Claiming to be another victim of the recession, Quintess, a luxury timeshare company based in Broomfield, Texas has this week submitted a Chapter 11 petition for bankruptcy which includes a request to down class and re-categorise their business from a registered real estate company to an elite rental agency.
In 2004 the company’s founders Peter Estler and Ben Addoms enlisted the funding assistance of top tech entrepreneurs along with some of Colorado’s most influential investors and Quintess was born. The company began by snapping up luxury multi million dollar homes, with top of the line amenities in the most desirable destinations across the world from Aspen to Sri Lanka. Now boasting its 90 plus properties in over 50 locations around the globe including 7 in Aspen alone, One would understand the allure of having access to such a high standard of accommodation. With an upfront buy in of up to $350,000.00 as well as yearly costs which run in to the thousands, one would have to be able to afford the finer things in life.
The venture was hung on the success and growth of the fledgling business and with profits slumping with the downturn in housing prices in 2008 this then in 2012 saw the company scrape to fulfil secured real estate repayments of $150 million dollars, forcing Quintess to make a loss on the sale of some of its high class properties.
The submitted bankruptcy package details debts of over $120 million dollars, with the bulk of that being due in six figure denominations to up to 542 wealthy customers who paid huge deposits right before the recession hit. With 152 of these dissatisfied customers already going through the legal process to re-coup monies owed.
A statement from Quintess at the time read:
“Because membership deposits were used to purchase real estate and the value of the real estate imploded and did not return by the time the real estate had to be sold, the debtor does not have sufficient cash on hand or assets to liquidate to pay judgements in these cases if it were to receive unfavourable outcomes. Furthermore, the Debtor does not have sufficient cash on hand to continue to pay legal fees it continues to incur in defending these suits.”
In the past Quintess have attempted to save themselves from bankruptcy by launching new products in the type of holiday packages, points and club’s designed at draining more revenue from their unwitting members with none making the cut and them still being lead down this path.
As documented in the submitted restructuring plan which would see the company’s business model be altered to an elite rental agency, this is in fact hinged on the presumption the existing board members can raise the $6 – 10 million needed to allow them to wipe out the $120 million dollars outstanding to disgruntled members by turning them into shareholders, with them then owning 42% of the overall company.
For any of this to come to light the bankruptcy courts have the final say. With the firm’s assets of $12 million and with outstanding debts of $168 million, the future of Quintess hangs in the balance.