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[2011] DRI to Buy Monarch Grand Vacation

Discussion in 'Diamond Resorts International - DRI' started by Bill4728, Oct 29, 2011.

  1. Bill4728

    Bill4728 Moderator

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    This letter was just sent to all Monarch Grand (MGV) owners.

    So it looks like MGV is no more and DRI has bought out another TS company.


     
  2. Bill4728

    Bill4728 Moderator

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    Now I'll need to learn about DRI ;(
     
  3. timeos2

    timeos2 Tug Review Crew: Rookie TUG Lifetime Member

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    Interesting as the letter seems to say the sales functions are being sold to DRI but the management will stay with MGV. That doesn't sound too good as management is a cash cow & they have not shown any signs of quality or value in that role as most Developer based managements don't tend to be good at in the owners view. The owners would likely be better off with an independent management rather than continuing with MGV in that spot. The sales portion really doesn't affect current owners. They are already done with sales (except for upgrades which don't tend to be a good deal no matter who is offering it). That may also mean that owners will not get "regular" access to DRI propertied without some type of additional purchase into that system. As I read this it sounds like MGV plans to keep operating their rather sparse internal trade system even after the potential sale is complete.
     
  4. pgnewarkboy

    pgnewarkboy TUG Member

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    The letter is intentionally cryptic. The clearest part is "that a substantial portion of assets have been sold".
     
  5. jbercu

    jbercu TUG Member

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    How to split Siamese twins

    John:
    You are suggesting that MGV is not run by the independent owners. The letter from MGV suggests that they are independent of the sale organization and a non-profit organization representing the owners where the owners vote for a Board.

    The sales organization which is being sold owns units at the same resorts that are currently run by the MGV non-profit organization. The non-profit organization holds its deeds in a trust. The sales organization is not in the trust but owns enough units to control the resort. Diamond is not in the business of owning units in resorts they do not manage. Diamond would not have touched this deal if they did not have the full cooperation of the “Independent” MGV club. The future is clear. The MGV club will be rolled into the DRI club. The deal will close in 2012, and the MGV 2012 maintenance is due in 2011. The MGV statement is self-serving. They do not want the owners to walk away before the DRI deal unfolds and the DRI-MGV merger is pitched.

    In addition, MGV owns units in resorts they do not own or manage. DRI will have to take control of these resorts or make a deal to spin the residual units.

    In short, DRI is taking over. There is no independence.
     
  6. T_R_Oglodyte

    T_R_Oglodyte TUG Lifetime Member

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    So was/is MGV on the edge of bankruptcy?
     
  7. dougp26364

    dougp26364 TUG Review Crew: Veteran TUG Member

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    apparently, enough so that they can file for chapter 11 to facilitate a quick buyout. This looks a lot like the deal with Mystic Dunes in Orlando.

    Sunterra has a great system for themselves. The problem was, Sunterra managed itself into bankruptcy by not maintaining their resorts, which was secondary to not charging MF's high enough to maintain the resorts which was secondary to their philosophy on encouraging sales and not concentrating on their management contracts. The difference between Sunterra and DRI is DRI appears to pay more attention to the management contracts and the bottom line. DRI is not afraid to charge higher MF's and maintain the resorts.
     
  8. rjreichert

    rjreichert Guest

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    Takeover

    I know that DRI will take over the development, but for us Monarch Grand Vacation owners, does that mean our ownership will be transfered to Diamond Resorts? Does that mean Monarch Grand will be no more and we will be Diamond Resort owners? Or will Monarch Grand Vacations remain independent from Diamond and continue as we were?

    Thanks for answering!!

    By the way, Bill, did you get a letter in the mail? I found out by just looking at the MGV web site.
     
  9. NPetris

    NPetris Guest

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    Pacific Monarch sale to DRI

    I received notice in an e-mail from MGV of the bankruptcy and sale of PMR to DRI. I was not surprised by the bankruptcy as it appeared that construction projects were stalled at both the Las Vegas(Cancun)and Cabo Azul resorts. I was hoping Worldmark/Wyndham would be the buyer. I e-mailed both MGV and DRI asking what changes may be in store for MGV owners. They both said that operations will continue with MGV. I wonder if this will be like Wyndham's takeover of Trendwest keeping Worldmark as the owner's association. Oh well, I guess we can only speculate at this point.
     
  10. csalter2

    csalter2 TUG Member

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    DRI is your new owner

    If DRI is taking over then Monarch will become a part of DRI. This will give DRI a whole new base of prospective owners to purchase points in the DRI system. When I stayed at Los Abrigados this summer, I was asked to attend a presentations for DRI. I have noticed this pattern at all DRI resorts that have been taken over. Don't be surprised by this. You have a new king. :)

    More than likely Monarch owners will have increased maintenance fees. When DRI took over Sunterra the maintenance fees increased significantly, but the properties' maintenance also improved and rooms were renovated. I did not have a problem with this since I could see the improvements. The increases have not been as significant as when DRI first took over. In fact last year the increase was less than my Marriott increase. I am hoping this year's won't be too bad either.

