We have been advised that on the 27th May 2015 Madeira Regency Palace Hotel released a communication to its consumers to state that that hotel is potentially closing and will cease trading on the 30th June 2015 leaving 110 employees (in a place with not a lot of work) left to find new jobs.
In August 2014 the reported debt to the Social Security Institute of Madeira (ISSM) was €16.3 million, but in March the total was reported to have been reduced to €15.4 million. At this point reports claimed that there had been some progress made in securing the outstanding social security contributions accumulated over the last fourteen years by the companies controlling the Regency Club and the Regency Palace hotels.
It is thought that at least part of the debts had been secured by the provision of collateral in the form of mortgages and other guarantees to “safeguard the reimbursement of debt by the ISSM” specifically that the ISSM would assume ownership of 27 properties should the outstanding amount not be settled. “Cunha Santos & Camachos” (Regency Palace) are the believed to be the ISSM’s largest single debtor.
It seems that although the debt was reduced , it wasn’t enough to secure Regency Palace and an application was made in the Judicial Court of Funchal to close the hotel.
Madeira Regency Palace has advised the TCA that ” if there is a purchaser then it is not necessary to purchase the debt as well and yes we may need refurbishment as Madeira has been in the deep grips of a recession for many years now and banks have been in no mood or position to advance monies for such things (something I think UK experienced too not so many years ago) but what we lack in new carpets we more than make up for with caring and hospitality and this has been echoed by so many of our friends since this happened the support by out Members has been overwhelming”.
In the event that a buyer doesn’t save the day, there is a light at the end of the tenebrous tunnel and consumers involved in the Regency Palace hotel must be made aware that all is not lost!
If the 30th June comes around and the hotel is declared closed, you may be entitled to compensation by way of a claim made under Section 75 of the Consumer Credit Act 1974. If you purchased your timeshare by of credit card or loan you may be entitled to claim back all of the money lost in Madeira Regency Palace.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk