Grand Vacation Club Ltd is a product constructed and linked to Diamond Resorts International Inc (DRI). Some may know them as Diamond (Europe) Ltd, however that purported enterprise is a trading name of DRI. That said the contractual arrangements referred to in this report may have changed over time. This may have occurred if the Directors have given its assent to variations and alteration to the legal documents and other associated cluster contracts which have flowed from the enterprises which Diamond Resorts operates.
DRI are a profiteer, they like others who engineer holiday products and arrange a cluster of companies so as to purportedly deliver those holiday accomadation products. Below is a breakdown of one of those cluster company arrangements. Many of the original names have been changed and re changed by DRI and as such, some of the present names could have been changed again (to the best of our knowledge and belief and at present they are accurate). Transparency is not obvious when investigating such matters as they are not readily publicised and are not immediately evident.
When you take the time to digest the makeup of the companies and the literature which identifies those companies, consideration has to be given as to;
Why they spend vast amounts of money of the creation of this network?
Why there are so many name changes?
Why there so many parties?
Protecting the profit received and/or earned springs to mind. This being a real consideration again you have to consider;
Why would you have to generate such a complex cluster arrangement?
Each Company /Club is conducting different tasks, in different names and in different jurisdictions for a single purpose. That purpose is to deliver a holiday apartment to Consumers for short stay periods. These entities are subject to cloaking (purposeful of non purposeful), alterations, restrictions and controls. It’s no wonder that these arrangements beggars believe in some circles.
These contracts have been sent to independent Barristers and they have explained that they are very complex, lack transparency and are strangely worded. If these are comments coming from senior legal experts and logical trained thinkers, you have to ask, how is a lay man expected to wade thought all the different clauses, sub clauses and parties to come to a real understanding as to what it is they are buying or being contractually bound to?.
It’s a known fact that when in a sales presentations the clauses and contractual arrangements are not fully explained to the Consumers. It is also a fact that the salesmen make many promises and gender many images of great times ahead. (in the event that you do pay over the expensive membership fees and sign the contracts).
The Consumer whilst in the pressure kettle of a presentation will be faced with a slick talking Salesman-who has a purpose to sell you something. That something will benefit the Salesman and the company they represent. Whether a Consumer receives a corresponding benefit is for them to decide. In making that decision consumers should have time to read the entire documentation, the underlining burdens and purported benefits the product presented offers, as well as to the terms and conditions the consumer will be bound to obey. Naturally the Salesman will paint a fantastic picture of the product and will avoid any situation whereby the Consumer is given the raw truth as to the entire underlining arrangements. To do so will not only bring enlightenment but an explanation of the terms which will befuddle the Consumers mind.
The author is of the clear opinion that to digest these documents, interpret them and understand the contents-will take many days and will require substantial legal consideration.
In short, you (the consumer) are alone, unaided and being sold to by a possible and equally ignorant individual, who may also have no idea what those contractual arrangements, obligations and burdens may impart on you.
The Salesman is trained and controlled by their ultimate employer who wants sales and which will deliver a profit. A salesman is not a businessman, neither a lawyer nor an accountant. He will be trained by his masters and will be subjected to their representations. The Salesman might believe those representations and could be merely advancing the thoughts of his employers. It also could be viewed uncommersial to have a Salesman educated as to the negative aspects of the contractual arrangement he is pedalling.
If such salesmen are trained, licensed, authorised and regulated as suggested by Graham Williams, it could be trigger for a fundamental change in the selling. If that were to happen the cluster of companies and arrangements as detailed below could be vacated and miss-selling could be avoided and profit protection eliminated.
The Cluster Company Arrangements
Note; this is a report by the TCA who expresses its opinion based on what could be a selection of information.
The Cast
Grand Vacation Club Ltd (GVC) co Reg No. 2930567. Is now subject to a change of name and is now called Resorts European Collection Limited (the same company Reg No.02930567). Its head Office is registered at: Citrus House, Caton Road, Lancaster, LA1 3UA.
Its accounts are filed up to 2014. The Company type is, a Private Ltd by Guarantee w/o Share Cap and has been in existence for 21 years (Incorporation date being 19/05/1994). The net Worth of the company is £0. Memberships (not shares) in this Company are sold to Consumers. One of the Directors/ officers is Susan Crook
This Company is worthless, has no share value and is subject to a limited liability of £1.00. It is controlled by its articles of association and many special resolutions which are contained in 48 pages of complex Clauses. The Company is controlled by its Directors of which the maximum number is 5. Three of those Directors are appointed and controlled by the founder member as seen in Clause 20. Full control of the Company (which you become a member of), is afforded to the founder member-not its members (You). The Company has no shares, is valued at “nil” and you, (in reality) are only an ordinary member. You are not permitted to “vote” in any meeting. That said, you may vote in 4 circumstances but 2 of those circumstances your vote is controlled (as you the ordinary member can only disagree with the motion Clause 5 (a)). The founder member may vote in such meeting and their vote allocation will be determined by the Management Company. The assessment of the number of votes the founder member is entitled to is final clause 5 (b).
The Management Company who acts on behalf of GVC is.
Grand Vacation Management Ltd This company head office is located at Pine Lake Resort Carnforth. Nr Lancaster. Lancashire LA6 1JZ and is a UK registered company.
This company is now named Diamond Resorts Management Ltd 01833365 Registered Address: Citrus House, Caton Road, Lancaster, Lancashire, LA1 3UA. Accounts Filed up to 2011. It is a Private limited and has been in existence for 30 years (Incorporation date 17/07/1984) it has declared it holds £27 million in Cash and a net worth £0.00. One of the Directors is (for referance purposes only) again Susan Crook
Other Previous trading names of this company were:-
Sunterra Management Limited changed its name on the 15 Oct 2007.
Woodford Bridge Country Club Limited changed 16 Jan 2001.
Grand Vacation Company Limited changed 20 June 2000.
Woodford Bridge Country Club Limited changed 31 May 2000
In the “legal documents” it also names Grand Vacation Management Ltd a company incorporated in Jersey-having its registered office at Westaway Chambers 39 Don St, St Helier, Jersey, Channel Islands. No Company registered number has been disclosed. Strangely this non English domiciled Company submits to the jurisdiction of the English Courts not the Jersey Courts. Therefore confusion exists as to which company is the actual management company?
That said the Management Company was commission on the 21st of July 1994, just over a month after GVC was incorporated. The agreement to manage commenced on the 19th of May 1994 (the same day as the incorporation and a month before the agreement was made for it to act and the management company). The term of management will be until the agreement ends, in 2054. Unless they commit a material breach! That breach will be determined by the Company which is controlled by the board which is controlled by Founder member. Clearly this is not an arm’s length appointment. What is equally astounding is that a Company which collects such vast amounts of money and trades as a profiteer is again worthless.
The enterprise who set up the GVC Ltd is referred to in the legal document as the Founder Member
On page 9 par 4 (a) it is expressed that Sunterra (Europe) Ltd is the founder member and enjoys a privilege position in the company, its affairs and constitutionally rights retained offers special rights over other ordinary members. Sunterra (Europe) Ltd Co Reg 3220072 is now called Go Sunterra Ltd. One of its Directors is Susan Crook
Its previous names where;
- Flanesford Management Ltd changed on the 3/3/2005
- Mawlaw 309 limited changed on the 11/4/1997. The Company is a Private Limited Company; its net worth is £0.00
Sunterra Europe Limited is located at 199 Che Du Val Fleuri, 06250 Mougins France Co Reg 14472278.
Grand Vacations Company Ltd (GVCL) is also a contender for being the founder member and is based at citrus House Caton Rd Lancaster Lancs LA1 3UA. A point’s certificate we hold is exhibited to a purchase agreement and was sold on behalf of the founder member GVCL. This document suggests (contrary to the legal document that GVCL is the founder member). Page 6 of the legal documents back up this as the founder member is described as GVCL. This company has been re named as Diamond Resorts (Europe) Ltd IE 906023 Registered Address: Suite 6, Rineanna House, Shannon Free Zone, Co Clare, Ireland Co Reg 607024 Accounts Filed up to 2013 (Type Other) Age 17 years (Incorporation date 01/03/1998 Net Worth £187,014,118. Again one of its Directors is Susan Crook.
Assuming that the second contender is as worthless as the other companies (which on a balance of probability seems to be the case). The founder member and its associated worthless companies control GVC and its ordinary members. What is more bazaar is that if the founder member is worthless and introduces accommodation assets to GVC.
Asset Appraisal
Clearly the management company have 94 million in the bank but that money is held on behalf of others as the accounts write of the current asset (94 million) and values the management company at nil. The founder member who introduces the inventory which consists of accommodation would, in reality want to be paid for those assets yet the founder member declares its company is worthless. There are many numbers both negative and positive in a set of accounts and it is very rare, in truth it is practically impossible to be worth “nil”. The founder member via a points system delivers accommodation to ordinary members. Interestingly the founder member is worthless and has remained worthless for at least 5 years.
Clearly another unnamed company either owns the inventory or the founder member pays-to others-sums of money to lease or borrow the accommodation and that money is equal to all the money the founder member receives. To complete the opinion the founder member exacts a control over a worthless company, maintained by a worthless company and has no equitable interest in the assets it purports to introduce to GVC.
To complete the picture there are many other companies registered near Lancaster and all appear to be owned or operated by Diamond Resorts.
Companies near to Diamond Resorts (Europe) Ltd are listed below:-
VACATION CLUB PARTNERSHIPS LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
DIAMOND RESORTS TITLE LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
LSI DEVELOPERS LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
CLUB VIA LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LA1 3UA.
PINE LAKE LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
DIAMOND RESORTS TRAVEL LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
ANDALUCIAN REALTY LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
DIAMOND RESORTS (GROUP HOLDINGS) PLC – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
PINE LAKE MANAGEMENT SERVICES LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
DIAMOND RESORTS EUROPEAN COLLECTION LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LA1 3UA.
DIAMOND RESORTS FINANCIAL SERVICES LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
DIAMOND RESORTS CLUBS (EUROPE) LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
L.S. INTERVAL OWNERSHIP LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA.
VACATION RESEARCH LIMITED – CITRUS HOUSE, CATON ROAD, LANCASTER, LANCASHIRE, LA1 3UA
The founder member is not an ordinary member and holds a special position in GVC. It controls the board, is able to vote and introduces-non transparent-accommodation-it infers it owns. It does however own the issuable points it sells. The “issuable points” are justified by the management company and those issuable points attract voting rights which permits the founder member to exercise a control over company business and affairs. The founder member appointed the trust company which is in partial subjection to the founder members authority. The founder member granted to the trust company many rights and benefits.
That said:-
The Trust Company which holds shares and other property (the right to use accommodation assets) for and on behalf of the Consumers is First National Trust Company Ltd FNTC. FNTC (in the legal document) holds the share and property of Grand Vacation Club Ltd and its Reg Office International House, Castle Hill, Victoria Rd, Douglas, Isle of Man.
GVC has no shares and the property is defined in the legal documents at page 29 par 1.15;
“Property means the shares together with all other property (real or personal) which may from time to time be transferred to or otherwise vested in the trustee to be held for the benefit of the members of the company from time to time upon the trust provisions set out in this deed”
Excluding the shares of which there are none, on page 30 par 3 the property is described as “something which secure the members rights of ownership and occupation of accommodation asserts”. These rights are contained in Pages 1-28.
The property shall not be charged or encumber Page 30 3.2
Other property is not described or detailed and is not referred to or disclosed in the legal document. This-in our opinion-is nonsense. There are no shares to hold and there are no assets. In the alternative those assets either belong to another or they are charges, subject to a lien, lease and or undisclosed obligations.
