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[ 2012 ] Fairmont / Sunchaser / Northwynd official thread with lawsuit info!

Quadmaniac

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It's from Wankel's 2nd affidavit in which he basically says if the resort cannot use the already renovation and cancellation monies Norton Rose collected in turst so far (which I estimated to be between $7M-$8M), the resort will likely have to declare bankrupcy in Q3 2013.

We all know that is a bunch of crap.
 

tdjanzen

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Q3 Bankruptcy

Actually, I think Mr. Wankel is probably be quite accurate that Northwynd is sucking wind. However, it is not the "minority owners" that created that situation.

If I read the document correctly, he is saying that they must have access to the Project Maintenance Fees paid to date (~$5-6,000,000; based on the GST calc.) or they won't be able to pay the contractor (that is already working on work that may or may not be approved) or pay outstanding amounts to Northwynd. I understand the first issue but not sure that I am particularly sympathetic to Northwynd's management fee being delayed. I find it particularly galling that this deficit was hidden from timeshare owners for over 3 years, because there were no published financial statements. Then suddenly, tada, we're presented with statements that we owe them over $4,000,000 for costs incurred over the last 3 years.

I do find it interesting that I believe we "the minority owners" could make exactly the same argument that he does. If the Project Maintenance Fees are not put in trust (i.e. Northwynd can spend it at their will), we will NEVER see a dime of it, even if our action succeeds. They need the money to continue operating the resort and financing the construction.

Finally, did he just say that Northwynd is planning to use the funds designated for the new construction project to fund Q3 and Q4 operations?

Anyone that has been sitting on the fence about whether to inject cash (Reasons to Stay) or run away (Freedom to Choose), should look at that statement. Some (all) of the money you give them could wind up being used for things other than "re-furbishing" the facilities. And Northwynd decides how and when it gets used. The prospect is terrifying.

I honestly believe that there may be a point of compromise where the renovation amounts should be held in trust. I can see that the deficit repayment could be used to do exactly that; pay off outstanding amounts. I would have way more faith in Northwynd if they indicated a willingness to delay repayment to them as well. There are going to receive $6,000,000 if they can make the whole project move ahead.

I just know that I will say my goodbyes to the resort this summer. I have loved going there and spending time with my family. But Mr. Wankel's affidavit has proven to me that there is no winning this battle. He is correct, Northwynd is quite likely to go bankrupt and the mere mention of this fact (through his affidavit) will likely make it a self-fulfilling prophecy. No one in their right mind is going to give these guys any money for a long, long time.
 

darklord700

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tdjanzen, that's my conclusion after reading the 2nd Wankel affidavit. And I deeply feel sorry for the owners who paid the renovation feel and were expecting a spanking new resort down the road.

Wankel is trying to get access to the renovation and cancellation fees paid thus far to fund normal day to day operation of the resort after Q3 2013. Firstly that's not the intend of the renovation assessment per even Northwynd's admission.

Secondly, what is going to happen after the few millions collected thus far runs out? Is Northwynd going to hit the owners with another special assessment?

Northwynd is a terminal case that might not survive past this Christmas. It's not a smart move for Wankel, our esteemed Chartered Accountant, to make the 2nd affidavit. But maybe he wouldn't have done it if he had other choices.
 

GypsyOne

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Kirk Wankel’s 2nd Affidavit Reveals Discrepancy in Calculating Cancellation Fee

Paragraph 17 of Wankel's Affidavit, Cancellation Fees Paid to Northmont, states in part, “The Cancellation Fee is made up of three costs. The first is the cancellation cost which is calculated based on the present value of the future management fees owing for the remainder of the Vacation Interval to a maximum of 20 years......”

The only problem being that the cancellation fee as layed out in Page 1 of Freedom To Choose, Reason to Stay letter of April 12, 2013 was not calculated on the basis of present value of future management fees, it was calculated on the basis of a larger figure - total management fees for 20 years (20 x $117.92 = $2,358.40). If the cancellation fee had been based on the present value, which by definition is the discounted value of the future flow of funds (in this case management fees), the cancellation fee would be significantly less. Instead of a cancellation fee of $3,167.51, the cancellation fee, based on a discount rate of 7%, would be $2002.91. Here is how the calculation would look: (See Reason To Choose letter for comparison)

20 year example Two Bedroom Annual
Years remaining.........................................................................20
Current management fee (excluding GST)...............................$117.92
Present value of $117.92 for 20 years discounted @ 7%........$1,249.25
Deficit recovery, administration and trustee fee......................$658.28
Combined cancellation fee (excluding GST)..........................$1,907.53
GST @5%............................................................................$95.38
Total cancellation fee including GST....................................$2,002.91

So based on his 2nd Affidavit, and based on their own assumptions, they are overstating the Cancellation fee by $3,167.51 - $2,002.91 = $1,164.60. In other words, they have over-charged those who have paid the cancellation fee and they are over-billing those who might pay to get out.