    For me, I still feel a little lucky with the DRI takeover. No, I did not like the maintenance fee increases like everyone else. However, I originally owned when it was Epic Resorts. They let the properties go down the tubes. Then Sunterra bought Epic and I had some new choices. I liked that. I stayed at the Point at Poipu when Sunterra took over and loved that property. When DRI took over, I began taking advantage of Polo Towers, Grand Beach, Cypress Point and other properties that DRI either owned or were affiliated with. In any case, I love DRI's options.

    Yes, many people complain about stuff. I know the Europeans complain a lot, but they have a different Club than we do in the US. However, once the maintenance fees shock was absorbed, many have not complained as much about DRI. Now that special assessment of almost $6000 that the Point at Poipu has been hit with has them up in arms and likely so. If someone wanted me to pay that much at one time, I would have a heart attack. The other issue that owners are having is that DRI's maintenance fees for owners are higher than what DRI is renting them for to non owners. You place that alongside seemingly limited availability and complaints will come.

    However, those who wait until late to make reservations in very popular places can expect to see limited availability. In most cases, if you have the 13 month home collection advantage, you can get a reservation where you would like except southern California. That is why getting Monarch will be good because it will give DRI members access to some resorts in southern California which is valuable during summer.

    I would advise Monarch owners to be careful if they are turning their owned units into Club points. First, make sure that if you go to points that you receive enough points so that you can at least stay in your resort in the units that you currently have whenever you can today. That is a mistake that I made when I went from Epic Resorts to Sunterra and I actually thought I had covered that. When I was with Epic, I could stay in a 2 bedroom villa during prime time/Christmas and New Years week with the points I had. However, when I joined Sunterra, I was not able to get those two weeks in a 2 bedroom because my transfer of points was enough for most weeks but not all weeks. Thus, I lost value. You want to pay close attention to that.

    Also, I would advise Monarch owners who want to join the Club to look at the point values in various seasons prior to going into a sales presentation so you will know how much your unit will be worth and how many points you may need to stay at various properties in the DRI collection. Please note that DRI Hawaii properties require a lot of points to stay for a week particularly the nice ones like Ka'anapali Beach Club and the Point at Poipu.

    I still like the DRI system, I love the options. However, I would advise Monarch owners to really review this site and the DRI website prior to going into any sales presentation as DRI salesman will give heavy pressure for you to buy when you first go in to see them about your new owner. Don't rush into anything. Take your time and know what you want. If you want flexibility to stay for shorter amounts of time and you own a week, learn about the system and what it will take for you to benefit from it.

    There are many of us who have had different experiences positive and negative or both with DRI, use us for information.

    Just a few words to newcomers who have no choice in the new owners. ;)
     
  11. T_R_Oglodyte

    T_R_Oglodyte TUG Lifetime Member

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    I would be amazed if that did not happen.

    I expect that it will play out almost identically with how the DRI collections work. Which is, if you are a MGV member you can reserve within the MGV system with exactly the same rights, privileges, and obligations that you have now.

    Meanwhile, DRI will try to sell DRI club memberships to to MGV owners. What DRI will sell is that MGV owners swap their MGV ownerships for an interest on one of the DRI trusts - I would imagine that would be the "US Collection". After the swap, the DRI trust would take over ownership of that MGV membership.

    Thus the MGV ownership base would include both the traditional MGV ownerships as well as ownership by whichever DRI trust acquires the ownerships. Over time, as more MGV owners convert to the Trust, the trust becomes a steadily increasing ownership bloc. It will not take long until the DRI trust controls enough votes that it can effectively set policy. Given that about 80% of owners never bother to submit proxies,the Trust will generally be able to dominate the resort when it comprises as little as 5% to 10% of the ownership base.
     
  12. csalter2

    csalter2 TUG Member

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    It looks like you and I were thinking similar thoughts at the same time. :)
     
  13. timeos2

    timeos2 Tug Review Crew: Rookie TUG Lifetime Member

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    Looking at past "integration's" one by DRI and others it is rare that they combine an existing group into the main system without any additional cost. They may offer some limited access or simply keep the group as an external system that operates within itself and only gets limited access to the larger DRI system(s).
     
  14. rjreichert

    rjreichert Guest

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    Thanks All!

    Thanks for your comments and info. I want to learn as much as possible. We are with points with MGV. We own a significant amount of points. Do you think we will have to pay extra to get under the DRI ownership, a transfer fee, etc.??

    Since we own a lot of points, does DRI have premier benefits-owning certain amount of points getting you more priveledges at different levels?

    We are going to a Diamond Resort in Sedona on a getaway right before Christmas and plan to go to a sales presentation to learn about DRI. I want to go in with as much knowledge as possible so I can ask the right questions. I know I won't always get a truthful answer, so that's why I'm leaning on you TUG people to help me.

    How much are your maintance fees per point. Some that I've seen posted are anywhere from .09-.15 cents per point. Also if owning in the US collection, gives you the same priveledges to reserve say in Hawaii and Europe? Or is it like an exchange? Can the MF fees be paid annually or quarterly?

