business of offering
underperforming and troubled companies both consulting and interim management
services to lead and support implementation of operational turnarounds,
strategic repositioning and debt restructuring. They also provide IT strategy
and turnaround - valuation services and litigation consulting services. The
firm, which has offices in New York, Chicago and Detroit, has extensive
experience with large complex restructurings, including Zenith, Service
Merchandise, Umbro International, Oxford Health Plans and National Car Rental
Systems.
Sunterra Corporation, the world's largest vacation ownership company, has
89 resorts throughout North America, Europe, the Caribbean, Hawaii, Latin
America and Asia. Sunterra also manages 18 condominium resorts and hotels in
Hawaii; and operates Club Sunterra, the world's most extensive points-based
vacation system.
Sunterra Corporation became a publicly traded company in 1996 and has
subsequently grown from nine resorts to its current worldwide network of company
owned and managed resorts. In addition, during this period its member base has
expanded from 25,000 owners to more than 300,000 owners and members. Sunterra
Corporation's website is www.sunterra.com.
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Cautionary Statement Regarding Forward-Looking Statements. Certain
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statements in this release may constitute forward-looking statements subject to
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Although management believes that any forward-looking statements in this
release are based on reasonable assumptions, actual results may differ
materially from those expressed in any of the forward-looking statements.
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