Recent Destination Club News

Sorry, I forgot to mention that even those who are interested to go forward with a member equity club probably don't want to make a snap decision 'JT style' without time to really consider how much skin it will personally take each one of us to stay in this game.

This solution has to be better than any equity club offering already out there or there is no use pursuing a higher cost, still debt laden club without a management team, legal team, asset team, AP/AR team, IT or reservation system or local people on the ground as this will all take time to put in place and time is also money.

I don't say these things to deter but to make sure everyone knows this can't happen overnight even if approved and adopted by the required number of members ( what mix and number is required?? ) to push forward.

Northof49 said:

Sorry, I forgot to mention that even those who are interested to go forward with a member equity club probably don't want to make a snap decision 'JT style' without time to really consider how much skin it will personally take each one of us to stay in this game.

This solution has to be better than any equity club offering already out there or there is no use pursuing a higher cost, still debt laden club without a management team, legal team, asset team, AP/AR team, IT or reservation system or local people on the ground as this will all take time to put in place and time is also money.

I don't say these things to deter but to make sure everyone knows this can't happen overnight even if approved and adopted by the required number of members ( what mix and number is required?? ) to push forward.

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There are two reasons why a true member equity club could turn out to be financially viable and a good deal for us as members:

1. The cost of acquiring members is substantial. Commissions, brochures, ads, sales people, search engines, prospect lists, referral bonuses, etc. I have heard that the cost is as much as 50% of the upfront fees - really no different than initial sale of time shares or any other fractional product. The member-owned club would not have that expense, and any equity contribution can go directly to real estate or debt reduction.

2. The members would control and own the management company so there would be complete alignment of interests. Of course we would have to hire and pay and manage the professionals, but as long as the board does their job properly, the professionals would carry out their jobs cost-effectively and in the best interests of the members. In other equity clubs the management company is an independent company that seeks to make profits. Their interest can differ from that of the members (such as sell new members, impose fees, etc.,) and it can be difficult for the members to control or remove the management company and possibly organize themselves.

So there are some clear potential advantages to a member-owned and member-controlled club vs. what is available today.

All agreed to and great in theory and I totally support a member owned and controlled equity club but until I see the cost, I am a commited member on the idea only, not the substance ( which has yet to be shown ). We joined PE because we were 'Told' membership fee's were about to increase dramatically so to get in at the old price would require us to join at that time. All smoke and mirrors by PE sales staff as it turned out but at least then we had actual numbers in front of us, unlike now. I'm interested but I'm not buying into the possible new club till I see the numbers as I can review numbers elsewhere in an equity club already up and running. This is the key ingredient all interested members don't have to the recipe to take it to CS as a viable option to other offers out there by well organized and possibly already well financed and proven companies.

I was not one of those to get the email from Q even though I am an "active" member. Perhaps because I came from PE I was not on whatever list Q received. I did get a copy of somebody else's offer that would be the same as I should have received to review. After a quick glance I placed a call to Q with a few questions and the answers I received are different from what I seem to be reading here. I don't know who is correct but wanted to at least share the info I received from Q directly...

1- This offer provides NO PAYMENT to UE or JT or any UE management. ALL FUNDS remain in the "new Q clubs".

2- NO member of the current UE management is part of this club or will be. They are not happy with current UE management they claim and don't understand how UE can rescind an offer that wasn't from UE.

3- The current 10 homes are all owned (NOT leased) and are not "UE" homes. They are already owned by Q for future expansion as they have been planning on this "5 level club" (3 UE levels, Golf club, Q) for many months.

4- For some strange reason you must "join" the new club at the same level you are at and for roughly the same nights. I asked if I could pay a different fee to step "up" or "down" in this new club and was told they don't want that to "keep things simple". I don't understand why this matters but found it strange why they would even care what level I was at with UE.

They are willing to put all this in writing.

I don't know if this makes any difference as I don't like the deal either way for many of the reasons already discussed on this thread but wanted to at least pass along the info for what it may be worth (or even if it's worthless).

Jack - I think that, basically, you are just confirming what we all already know. JT and Q, ie Pete, are full of crap and have a very specific plan. Think about it. You are 100% correct, if they say they have been planning this 4-5 tier club stuff for a while, then haven't they been doing it independent of anything to do with UE? Instead, they will only let you join at your specific levels? And suddenly they have all these "extra" homes at your level too? Wow, what else do they have, dancing girls in every home and free booze for life?