    What is your estimate for 155 MGV points, 2 bdrm in peak season or a garden view rm in Cabo Azul vs, DRI points. Just wondering how many points I may get with DRI with my MGV points.

    Thanks again with all your info!! You are all a great help.
     
    Last edited: Nov 8, 2011
  15. dougp26364

    dougp26364 TUG Review Crew: Veteran TUG Member

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    We actually owned with DRI before they purchased Sunterra. The points system is Sunterra's, not DRI's. DRI charged us $2,995 to join the "new" points overlay system.

    If we'd have purchased trust points and converted our deeded weeks to one of their trusts, they'd have waved that joiner fee.........but we'd have bought another $5,000 worth of points and we'd have had to pay the trust fund management fee in addition to the points overlay annual membership fee, which is now up to $277/year. That membership fee covers all internal exchanges in THE Club (points membership) and includes the DRI coporate Interval Gold membership for external exchanges. Interval's current exchange fee's apply to all external exchanges.
     
  16. Bill4728

    Bill4728 Moderator

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    I'm not looking at converting my MGV pts to the DRI system at all. I believe that DRI will want way too much money and that if I wanted DRI I'd be smarter to buy into the US collection resale.

    I still think with 2 resorts on the SoCal coast that MGV should have some value but recent auctions show that isn't true.
     
  17. jbercu

    jbercu TUG Member

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    Will you have a choice?

    Pacific Monarch Resorts, Inc. owned by Carlton A. Post and Mark D. Post filed for Bankruptcy. The largest named creditor in the filing is Monarch Grand Vacation Owners Association for $753,062.00. Who is representing MGVOA in Bankruptcy court to make sure the buyer makes up the deficit? Is it Mark D. Post? Will there be a Special Assessment to cover the $750,000? Oh, wait: If you join Diamond Resorts International point System, you can avoid paying the SA! Sounds familiar?
     
  18. WALLstAL

    WALLstAL Guest

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    Sounds Like A Complete Takeover!

    http://www.faqs.org/sec-filings/111028/Diamond-Resorts-Corp_8-K/d247292dex101.htm

    I am not a Lawyer but this appears to be a complete take over opposite of what the letter stated. I know nothing good can come form this for Monarach owners, just look for to increased fees. All resorts will be taken over and there will be a policy change, I pay $1500 a year in maints fees, I hate to this how much this will go up.

    The letter states: Below, I just don't understand how this can be possibe with the sale of all real property.

    {Monarch Grand Vacations, Monarch Owner Services, and Resort Services Group are not part of the bankruptcy or the sale to Diamond Resorts, and will continue normal operations at our headquarters in Laguna Hills California, and our resort properties in California, Utah, Nevada and Mexico. In addition, the resort owner associations are not part of the bankruptcy or the sale, and will continue to act on behalf of all our owners. Central reservations as well as resort operations, maintenance, and management will continue as normal and will not be affected.}
     
  19. rjreichert

    rjreichert Guest

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    Maints fees up!

    :mad: I am not a Lawyer but this appears to be a complete take over opposite of what the letter stated. I know nothing good can come form this for Monarach owners, just look for to increased fees. All resorts will be taken over and there will be a policy change, I pay $1500 a year in maints fees, I hate to this how much this will go up.

    Yep-9%!!
     
  20. rjreichert

    rjreichert Guest

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    Last edited: Dec 5, 2011
  21. csalter2

    csalter2 TUG Member

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    Comes with the DRI territory

    Yes. It seems to go with the turf with DRI. However, in time they will be spiffing up the properties. That's what they have done with the others. They have refurbished rooms, renovated bathrooms, redone pools, etc. In tiime, that's what you will see with of course annual increases in your maintenance fees. They won't always be 9% though.
     
  22. NPetris

    NPetris Guest

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    MGVOA BOD Elections

    I am grateful for TUG and for all the posts on the subject of the Pacific Monarch sale to DRI and the repercussions to MGVOA owners. In point of interest, I received an owner's newsletter (12/6/11) stating that applications are being accepted for MGVOA Board of Directors until 12/12/11 for the 3/12/12 election. I have especially been impressed by Bill 4728's posts and link information and would like to see him run for a MGVOA BOD position. Is that something you would be interested in? Sorry, there wasn't much notice.
     
  23. robcrusoe

    robcrusoe Guest

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    I'm just sad that I didn't get any DRI stock when they took my Sunterra stock. I'd be rich[er].
     
  24. WALLstAL

    WALLstAL Guest

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    Last year (2011) maintainance fees went up 10%, in 2012 they are going up 9% with this economy I see no end in site. I just received my bill for 2012 and the total is now $1790 a year, this is never going to end. I hate to say it but this was the worst purchase I have every made with no way out.
     
  25. Bill4728

    Bill4728 Moderator

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    Generally with point based TS systems the developer owns so much of the inventory that only those people who the the developer wants to be on the board are on the board. No independent board members are ever elected.
     

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