Which is the proper way to calculate a cancellation fee? Is it the total cumulated amount of the future management fees that they used in the calculation, or is it the discounted present value amount which he says he used? No question it is the 20-year discounted present value amount. Actuaries and financial analysts, when measuring the present value of a future flow of funds, will always discount the funds received in the future because of the time value of money. It boils down to a simple matter that people would rather have, say $117.92 today, than $117.92 twenty years in the future.

There are really two issues here. Firstly, those who are disputing paying the renovation fee and the cancellation fee for reasons of numerous breaches of contract and misrepresentations, say there should be no cancellation fee. Secondly, those who have agreed to pay the cancellation fee and walk away, may have paid too much. These people should look at whether they should either get a refund, or have the total amount returned because of misrepresentation.
 
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Hotpink

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Selling the assets

As they are selling Lake Okanagan and as an "owner"( Northwynd's definition) we have not been consulted about this.

http://www.specializedassets.ca/properties/lake-okanagan-resort

Now we know they want the cash and be damned with the owners.

I did NOT ever see any request for money to upgrade , renovate or expand that property.
What is different with Riverside /Hillside/ Riverview and Lake Okanagan.

Take time to read the listing and give us your thoughts
 
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darklord700

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Take time to read the listing and give us your thoughts

If Northwynd can sell Okanagan without TS owners' consent, that means TS owners don't own the assets but Northwynd. So why should TS owners pay for Fairmont's capital upgrade?

OTOH, the Okanagan resort might worth the asking price but Northwynd's also selling the liability to TS owners. Meaning the buyer doesn't not own the resort until such time the TS owners claim on the use of the resort expires in a few decades.
 

fairmontlvr

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Take time to read the listing and give us your thoughts

If anyone has read the reviews on Trip Advisor of Lake Okanagan Resort it sounds as if the condition and lack of on going maintenance is worse than that of Fairmont. Perhaps as a result of the complaints and ongoing court case that many of us have forced, Northwynd has realized they are fighting a losing battle and could not try to push the same renovation project onto the owners at Lake Okanagan.

Another perspective is that the creditors of Nortwynd may be slowly realizing the ship is sinking, and are asking/demanding some form of payment. If in fact this renovation project at Fairmont does not go through or is tied up in the courts for some time and Northwynd does go into bankruptcy in the fall, Northwynd and the creditors would probably receive a lot less money from a court ordered fire sale of Lake Okanagan.

Conversely, if we get a ruling from the courts that we timeshare owners are owners of time and only time and are not responsible for major capital upgrades, then Northwynd could use the proceeds of this sale at Lake Okanagan to fund these upgrades they have committed to.
 

fairmontlvr

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Lake Okanagan Resort

After further reading of the listing for the Lake Okanagan Resort (LOR), of the 217 units at resort, the new owner would only have 76 units available to rent as 77 are privately owned and 64 are classified as timeshares.

This leads to the question, is Northwynd still planning on owning these 64 units? Or, because of the promoting of the Legacy for Life program, are these units not available to be listed due to this perpetual commitment?
The ad for the listing mentions the owner would manage the site and collect maintenance fees and management fees.
Any potential owners would be faced with many issues regarding clarification of responsibility of capital costs and renovation fees of these units.
 

GypsyOne

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That Hilford letter was fabulous - she pulled together all the relevant arguments that have been mentioned here.

(It was the very last pages at http://sunchaservillas.ca/wp-content/uploads/2013/04/Kirk-Wankel-Affidavit-2-Filed-062513.pdf)

I'd be interested to know whether their offer was accepted.

And which legal firm they are going with.