No matter how you slice it, we've been played and now is our chance to fix all of this.

Agreed that this was always the plan. Now I wonder if JT tried to do to Q what he's done to us and they got PO'ed and are trying to go around him.

As I said, the "deal" does not make any financial sense to me as presented for all the reasons stated. I agree with the consensus that this offer will flop and we will have others to choose from, perhaps many, in the next days. I hope that one of them makes some sense and can provide us with the ability to book trips without worrying if the club will still be around at travel time. If not, there are other ways to travel.

I think you nailed it. No doubt, and not really hidden from us, JT and Q were in negotiations over something for the last 6 mos. JT probably made it difficult, likely unbearable, with his demands to "run the show" and be the top dog. Negotiations went back and forth, it ended. Since the CS forbearance JT did his little video escapade. He tossed out the #s that were along the lines discussed with a Q deal. We didn't buy it, but he tried. "A" for effort. Next thing you know, Q is after us with our private and customized info. Authorized or not, a "good deal" or not (it wasn't), it was probably more of a F U to JT then anything...I assume JT killed the deal with them because they said "no job" so he thought he would pitch the $30MM "give me cash now" approach.

It's time the members take charge of this. Seriously folks. We are the cash cow. We're worth nothing NOT as a group. Let someone go buy the CS homes, who cares. We are the ones that "contribute" the working capital. We should say no to doing anything until we know our dues are not padding the pockets of JT and his cronies.

And to Q -- shame on you. 6+ months of negotiations (so we we're told, I cannot confirm for certain) and THAT is the best you can come up with? Not only do the dollars suck, they're totally unsupportable.

ClubsRDead said:

Wow, what else do they have, dancing girls in every home and free booze for life?

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Can you forward the phone number for this club...I would like to do some due diligence...

My couple thoughts upon further reflection on the Q offer:

1. Given it is not the main Q club, we Q members can't tell you how great the new club's homes will be. However, Q does a great job on service and overall, member satisfaction is huge. So as a travel company, they are great.

2. I would be be very wary of the possibility of dues hikes and other changes. I would force them to lock dues for a very long period and would absolutely eliminate some of the unconscionable clauses such as the resignation and pay dues clause. As it stands now, if you lose your job and get divorced, you still have a nice big fat annuity to pay. Some other changes we endured: loss of co-branded LHW hotel access, removal of holidays and changes in access in the holiday use plans (my reason for resigning), changes in inter-club usage, occupancy fees (not dues says Q...usage fees...uh..seriously, wtf guys), etc etc.

3. It sounds as if they are using the Tour club for this--if so, how are they dealing with the concentration of golf locations? If you don't golf is there any value? Last time i considered where to travel, i believe atlanta was about 937th on my list of places to visit.


4. I do think the Q investor is more locked in than people give credit for, but if we see a huge real estate sell off, don't be so sure. That said, what clubs investors are really in it for the long term if we go down another 25% in real estate prices? The equity club guys will wind up with a portfolio of houses to support deposits, but don't pretend shutdown for any management company is worth it. Many of the UE guys have experienced multiple false dawns....I won't discuss the other clubs per se, but would warn against evangelical sounding arguments made by any model. In raw terms, if investors don't see money in it, they'll be gone and you'll be left holding the bag....again. Equity models still charge you big fees on deposit, so in a 25% real estate decline, they'll disappear and the most you get back on your deposit is 40-50 cents on the dollar (20- 27.5% fees on your deposit + 25% loss + portfolio liquidation cost of ???)

EOD said:

Q does a great job on service and overall, member satisfaction is huge. So as a travel company, they are great.

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Kagehitokiri2 said:

http://tugbbs.com/forums/showpost.php?p=968623&postcount=444
EE beats Q for private chef?

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EOD said:

3. It sounds as if they are using the Tour club for this--if so, how are they dealing with the concentration of golf locations? If you don't golf is there any value? Last time i considered where to travel, i believe atlanta was about 937th on my list of places to visit.

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Jack1234 said:

3- The current 10 homes are all owned (NOT leased) and are not "UE" homes. They are already owned by Q for future expansion as they have been planning on this "5 level club" (3 UE levels, Golf club, Q) for many months.