FNTC is a First Names Group Company. First Names Holdings (Isle of Man) Ltd 249,999 (at £1) ORDINARY 100.00
“First National Trustee Company Limited 4th Floor, 45 Monmouth Street London WC2H 9DG First National Trustee Co (FNTC). Described as a global resort and property management Company based in the Isle of Man. It claims to have appointed two new members to its senior management team. FNTC manage the entire process for management fee collections so you receive the money quickly and efficiently. With extensive collections experience gained over the years, FNTC has a tried and tested approach. FNTC recognises that clarity of communication is important and can advise developers on Consumer payment incentives and put measures in place to save you unnecessary costs”.
Those are the parties.
Grand Vacation Club Ltd (GVCL)
Members Clause 4
The board of Directors are permitted to have the power to admit members however only if the acquire a points right. For the sums paid you (the Consumer) are admitted onto the registered members . You are not a shareholder. Each member has to agree to abide by the articles of the Company and the rules and regulations of the legal documents.
You can cease being a member by giving 7 days notice. That said-you are still liable to pay management charges, however you the Consumer are not entitled to recover your points.
You can attend and speak at meetings, but you shall not have a right to vote at those meetings. There are only 4 exceptional circumstances whereby a Consumer will be allowed to vote 2 of which Consumer can only vote against a resolution 5 a (i-iv). That said in any vote the founder member can attend, speak and vote on any issue. The number of the founder’s member’s votes (it is able to cast) is calculated by the issuable points rights held by it. That number is determined by the Management Company. Its assessment is final. Therefore the founder member votes are allocated by a Company (Miss Crook is a Director of), and used by another company she is also a Director. Therefore she and the other connected Directors will say how many votes they themselves have and will vote the way the connected parties wants and that is final.
The point system is as follows.
Clause 6. The founder member shall transfer the accommodation assets to the club. Those assets will be held by the trust for the benefit of the GVC. Therefore as Miss Crook and others control the club and they will transfer the assets to GVC which they control.
The periods of weeks allocated to the accommodation assets however will be subject to the administration of the management company (the founder member controls) and they will determine the total number of points relative to the holiday periods. Once determined the management company can re-determine the number of issuable points. You the ordinary member do not have a say in that process. The issue cannot be voted on without a sanction of a resolution which the founder member has 3 votes out of 5 and in any event the ordinary members don’t have a vote as it’s not a exception contained in clause 4 a.
The points now being determined have to be issued and they are issued by the founder member. They alone have the right to issue points. Clause 6 h. The price of those points will be determined by the founder member and the price charged is at the sole discretion of the founder member. The accommodation assets shall be held by the trustee who has absolute discretion to determine. That said, the founder member is entitled to request a return of accommodation assets if issuable points reduce and/or for other reasons. If those accommodation asserts are returned the issuable point’s rights will be cancelled.
The management company looking after the points system can charge a fee (clause 7 c) if the founder member has claimed money off an ordinary member and the founder member claims it has not been paid, the founder member can cancel the membership . This therefore permits the founder member to tell the GVC to cancel your membership. The right to cancel shall be a founder member right.
Transfer points. Ordinary members shall not be allowed to transfer points until that ordinary member pays a fee which is not identified. You cannot transfer any points unless you have paid the undisclosed fee to the founder member who never sold those points’ rights to you in the first place. You have to pay any indebtedness claimed including loans. You pay to get in and you pay to get out. The exits fee is not established.
The FNTC and management company will maintain the company records and they will administer the points system. The trustee will maintain the company’s records. You are only entitled to an extract of your own records and you will have to pay an undisclosed fee (clause 11).
The club shall obtain off the management company a report. (Clause 12)
Management charge clause 13
The club shall buy a projected management cost estimate from the management company; the costs will be based on the management agreement only. That charge is not binding until the board has approved it but the founder member controls the board and the management company. If not agreed it will be referred to the GVC auditors appointed by the board again and controlled by the founder member. That auditor decision will be final then members will be invoiced. If the projection was wrong they will charge you more, if they have charged you too much it will be carried forward to the next estimate. The debt will be to the management company not GVC clause 13 d and you have 60 days to pay. That said if the founder member claims the money that debt is payable forthwith. In addition to the management charge, the ordinary member will pay all other management charges to the management company (clause 13 f) if the management company raise a claim that is in their words proof of the amount due.
