Judging by the number of enquiries we are receiving, probably stimulated by maintenance fee season. There appears to be some confusion surrounding those European timeshare companies who have placed certain of their group of companies into administration. We thought we would take the opportunity to clear matters up.
In the world of timeshare, it is extremely rare for a timeshare company to file for administration in total. Like many organisations, timeshare developers create a number of companies, each charged with the responsibility for a sector of the business. This could involve a management company, a sales company, a marketing company and so on; each is technically a free standing entity. So what does this all mean when you hear that your timeshare company has filed for administration? Let’s investigate.
The investigation
Before we look at specific companies, let’s look at the impact to you as an owner. In basic terms, unless the whole company folds there is no impact. Of late we have seen four highly prolific timeshare companies file for administration, which would imply that the entire company is in financial difficulty, but it doesn’t. Below we will look at the three companies and explain what has happened.
Silverpoint/Resort Properties
The companies concerned were Silverpoint Vacations SL (“Silverpoint”) and Excel Hotels & Resorts SA (“Excel”), after the administration process they both entered the voluntary liquidation stage of the administration process. It should be remembered that Silverpoint were only the sales company responsible for selling timeshare in Beverly Hills Club, Beverly Hills Heights, Hollywood Mirage and The Palm Beach Club.
Excel on the other hand is a different story. The company had in the past been responsible for the management of the resorts which included the collection of maintenance fees. The primary role of the appointed administrator is to see if the companies that have filed for administration can be saved.
Miraculously, the administrators’ being Alvarez and Marsal based in the Cayman Islands pulled Excel from the jaws of death and did a deal with the Ona Group, a hotel and timeshare company based in Barcelona, to take over Excel. The result of this meant that timeshare owners’ rights were preserved and everything including maintenance fees carried on as if nothing happened.
At this point we should confirm that it’s Silverpoint that’s the subject to millions of Euros in claims for the selling of timeshare in contravention of Spanish statute law, not Excel. To put it bluntly, Excel will continue and make money but keeping Silverpoint going would cost millions in unpaid claim awards so for Alvarez and Marsal it was a no brainer, liquidate the dodgy one and keep the good one.
Anfi, Azure and Club la Costa (CLC)
We could just cut and paste the comments on Silverpoint because the administration process for Anfi, Azure and CLC are pretty much identical with the exception that in their administration process there was no management company included. Both have used the administration process to try to dodge court orders for, once again, selling timeshare in contravention of Spanish law.
Anfi and CLC have management companies in place that are not involved in the administration, so everything carried on as normal. With Azure, again with the assistance of Alvarez and Marsal, a new management company in the form of VCMS was created, so for former Azure owners it’s life as normal. From the ashes of Azure, the phoenix that is VCMS rises.
Do you still own?
Yes, Yes and Yes again. These insolvencies by no means affect your actual timeshare ownership. You can still book your holidays, that’s if you can find availability, you still have to pay your maintenance fees as before. As we stated earlier, globally companies set up offshoots, some for exploiting “creative accounting” others for the ability to simply get rid in the case of falling profitability or losses, timeshare is no different.
Bordering on fraud?
The gut feeling says yes, but if the system legally allows for such actions to take place then the answer is no, and guess what? The system does allow. Questions we ask frequently at TCA are along the lines of “how do successful companies go from hero to zero in a matter of weeks?” and “why do the law makers allow the actions that follow to happen?” we certainly have the questions but have no real answers.
Collectively it’s impossible to second guess the amount of lawfully awarded compensation that has not been paid, but millions for sure. Silverpoint, Anfi and CLC are all party to playing the system to their full advantage.
TCA comment
All entities mentioned in this article are extremely cash rich and are still carrying on as if nothing has happened, having simply severed the gangrenous limb that caused the problem. Luckily, lawyers are representing their clients to the extreme and are not lying down and playing dead, they are fighting tooth and nail to ensure legally awarded claims are settled.
Until such time as the final nail goes in the bankruptcy coffin then it’s still perfectly feasible to lodge a claim, that said there is obviously a sell by date, so if you are affected and haven’t started the claims process then sooner rather than later would seem to be advisable.
Building a reputation in business is one of the most important factors, although it appears that the companies mentioned above don’t care. In the case of both Silverpoint and Azure, the powers that be have run for the hills long ago and excluding claims, all timeshare owner benefits remain intact.
In a roundabout way, Anfi are similar, except the controlling shareholder is IFA Lopesan, a German/Spanish company. IFA have a portfolio of prestigious hotels and a good reputation, one wonders how the Anfi situation may affect this.
With CLC, there is a confused scenario. According to information imparted by owner, Roy Peires in an interview with ex BBC Royal Correspondent, Jenny Bond, CLC has joined the Wyndham franchise programme, the upshot of which is that all CLC resorts have been rebranded as Wyndham or associated companies such as Ramada. Wyndham are by far the largest timeshare group on the planet and at the time of writing have not completed any form of takeover of CLC; however that’s not to say they won’t. Should this happen, and given the short memories of most, CLC will fade into the history books with the Wyndham reputation being untarnished, why? Because they have done no wrong and for sure won’t accept any liability for the erroneous doings of the former management.
Would it be too righteous to state that Silverpoint, Anfi and CLC have committed criminal offences by the continued issuing of timeshare contracts in contravention of Spanish statute law? On the side of fairness, these crimes would not be described by a court as heinous, but for a judge to declare that the contracts issued were illegal and order refund of purchase costs, they must have been. Just for the record how does dictionary.com explain illegal?
No room for doubt there!
Despite thousands of judgements and millions of Euros awarded as compensation, these organisations have used perfectly legal mechanisms to avoid their liabilities, or have they, only time will tell.
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