# Recent Destination Club News



## TarheelTraveler

Since DC Forums is down, I thought that I'd post a few interesting (at least for DC junkies) happenings/news cites from the DC sector in recent weeks in case anyone wants to discuss them:

Robb Report did an article about DCs entitled something along the lines of "Club Mend" discussing the survivors of the DC industry, like Ritz-Carlton, Exclusive Resorts, Abercrombie & Kent, Quintess, Ultimate Escapes, Equity Estates, etc. Can't find an online version, but Bill Scherer of DC Forums has a number of quotes in it, and the website is noted prominently.  It's interesting how much more important forum type sites are becoming when they are cited in mainstream media.

*Hideaways* forms an alliance with *Banyan Tree *after doing one with Equity Estates

http://www.property-report.com/property-news-top-stories.php?id=3062&date=270110

""Investment fund destination club The Hideaways Club has forged an alliance with Banyan Tree Private Collection, Asia’s first global destination club.

The alliance takes the form of an exchange partnership, offering members of both clubs the opportunity to enjoy reciprocal usage of each other’s properties.""

*A&K Residence Club*

http://www.naplesnews.com/news/2010/jan/30/live-updates-how-2010-naples-wine-festival-auction/

Clearly, this is about the charity as they could've bought a membership at that price (instead of just two weeks).

"“Not that last year was the greatest year in the world, but I think that people are feeling better,” Jay Baker said. “Last year was a tough year for everyone.”

Baker and his wife, Patty, had just placed their third winning bid, this time on a two-week vacation for three couples to any two Abercrombie & Kent Residence Club resorts, for $150,000.

“I have gotten his Valentine’s Day gift and his birthday present here today,” joked Patty Baker."

http://www.hotelnewsnow.com/Articles.aspx?ArticleId=2639&ArticleType=35&PageType=News

"The DEPARTURES Magazine Luxury Marketing Achievement Award was presented to Abercrombie & Kent Residence Club and ISM."

http://www.luxist.com/2010/01/26/best-luxury-family-winter-vacation/

"Abercrombie & Kent Family Safari in Kenya, Africa
For families with a thirst for adventure, a safari trip to Africa may be the ideal cure to the winter blues. Leave the planning to Abercrombie & Kent, a luxury travel company that's been at it for half a century, now nominated for a Readers' Choice Award in the Best Luxury Family Winter Vacation category."

http://www.theaustralian.com.au/travel/the-travellers-alphabet/story-e6frg8rf-1225822587764

"Zambia is the latest safari hot-spot; luxury operator Abercrombie & Kent has opened its own Sanctuary lodges and tented camps (including Sanctuary Sussi & Chuma in the Mosi-oa-Tunya National Park, with 12 treehouses built into the living canopy of giant ebony trees), thus ensuring a consistently high standard of accommodation and services. Itineraries are flexible (try canoeing on the lower Zambezi), with optional Victoria Falls extensions; Zambia's South Luangwa region is billed as the "home of the walking safari" allowing ranger-escorted guests to view the African bush from a different perspective. More: abercrombiekent.com.au."

*Ultimate Escapes*

UE is doing a reverse stock split and offering additional shares to raise up to $30-40M

http://www.sec.gov/Archives/edgar/data/1402364/000114420410002137/v171255_s1.htm

New marketing officer

http://www.prnewswire.com/news-rele...ief-sales-and-marketing-officer-83538897.html

"Ultimate Escapes, Inc. (NYSE Amex: UEI and UEI-WT), one of the world's largest luxury destination clubs, announced today the appointment of Ted Curtis as chief sales and marketing officer, reporting directly to President and CEO, Jim Tousignant. Mr. Curtis will be responsible for leading the company's worldwide branding as well as overseeing the execution of Ultimate Escapes' overall sales and marketing activities, including customer acquisition and retention strategies. Mr. Curtis has more than 20 years of sales, marketing and management experience in the leisure, hospitality and resort business and served as a consultant to Ultimate Escapes since November 2009." 

Ultimate Escapes settled the Sypris lawsuit (terms weren't disclosed)

http://www.denverpost.com/business/ci_14266470

UE receives notice from NYSE Amex

http://www.foxbusiness.com/story/ma...escapes-receives-additional-notice-nyse-amex/

"Ultimate Escapes, Inc. (NYSE Amex: UEI and UEI-WT) (the "Company"), one of the world's largest luxury destination clubs, announced today that on January 20, 2010, the Company received notice from the NYSE Amex LLC (the "Exchange") indicating that the Company did not comply with Section 301 of the Exchange's Company Guide when the Company recently issued common shares to certain of its members pursuant to the Company's "redemption assurance program." Section 301 requires a listed issuer to file an application and obtain approval for the issuance of additional shares from the Exchange prior to such issuance."

http://www.bisnow.com/washington_dc_tech_news_story.php?p=6786

"Everyone knows (and he’s certainly hard to miss) ex-Bullets star and former Congressman Tom McMillen, who created Secure America Acquisition Corp in 2007 to find a homeland security company to buy. Well, the market’s changed a bit, and last night we dropped by Georgetown’s Four Seasons to tip our hat to his acquition instead of a part of Ultimate Escapes, competitor to Exclusive Resorts in the hip new “Destination Club” business category. The small-looking (but actually normal sized) guy with him is UE CEO Jim Tousignant. Jim, who started the business in '04, tells us he was on the 67th floor of the second World Trade Center building at the time the first was struck on 9/11. Fortunately, he ignored the PA system, which advised occupants of the second building to stay put. After walking down, he was exiting when it was struck by the second plane."