Only Directors can call general meetings and only if the founder member grants permission. Members can call meetings subject to the provisions of the act. The act is the Company Act 1985. As only Directors can call Directors meetings, ordinary members cannot call them as they are not Directors. (Clause 14 b)
No business can be conducted at any meeting unless a quorum is present (2 Directors are identified as a quorum).
The chairman will determine if an objection is raised whether or not the member can vote or not.
In the event of variation in demand, the points grading can be re-determined by the management company (clause 6i).
Consumers pay substantial amounts of money to buy membership into this company. They do not own shares-as there are none-and the shares which are referred to as being in trust with FNTC are none existent. The other property referred to is the right to occupy certain property. However those suggested rights can only be granted if the Consumer joins a point system and pays a maintenance fee linked to the points. The calculation of the maintenance fee is located on page 6 and is as follows: – A= (B-FXD)/E OVER C
The total fee for maintenance is calculated by the linked company, They cannot be sacked or dismissed without the consent of the founder members who could be 1 of 2 enterprises and is at best elusive (who the founder member is actually vague). As the vague founder member has 3 votes on a committee of 5 it is impossible to overturn the founder member that again has no stake in the GVCL as the founder member is worthless.
The Management Company who assessed the maintenance fee (globally) is worthless and again holds no equitable value. The maintenance company has a life time contract and that agreement is wrote into the legal pack.
Voting
The Consumer members are identified as ordinary members, they have no votes at any meetings with the exception of 4 identified issues. Two of which they can vote anyway they want, but the remaining 2 issue which they can vote on are restricted as the Consumers members are not permitted to vote the way they may wish to.
Points
Consumers in this cluster are sold a points right by someone and on behalf of the founder members. In short, the seller is an agent of the founder member. The founder member then creates the number of issuable points and that calculation is verified by a connected party company. Who then issue them to the ordinary member to spend as they wish? The spending of the points however is very restrictive and the only product available is the accommodation inventory which is assigned to the GVC and held in trust for GVC members. The points are then cashed in by the maintenance company.
Therefore, we have an issuer and seller of points rights which when owned allows you to buy points from the management company employed by GVC who obtains them in turn from the founder member. When obtained they are credited to you and you can cash them in and in exchange for accommodation occupancy rights.
Clearly these points are acting as a currency.
According to the Electronic Money Regulations 2009/110/EC, electronic money is money to the value as represented by a claim on the issuer, which is stored electronically issued upon receipt of funds of an amount not less in value than the monetary value issued and accepted as a means of payment by undertakings, other than the issuer.
There are 3 types of currency schemes and the DRI falls in type 2. In that real money is exchanged into vertual money which is used to aquire real goods and services.
By way of clause 2.2 of the CMR 2011, e money value represents a claim on the issuer that is stored electronically, issued upon receipt of funds for a purpose of making payment transactions accepted as a means of payment by persons other than the issuer and not excluded by regulation 3.
In the GVC case the founder member is the issuer of electronic money, it is sold by the management company to you and then you cash that electronic money in with the management company who is not the issuer. Therefore it’s our opinion that the founder should be regulated and it appears they are not. Therefore, they could be operating outside the regulations and in the event that they are and the FCA agrees they will be committing a financial crime and subject to clause 15 enforcement proceedings. Owners can make a claim under the financial ombudsman if they so chose to do so.
Notes in the GVC legal Documents:-
The point’s rights are “the number of points which a member is entitled to be credited with each year”. Page 7 Points rights
A “point” is defined as unit use periods are graded, and which is issued to members who can exchange them of occupancies rights.
“Occupancy rights” means: the right to occupy and use accommodation during use periods in accordance with the “point system”.
