As most owners at Anfi will know Björn Lyng was the founder of the Anfi Group timeshare resorts situated in Gran Canaria, upon his demise the family sold their 50% stake in the company to IFA a subsidiary of Lopesan who run hotels in Spain, Dominican Republic, Germany and Austria.
The amount realised from the sale was reported to be in excess of €41 million which apparently represented a significant discount. The sale came less than two years after Anfi were involved in a landmark judgement in the Spanish Supreme court. In January 2015 a Canary Island court ruled that Anfi had repeatedly broken the law and mis-sold timeshare.
The case established that Anfi paid no regard to the 1994 EU Timeshare Directive whose implementation was meant to protect buyers of timeshare. This cavalier attitude continued with Anfi paying scant regard to Spain’s subsequent Law 42/98 enacted on 5th January 1999. This law offered much greater consumer protection when compared with the earlier EU Directive. Initially a cooling off period of 10 days became law, later to be extended to 14 days. During this period no monies could be paid. Terms greater than 50 years and failure to give accurate information of what exactly was purchased were also outlawed. Floating weeks and points were also deemed illegal. Despite this Anfi carried on as if nothing had changed.
The 2015 court case stated that the particular Anfi contract in question was deemed illegal. The court ordered an immediate annulment together with full refund of the purchase costs. This milestone case prompted hundreds more owners to take legal action against the resort leading to a raft of claims and hundreds of compensation awards totalling tens of millions of Euros.
A little history
With the purchase of the Lyng shareholding, Lopesan effectively jumped into bed with their previous rivals as business partners in the island’s biggest timeshare resort. Along with Lopesan the Santana Cazorla Group owned the other 50% of Anfi. As a point of interest Santana Cazorla also own a so called “golden share” which gives a preferential position (double vote) over its partner in certain matters, such as the formulation and approval of accounts, the appointment of auditors etc . This of course leaves Lopesan with little control or input.
It has been reported that a boardroom battle that has been quietly raging behind the scenes this came to a head at the Mercantile Courts of Las Palmas, Gran Canaria, pitting the two shareholders, Santana Cazorla and Lopesan, head to head in what could be a crucial battle for control of the Anfi Group.
See you in court
The future of two companies within the group, Anfi Sales SL and Anfi Resorts SL are at stake. Lopesan are arguing for their involuntary bankruptcy, the case was heard before Canarian magistrate Alberto López Villarubia whose task is to try to decide if these companies have sufficient assets to pay off their short-term debts or if their insolvency should be declared, which would mean their assets being managed by a court appointed bankruptcy administrator.
The involuntary bankruptcy proceedings were requested by a company named Isla Marina SL which is also a Lopesan subsidiary and furthermore is one of the creditors of Anfi Sales SL and Anfi Resorts SL from whom they claim they are owed around €30 million.
Anfi International BV the company purchased from the Lyng family heirs is also controlled by Lopesan since its purchase in September 2016. The Lopesan group owns 50% of the shares of Anfi Sales SL and Anfi Resorts SL. The other half belongs to Santana Cazorla, however as mentioned above the Santana Cazorla “golden share” gives them a preferential position over Lopesan in various matters. In the event of discrepancies, it is up to Santana Cazorla, for example, which lawyers can act on behalf of the two companies in legal proceedings. In the recent hearing held the lawyers for Anfi Sales SL and Anfi Resorts SL positioned themselves against a declaration of bankruptcy, claiming that the other party (Lopesan) is motivated by “spurious interests”.
More bad news
Beyond the millions of Euros owed for upheld court cases there are other significant financial irregularities within the Anfi group including various bank loans where repayments are in default which amounts to some €30 million of outstanding debt.
José Luis Trujillo, the Director General of Anfi said that there are various other options for the creditor(s) to collect the amounts owed. One of them would be to foreclose on properties included as collateral in the initial loan, these are now valued at more than €116 million, almost four times the amount of the debt. He added that the group in fact owns more than 60 real estate assets with a total market value of €307 million, though €205 million of those properties are subject to mortgage charges, so could not be used to cover debts. Trujillo said that the Board of Directors has already discussed the possibility of selling some of these assets to pay off the debt, but that this option has met with opposition from Lopesans directors.
Further troubles on the horizon
Separate to the enquiry into Anfi’s commercial dealings and economic position, another court in Gran Canaria is currently investigating the Anfi Group for the alleged concealment of assets, in an attempt to avoid seizures. These proceedings were opened after the Las Palmas Prosecutor’s Office filed a complaint during the summer of 2019 against Anfi Sales SL and Anfi Resorts SL for the suspected crimes of complicating and avoiding the payment of court-awarded damages to timeshare owning claimants awarded recompense against Anfi by the courts.
If found guilty; Anfi face the possibility of confiscation of assets or at worse compulsory insolvency. Investigations by the Public Ministry began with the submission of letters from the lawyers representing clients with court awarded judgements. Contained within the letters were comments regarding obstacles allegedly placed by the company in order to avoid payment of amounts awarded in numerous judicial proceedings since that very first Supreme Court resolution issued in January 2015. The case continues under investigation.
Comment
It’s fair to say that the debacles highlighted above are not going to go away. Despite the size of Anfi there will be no sweeping these troubles under the carpet. Between the feuding board of directors and the current investigatory court case to the claimants who are rightfully owed millions in court awards Anfi are facing serious problems. From what was once the most prestigious timeshare developer on Gran Canaria to have been complicit with this current state of affairs is nothing short of scandalous.
Anfi boss Snr Trujillo made clear that timeshare constitutes the group’s main source of income and that it is quite different from the hotel business (a dig at Lopesan). He said it‘s an industry associated with “luxury and trust”, which is why bankruptcy of any part of the group “would affect” the marketing of these products and put jobs at risk. The company currently has about 700 employees.
Whilst these observations may have been true when Björn Lyng first conceived the idea of creating Anfi, we fear that whereas luxury may still exist, trust in both Anfi and the timeshare industry in general has either been seriously damaged or lost altogether given the above.
Anfi Sales SL is a founder member and is still a current member of the Resort Development Organisation (RDO). We find it disconcerting that no mention of the problems surrounding Anfi has been published by the RDO or its associated organisation created to assist timeshare owners, European Resort Owners Coalition (EUROC).
RDO showcases a number of articles regarding Anfi as may be seen here, none of which even remotely mention any of the problems faced. EUROC makes no mention of Anfi at all. Given the uncertainty for timeshare owners created by a resort and developer of this magnitude, plus the thousands of Euros in unpaid court awards, we thought this would surely deserve a few lines of explanation by the RDO or EUROC, obviously not.
If you are an owner at Anfi and are troubled by these developments we would like to hear from you.
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