BILTMORE VACATION RESORTS AND MERISTAR HOSPITALITY CORP. SUE EACH OTHER

Staff Writer - The Timeshare Beat

August 31, 1999
Meristar Hospitality Corp.(NYSE: MHX) and Biltmore Vacation Resorts (OTC BB: BVRI) are duking it out in federal court in Las Vegas.

On March 4 of this year, Biltmore signed an agreement with Meristar to purchase the St. Tropez All Suites Resort Hotel at 455 E. Harmon Ave, presumably for conversion into timeshare suites, for $30 Million. By June 1 the deal had fallen apart, and on July 16 Meristar filed suit against Biltmore.

Meristar's lawsuit alleges that Biltmore was supposed to deposit $1.1 Million in escrow prior to May 26, but when that date arrived only $400,000 had actually been deposited. As a result, Meristar charged Biltmore with being in breach of the agreement and terminated the deal.

Biltmore retaliated on August 5 with a countersuit claiming that its efforts to get financing for the deal failed after Meristar officials refused to allow them to conduct due diligence on the property. Biltmore has asked for an order forcing Meristar to give back its $400,000 down payment, plus $1 Million in punitive damages.

Due diligence is the process of obtaining sufficient reliable information about the proposed acquisition to help you uncover any fact, circumstance or set of conditions that would have a reasonable likelihood of influencing your offer or decision to acquire the business.

Biltmore Vacation Resorts is an RCI-affiliated timeshare-resort developer with corporate headquarters in Las Vegas, Nevada. The Company has three subsidiaries: Sage Design Builders, Inc., Dynamic Design Architecture, Inc. and Nevada Realty and Management, Inc. While most timeshare companies are primarily sales and marketing organizations, Biltmore and its subsidiaries can perform every function from design and construction to the financing, selling and operation of timeshares, hotels, office and residential products. The company is currently in the early stages of developing the Biltmore Vacation Village in Bullhead City, Arizona, just across the Colorado River from Laughlin, Nevada.

Washington, D.C.-based MeriStar Hospitality Corporation owns 117 principally upscale, full-service hotels in major market and resort locations with 29,468 rooms in 27 states, the District of Columbia and Canada. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Westin, Radisson and Doubletree. MeriStar Hotels & Resorts leases or manages 217 hotels with 45,439 rooms in 34 states, the District of Columbia, Canada and the U.S. Virgin Islands