4- For some strange reason you must "join" the new club at the same level you are at and for roughly the same nights. I asked if I could pay a different fee to step "up" or "down" in this new club and was told they don't want that to "keep things simple".

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lists "UE" and golf separately?
and they dont want more money (via upgrades)? right.

EOD said:

Equity models still charge you big fees on deposit, so in a 25% real estate decline, they'll disappear and the most you get back on your deposit is 40-50 cents on the dollar (20- 27.5% fees on your deposit

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Kagehitokiri2 said:

http://tugbbs.com/forums/showpost.php?p=886362&postcount=219
- deposit comparison

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10% hideaways (dont know about debt)
9% luxus
7% m (high debt cap like EE)
rocksure may be even less

...

Kagehitokiri2 said:

http://tugbbs.com/forums/showpost.php?p=968270&postcount=440
upcoming EE with lower property values?

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will be interesting to hear deposit/dues, and how reciprocity works.

actually, I was wrong as it may not be Tour club after all, which makes me wonder exactly how they already own 10 homes as indicated above. I guess they could have tapped the investor to buy them, taken them from the main club or tour club or just made the whole thing up. The beauty of Q, whatever happens in other clubs held by Q is none of our business and we really can't stop them from doing whatever they please. But I'm sure they are working hard on delivering for the existing club as well....right.

Kage: wasn't really saying every service aspect of Q was better than other clubs, just that it was overall delivering well on travel and travel related services-if private chef is your sole criteria for joining a DC, then you should have your head examined. As for equity club deposit fees: EE and AKRC were charging 20-27% as you show in the link. suggests those other clubs mentioned offer much better value.

i find it bizarre if EE can do a better job sourcing private chefs.

Kagehitokiri2 said:

ClubsRDead said:

I agree that more homes are necessary, and the offer I received contemplates adding some 10 homes in my club level. They claim their "mystery" investor has agreed to the acceleration of some $20MM of the $210MM remaining "available" funds.

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$210mm committment
paid 2008, 2009, 2010
http://www2.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/04-10-2008/0004790138&EDATE=
didnt a Q member say it was $21mm/yr over 10 years?

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thatd be $63mm paid $147 left?

forget who recently reminded that capsource is primary DC lender, but agree that certainly is another interesting factor. has capsource actually been in discussions with all their DC borrowers re consolidation? capsource should logically be the best informed re all their situations...

just noticed in sherpa article linked here
http://tugbbs.com/forums/showpost.php?p=986245&postcount=857
>

The club has been in negotiations for over 6 months with another club or hospitality entity who has completed their due diligence. Ultimate and the CRO have also reached out to over 200 other potential acquirers and have had interest from over two dozen parties.

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http://destinationclubnews.com/News...sses_Availability_Impact_Of_New_Promotion.php

"Because the Abercrombie & Kent Residence Club has six or so properties that are not yet owned by the club, we have excess inventory available for these types of special promotions and offers," Gilson told us. "As the developer behind the club, A&K has made these advance properties available specifically so that we can help grow the membership."

"Our overall occupancy levels have been around 50% for the last two years, and are similarly tracking this year

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Kagehitokiri2 said:

forget who recently reminded that capsource is primary DC lender, but agree that certainly is another interesting factor. has capsource actually been in discussions with all their DC borrowers re consolidation? capsource should logically be the best informed re all their situations...

just noticed in sherpa article linked here
http://tugbbs.com/forums/showpost.php?p=986245&postcount=857
>

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Cap source is clearly a Q lender so at minimum they sure would be very well informed. On the other hand, they also lent against a lot of flawed businesses (as did many of us).....

EOD said:

Cap source is clearly a Q lender so at minimum they sure would be very well informed. On the other hand, they also lent against a lot of flawed businesses (as did many of us).....

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my understanding is that capsource has always been high yield... the only thing theyre probably kicking themselves now for is covenants/etc and things that might help them force consolidation among DC borrowers. it is public information that capsource is lender for a number of DCs incl ER as well. i dont remember which others specifically came up.

Thanks EOD, for the refreshingly unbiased perspective.

