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ORLANDO-Sunterra Corp., struggling to do business under Chapter 11 of the U.S. Bankruptcy Code at 89 worldwide time-share resorts, is banking on Gregory Rayburn of Jay Alix & Associates to fix its financial woes.

The locally-based company, with a former global work force of 7,800, is asking the federal Bankruptcy Court in Baltimore, MD to approve Rayburn as president and CEO. Lincoln Morrison, the firm’s current chairman, would be vice chairman.

Jay Alix has offices in New York, Chicago and Detroit. The firm’s successful turnaround roster includes Zenith Electronics Corp and National Car Rental.

Sunterra filed for Chapter 11 protection May 31 after defaulting on a $6.5 million payment due on its $140 million in senior notes. The firm also wrote off $43 million in delinquent accounts, a move that contributed to its fourth-quarter 1999 loss of $58.4 million.

To keep it operating, Sunterra has told the court it has obtained an interim credit line of $25 million from Ableco Finance, with an option to extend the amount to $53 million.

Meanwhile, Sunterra has placed its planned new $22 million headquarters in the former 200,000-sf Montgomery Ward retail building up for sale. The company bought the two-story building at 2500 W. Colonial Drive for $3.7 million after state and local governments promised $1.5 million in economic incentives.

Time-share sales activity has stopped at the firm’s three metro Orlando resorts and at properties in Miami; Fort Lauderdale, FL; Hilton Head, S.C.; Lake Conroy, TX; Steamboat Springs, CO; and Santa Fe, NM. In Orlando, Sunterra operates Cypress Pointe, Embassy Vacation Resort Grand Beach and Polynesian Resort.

The bankruptcy petition does not include Sunterra subsidiaries Sunterra Europe and Sunterra Pacific.

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