No, the offer in the Hilford letter that you refer to was rejected by Northwynde and Companies along with over 100 similar letters sent to the Companies and included as an Exhibit in Form 67 and Affidavit lodged with the B.C. Supreme court each by a group of owners banding together to fight this unscrupulous issue.
 

Spark1

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No, the offer in the Hilford letter that you refer to was rejected by Northwynde and Companies along with over 100 similar letters sent to the Companies and included as an Exhibit in Form 67 and Affidavit lodged with the B.C. Supreme court each by a group of owners banding together to fight this unscrupulous issue.

Does anyone know what percentage of the monies collected buy may31 were cancellation fees. We all know this money paid buy timeshare owners for cancellation fees were because of the ensuing threats put forth buy Northwynd.
 

fairmontlvr

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Who is paying Maintenance Fees now for 2014?

In previous years we have paid our Maintenance fees a full year in advance to secure a prime unit that we wanted during our annual gold season. With the uncertainty of the future of Sunchaser and Northwynd, I don't have the confidence of giving them a dime in advance until this is cleared up.

This started about three of four years ago and I now wonder if it was a means of using future maintenance funds inappropriately.

Is anyone brave enough to give them a deposit now for 2014?
 

condomama

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In previous years we have paid our Maintenance fees a full year in advance to secure a prime unit that we wanted during our annual gold season. With the uncertainty of the future of Sunchaser and Northwynd, I don't have the confidence of giving them a dime in advance until this is cleared up.

This started about three of four years ago and I now wonder if it was a means of using future maintenance funds inappropriately.

Is anyone brave enough to give them a deposit now for 2014?
Not us! We used to do the same, book and pay for the next year while we were enjoying this year's week. Not any more!
 

DarkLord

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From the 2nd Wankel Affidavit, I worry how the resort is going to survive no matter the outcome of the petition. Only 840 owners out of potential 12750 owners paid in full. These are probably the only owners (840 of them) that will pay the maintenance fee next year and beyond. Another 1965 owners chose the $100 per month option so perhaps a portion of them will pay the maintenance fee for next year and beyond.

If the resort cannot survive on the maintenance fee collected before this fiasco, how can it manage it's budget on 840+change owners paying the maintenance fee?
 

jekebc

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Some of you may have received a letter or email from Kellie Hamilton soliciting you to pay her a retainer and join in a Class Action that she has filed.

I suggest you be very cautious and check out what she is actually proposing before you agree to retain her services.

I have a copy of the claim she filed re the Class Action and will share it with those that wish a copy.

Please email me at thebelfrys@shaw.ca if you wish further details.
 

Meow

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Getting concerned!

Now that we have our various legal groups heading off in different directions, what hope is there for any success in the courts against Northwynd? Is it a case of divide and conquer. Northwynd just has to sit back and let it happen.
 

ferrier1

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ferrier1

I agree with Jim. First prove the allegations and then seek the damages with a class action. Although all the allegations seem well founded, nothing is proven. All we know for sure we all received a reno/freedom to choose bill.
 

jekebc

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Deadline for Responses - August 2, 2013

I attended the Court session held July 12, 2013 presided over by Madame Justice Loo.
The session was actually a Case Planning Conference intended to get agreement among the parties as to the processes and schedules by which the issues in the petition can be addressed. The Court will issue an order including the steps and the dates that I will make available as soon as received.
From my notes, the key dates for consideration:
All responses to the Petition by individual owners or by law firms on behalf of owners must be filed with the Court and served on other parties by August 2, 2013.
The lawyers must agree to and submit a Statement of Special Case by August 16, 2013. This document will identify all issues to be decided on by the Court.
The schedule will provide for submissions of arguments and replies and examination of respondents through to end of September.
The actual Hearing Dates for the case have been set for October 8 to 10 with the case to be heard by Justice Loo.

Note to Owners that Have Not Submitted Form 67
It is important that all owners who have not already done so submit their objections, if any to the proposals by Northmont – this includes the billing for renovations, the levying of a cancellation fee for those that wish to cancel their contracts, and the proposed reorganizing and downsizing of the Resort.
The process of submission is by way of completed and signed Form 67, preferably with an Affidavit although it is not essential.
 

Anxiety123

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Form 67

If you are not with a lawyer and want help with Form 67, you may try contacting Jim and see if he has room for more in his group. jimbelfry@shaw.ca. He is very knowledgeable and level-headed and has a Lawyer helping him with every step.
 
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