If I do go with another club, it will be the one that offers the closest match to the PE Legacy plan that I presently belong to, without putting in any new deposits (on the non-equity side) or a highly deferred deposit offer (on the equity side). After three years of DC living, I no longer NEED to keep that lifestyle, so I'm starting to realize that I may just walk away from this altogether if UE itself isn't bought out or allowed to somehow continue.

My real fear at this time is that I'm starting to pick up on two of the same things that I saw when HCC and Lusso fell apart in DC4MS:

1. Let's take over the club. We can do it!
2. The CEO is the devil/thief.

History isn't kind on either front. Saving the club ourselves is noble, but we then have 1200+ different perspectives on how the club should be run and which homes should be kept, and only a handful willing to put up new money.

As for the "CEO is a crook" chatter, it's normal behavior after seeing deposits get hosed, but somewhere along the way, companies fail without thievery. When I see a "going out of business" sale at a local store I don't go in there and browbeat the owner. He wasn't a crook. Things just didn't go his way.

If the vacation real estate market hadn't gone to hell, and the value of our homes would be twice the value of the company's debt, there would be a liquidity crisis, but at least those of us with deposits at stake wouldn't be completey out of luck (and SOMEONE would surely step up to buy a company). We can blame UE for not cutting costs sooner, so there is a certain level of incompetence there, but I've never bought into HCC, Lusso, or now UE deliberatly mismanaging the company to the point where they'd be out of a job post-bankruptcy.

I hope it's different this time. I hope that having 1200-ish members will mean something at the end of the day.

rocksure had 1.5 units left in bravo fund in march
looks like they had sold ~18 out of 170 units for euro capitals fund as of july >
http://www.timesharepages.com/world-news/europe/rocksure-property’s-capital-fund-reached-milestone/

subscriptions summing up to €2.1 million. €1 million of the total offer were invested just over the last 2 months.

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timing of sales in line with what weve heard from US DCs

also interesting stuff >
http://webcache.googleusercontent.c...rlands&cd=9&hl=en&ct=clnk&gl=us&client=safari
http://www.scribd.com/doc/20893690/Trends-in-Fractional-Real-Estate-Report-Europe-2009

Desties said:

My real fear at this time is that I'm starting to pick up on two of the same things that I saw when HCC and Lusso fell apart in DC4MS:

1. Let's take over the club. We can do it!
2. The CEO is the devil/thief.

History isn't kind on either front. Saving the club ourselves is noble, but we then have 1200+ different perspectives on how the club should be run and which homes should be kept, and only a handful willing to put up new money.

As for the "CEO is a crook" chatter, it's normal behavior after seeing deposits get hosed, but somewhere along the way, companies fail without thievery. When I see a "going out of business" sale at a local store I don't go in there and browbeat the owner. He wasn't a crook. Things just didn't go his way.

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It's like the stages of grief. Denial, bargaining, anger, sadness, acceptance, moving on....

To those two points above - both are, however in some ways correct.

The club could be taken over as a member club. It doesn't need 1200 members, nor their individual perspectives. And you eliminate those who don't want to go forward, or don't make capital contributions. I think there's a lot of flavors on how to do this, but it's possible. It's going to be harder to do if people band out all over the place and subscribe to various offers like Q's, but that's okay. Remember, there's not enough homes in the current portfolio to service 1200 anyway. Not effectively. And doing something along these lines would require some concessions on the part of the lender. People say this is in the works, but we have no real evidence of that.

The "CEO is a crook" thing, well opinions vary. This same mantra started in the TH days. Whatever happened there? Nothing as far as I can tell. JT and co made some really bad decisions, some likely in violation of their covenants as officers, and maybe even some that will get the interest of the SEC being a public company. The best thing we can do in this regard is just get away from them and demand any new offerings we see, or choose to accept, don't include him in any way.

The most shocking thing I have seen here and from the filings is the exec comp. And from the thread on the other board, that they paid "sales commissions" on almost every dollar we paid in - dues, assessments, etc. That just pisses me off. Why didn't they just pay the damn loan interest?

How anyone can think that management is not significantly responsible for the demise of UE is beyond me.

Forget the real estate market - as I said to management a year ago....times of crisis expose bad business plans. That is all this was - a ponzi scheme. Without new sales, it was a doomed business.

