A US Bankruptcy Court judge here will decide by Apr. 1 if the nine-year-old, locally based firm, which once had a staff of 7,800 employees, can do a financing deal for $210 million with Greenwich Capital Financial Products of Greenwich, CT. Greenwich Capital is a wholly owned subsidiary of the Royal Bank of Scotland Group.

The money would be used to shave some of the company's debt and re-start its sales machine. Sunterra hopes to be out of Chapter 11 by year end, relying on its $1 billion in assets stated on its bankruptcy petition. But lawyers representing the creditors aren't taking that projection to the bank.

Jay Alix & Associates of Southfield, MI, a turnaround specialist, is guiding Sunterra through its financial morass. The strategy is to sell off at least 30 of the firm's 89 resorts within the next nine months. Two time shares already have been sold.

Company officials couldn't be reached for comment by GlobeSt.com's publication deadline on how the company became mired in red ink after two mercurial acquisition and sales years in 1998 and 1999, but background information filed by Sunterra with the bankruptcy court pieces together a picture of a company unable to cope with runaway growth.

Sunterra was created in 1992 by a local group of real estate investors pooling nine time share properties. Early successes led to the company going public in 1996. The firm's buying spree started in 1997 and ended abruptly with the last reported quarterly statement to the Securities and Exchange Commission for the period ended Mar. 31, 2000.

The writing was on the wall as well as in the books, underlined in red. The company lost $15.6 million versus a profit of $10 million in the comparable 1999 period.

Delinquent accounts totaled $43 million. Sunterra trimmed its work force to 6,300 and stopped several construction jobs including its half-completed $22-million headquarters building in the former 100,000-sf Montgomery Ward center in east Orlando.

The losses continued and in May 2000, Sunterra voluntarily filed its Chaper 11 petition to get two groups of creditors off its back temporarily. One group claimed it was owed a total of $600 million; the second, $250 million.

Bankruptcy lawyers familiar with Sunterra and similar Chapter 11 reorganizations tell GlobeSt.com, on condition of anonymity, "it's almost a sure thing the creditors, and not Sunterra's current principals, will be running the company when all of the paperwork is put away" and the case is closed.