The point system is a system of acquiring point rights and the allocation of points
Therefore a system exists whereby a Consumer (if they become a member) is entitled to acquire a unit to exchange for a very particular product and that is holiday accommodation only.
The point’s rights are sold by agents acting for the founder member sees purchase agreements (2 founder members).
To complete the picture, unusable point’s rights are points held by the company GVCL or Sun terra as the case maybe. Page 8 Unusable Points Rights.
To get points and despite the purchase agreement you have to agree to become a member of the GVCL (Page 9. 4 (a). If however, a Consumer ceases to become a member they will still own point’s rights and will be responsible for the forward liabilities however the continuous ownership of the “point’s rights” will not entitle them to exercise any rights or receive any allocation of points.
So when a Consumer buys the “points right” if he/she does not want to become a member of GVCL, they will not be given any points to exchange but will be liable for the costs applied to those points.4 (d) ii.
You have to become a member.
There are two types of membership “Ordinary members” and “founder member”.
In this company you have shareholders, Directors and Members (2 classes)
The shares in GVCL are all held in trust by FNTC. In the trust document 1.2 GVCL appoints the trustee to act on behalf of the company and its members clause 3 states the trustee hold the property (means share and all other property) other property is suggested as rights of ownership and accommodation assets.
The Directors Clause 20 state the number of Directors are not less than 3 and not more than 5. Clause 20(a) the funder member will be allowed to appoint up to 3 of them, other members will be entitled to appoint up to two other Directors.
Directors shall manage the GVCL. Clause 18(a) including delegation to the management company such of the companies powers clause 18 ((b) ii 2 and 3)) proper regulation and administration of the points system the exercising of members occupancy rights 18 (b) iii apply the funds to pay the expenses of the GVCL.
Under clause18. (b) Vii Directors and the management can vary the points and point rights, remove them from members and their decision is final that said the member is still liable.
All Directors must retire each year (except the founder member) clause 20(e).(g) no other Director can be appointed unless he is recommended by the Directors and within a window of 14-35 days before the meeting.
Directors voting 1 vote each in the case of a tie the chairman will have an extra vote Directors who are not resent can receive votes from those not present if the absentee appoints a Director to do so. Clause 24
Members
Ordinary members can attend meeting and speak but shall not have a right to vote. Except for in 4 situations clause 5 (a) i-iv. Appointing and termination of Directors where resolutions are referred to ordinary members do have a vote but, they are not permitted to vote against resolution in 2 of those situations.
In any event members will have 1 vote for each point’s right. 5 b the founder member will have 1 vote for each issuable point’s right held by it the right will be certified by the management company. Whose decision will be final!
The management company is Grand Vacations Management Ltd registered in Jersey 39 don St Hillier
This company operates the points system which issues the points and point’s rights the exchange system. It can charge and determine the fees of maintenance, it can also delegate any responsibilities to anyone it thinks fit. It receives 15% in addition to all charges in clause 6-7.
Finally the management company retains intellectual and property rights in relation to the point system in its governance (Clause 13).
The Shares are in trust and the power is vested in the trust. The company is directed by the founder member as they have more Directors and each other Director has to step down each year. If other founder member or Directors are absent the missing Director’s vote is transferable to the one present.
The directing mind is that of the founder member. That founder member appears different in the two cases shown. The share votes are mute and vested in the management company who run the collection of money via an off shore bank account in the FNTC Isle of Man the trustee. The management is off shore and in Jersey.
The management company, the seller and the founder member are all linked companies
It appears to me that the structure is designed by FNTC so that they receive the money when the product is sold.
The Time Timeshare Consumer Association is a not for profit organisation. It has extensive costs in supporting timeshare Consumers and as such, we rely upon the generosity of individuals, communities and businesses so as to provide a continuation of the free services that we offer.
There is no need to bring us a present
There is no need to thank
We have a need for funding
Which you could kindly deposit in our bank.
TSB Bank Account no: 12435268 Sort Code: 77-26-28
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