Now, post-assessment JT and Rich had a chance to revamp the model and move forward with something sustainable. But they never came clean with membership about the truth of the model and the numbers. They chose not to do that....they didn't even close Ft. Collins (which makes no sense whatsoever)...oh wait, yes it does bc the merger didn't close until the Secure America deal!

The whole thing was mismanaged and at no time did management make the hard decisions that were needed for sustainability. However, they did get paid!

Desties said:

Thanks EOD, for the refreshingly unbiased perspective.

If I do go with another club, it will be the one that offers the closest match to the PE Legacy plan that I presently belong to, without putting in any new deposits (on the non-equity side) or a highly deferred deposit offer (on the equity side). After three years of DC living, I no longer NEED to keep that lifestyle, so I'm starting to realize that I may just walk away from this altogether if UE itself isn't bought out or allowed to somehow continue.

My real fear at this time is that I'm starting to pick up on two of the same things that I saw when HCC and Lusso fell apart in DC4MS:

1. Let's take over the club. We can do it!
2. The CEO is the devil/thief.

History isn't kind on either front. Saving the club ourselves is noble, but we then have 1200+ different perspectives on how the club should be run and which homes should be kept, and only a handful willing to put up new money.

As for the "CEO is a crook" chatter, it's normal behavior after seeing deposits get hosed, but somewhere along the way, companies fail without thievery. When I see a "going out of business" sale at a local store I don't go in there and browbeat the owner. He wasn't a crook. Things just didn't go his way.

If the vacation real estate market hadn't gone to hell, and the value of our homes would be twice the value of the company's debt, there would be a liquidity crisis, but at least those of us with deposits at stake wouldn't be completey out of luck (and SOMEONE would surely step up to buy a company). We can blame UE for not cutting costs sooner, so there is a certain level of incompetence there, but I've never bought into HCC, Lusso, or now UE deliberatly mismanaging the company to the point where they'd be out of a job post-bankruptcy.

I hope it's different this time. I hope that having 1200-ish members will mean something at the end of the day.

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History Repeats Itself!

Desties said:

My real fear at this time is that I'm starting to pick up on two of the same things that I saw when HCC and Lusso fell apart in DC4MS:

1. Let's take over the club. We can do it!
2. The CEO is the devil/thief.

Click to expand...

I've been amazed by this very thought as I read these posts for the last several weeks. From the UE threats of imminent demise unless the members pony up some funds to the artificial member vote to pay or close the DC ... It's almost EXACTLY like the end of most DCs.

Don't forget:

3. We members will at least get SOMETHING if the DC files bankruptcy.
4. We are worth something to someone as a group of members.
5. Another DC will surely ride in on a white horse and scoop up the post bankruptcy assets and members.

I really wish we still had the old DC4MS posts so UE members could see how this has played out in the past.

travelguy said:

I really wish we still had the old DC4MS posts so UE members could see how this has played out in the past.

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Just remember - the reason we don't have the old posts is because JT "bought" DC4MS to stop anyone from seeing them. He's a slimeball. But so too was the schmuck who had it and supposedly all these "principles" which he abandoned for some stock (LMAO now - 16,000 shares at what, 8 cents each??) and a membership in UE. That's worked well for him. Of course, he'll be standing in line filing a claim form like everyone else....

The old forum that was thmembers.com then uemembers.com is not ultimatemembers.org, I think - it's back open but doesn't appear to be getting a lot of traffic. Some funny stuff though....not that this situation is laughable.

If we see a filing this week I think we can start seeing some perspective in this process and hopefully some legit options.

The longer this process takes, the potential for members losing interest in any solution increases. Members are already upset about lost money and vacation plans ( maybe not the first time either ) so waiting for someone else to save them and their lifestyles can get old real fast.

ClubsRDead said:

But so too was the schmuck who had it and supposedly all these "principles" which he abandoned for some stock (LMAO now - 16,000 shares at what, 8 cents each??) and a membership in UE. That's worked well for him. Of course, he'll be standing in line filing a claim form like everyone else....

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hello, SLAPP lawsuit settlement...

UE membership? what?

Lets hope this slips through the cracks...

Paragon as "divested" its rights to "Phoenix Club". Yes, the club will lauch in the near future...but I do not want to control "when". Too many...

I will still be involved in a consulting role.

My first and last post on this topic.