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KING OF PRUSSIA, PA-Locally based Epic Resorts, once forced into bankruptcy by creditors owed more than $300 million, sells to the highest bidder, Las Vegas-based Sunterra Corp., for $25 million in cash. The acquisition, which will be unsealed and confirmed in court on Oct. 7, is expected to close by the end of this month.

Epic encompasses six resort locations: Hilton Head, SC; Daytona Beach, FL; Scottsdale, AZ; Palm Springs, CA; Lake Havasu, AZ, and Las Vegas. The points-based Epic vacation club has approximately 16,000 active members, and there are also approximately 4,500 owners of Epic timeshare weeks at the Hilton Head and Daytona Beach properties.

Sunterra’s acquisition includes management rights to the club and four of the Epic resorts, inventory assigned to the club, development land at the Hilton Head property and unsold inventory at the resorts.

The Epic properties take Sunterra’s portfolio to 93 worldwide. One of the world’s largest vacation ownership companies, it has 87 affiliated resort locations in the US, Europe, the Caribbean, Hawaii and Mexico.

“We believe this (acquisition) will be beneficial to the members of both the Sunterra and Epic communities, and we intend to continue our search to make additional strategic acquisitions,” says Nicholas Benson, Sunterra’s CEO. He also says Sunterra will disclose plans for integrating Epic into its existing business following the court’s confirmation of the winning bid.

Epic’s troubles began with a charge of fraudulent telemarketing, leveled in 2000 by the FTC, and went well beyond mounting debt. Club members and timeshare owners were not alone in accusations of mishandled funds. After Epic’s owners took the company from involuntary to voluntary bankruptcy, the court-appointed trustee, Anthony Schnelling of Bridge Associates, joined the chorus.

At one point, his relationship with the owners grew so contentious that he leveled a $30-million lawsuit against them, charging them with fraud. In the wake of the suit, this January the owners stepped down from the board, the lawsuit was dropped, and Schnelling proceeded to clear Epic’s properties of liens and encumbrances, making way for the company’s sale at auction.

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