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## AKTHUE

*DestinationClubForums was the only objective discussion*



TarheelTraveler said:


> Since DC Forums is down, I thought that I'd post a few interesting (at least for DC junkies) happenings/news cites from the DC sector in recent weeks in case anyone wants to discuss them:
> 
> Robb Report did an article about DCs entitled something along the lines of "Club Mend" discussing the survivors of the DC industry, like Ritz-Carlton, Exclusive Resorts, Abercrombie & Kent, Quintess, Ultimate Escapes, Equity Estates, etc. Can't find an online version, but Bill Scherer of DC Forums has a number of quotes in it, and the website is noted prominently.  It's interesting how much more important forum type sites are becoming when they are cited in mainstream media.



TarheelTraveler, thanks for the news. 

I found DestinationClubsForum to be a far better source of information and news and the real story than what you read on Halogen etc. Plus it was good to be able to converse with fellow members. It is too bad that was shut down.

Perhaps the discussions can be recreated here. Is there any way to get the word out to the formerly registered users at DCF to come here?


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## TarheelTraveler

AKTHUE said:


> TarheelTraveler, thanks for the news.
> 
> I found DestinationClubsForum to be a far better source of information and news and the real story than what you read on Halogen etc. Plus it was good to be able to converse with fellow members. It is too bad that was shut down.
> 
> Perhaps the discussions can be recreated here. Is there any way to get the word out to the formerly registered users at DCF to come here?



Agreed, AKTHUE.  Some of the industry sources really just seem like industry mouthpieces.  With DCF, you got the good, the bad and the crazy.  Hopefully, you'll see people migrating back here if DCF remains shut down.

I will say that the industry (with perhaps one or two exceptions) is in much better shape than it has been.  At least the amounts charged to members now approximate the costs of the services, as most clubs have had to sustain themselves with few or no sales.  Clearly, many clubs were dependent on debt and new sales to sustain the club, and with the survivors, they either weren't premised on this model (A&K and EE) to begin with or moved away from that model (e.g., Quintess).  We'll still have some major bumps in the road, but the surviving clubs are at least set up better fundamentally.

Ultimate Escapes to me is the wildcard or renegade club.  It'll be interesting to watch them.  They always seem to have a bold new plan (sometimes out of necessity).  They're not shooting for the middle ground so to speak, and we'll have to see where that gets them.  Again, should be interesting to watch.


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## caribbeansun

*Info on M*

[FONT=Times New Roman,Times,Serif]*Part of an email blast that came through this weekend

*******************

M Private  Residences* [FONT=Times New Roman,Times,Serif]recognizes the economic  challenges 2009 placed on many of our future  members. [/FONT][/FONT]​ ​ [FONT=Times New Roman,Times,Serif]Until *April 30, 2010*  M Private Residences will open up a secondary market to allow an opportunity of  purchasing an existing share below market value.[/FONT]​ [FONT=Times New Roman,Times,Serif] [/FONT]​ [FONT=Times New Roman,Times,Serif]Since your equity investment is  secured by the portfolio of homes, this makes being a member an even better  investment in the way you travel and your[/FONT] [FONT=Times New Roman,Times,Serif]financial  portfolio.[/FONT] ​


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## AKTHUE

*Destination Club Stability?*



TarheelTraveler said:


> I will say that the industry (with perhaps one or two exceptions) is in much better shape than it has been.  At least the amounts charged to members now approximate the costs of the services, as most clubs have had to sustain themselves with few or no sales.  Clearly, many clubs were dependent on debt and new sales to sustain the club, and with the survivors, they either weren't premised on this model (A&K and EE) to begin with or moved away from that model (e.g., Quintess).  We'll still have some major bumps in the road, but the surviving clubs are at least set up better fundamentally.
> 
> Ultimate Escapes to me is the wildcard or renegade club.  It'll be interesting to watch them.  They always seem to have a bold new plan (sometimes out of necessity).  They're not shooting for the middle ground so to speak, and we'll have to see where that gets them.  Again, should be interesting to watch.



I'm not yet sure about Destination Club stability. If dues are going to cover the full cost of services, then a Destination Club has some significant drawbacks compared to just renting homes. When renting, you can select the dates, location, and size you want. With Destination Clubs there has usually been restriction to a week at a time, and limited availability. Sometimes you want 4 bedrooms for a big trip, but other times it is just a couple traveling. I was able to rent a holiday home this year for approximately the Ultimate Signature effective per day cost.

Something about the model of big membership fees and full per day cost may have to give. My impression has been that a big chunk of destination club operating expenses has been in sales & marketing & executive salaries. It's not sustainable to pay all these expenses and be cost-competitive with renting.

As to Ultimate Escapes, the prospectus they filed for their secondary offering is interesting reading. A good chuck of the 2009 revenue was from a special assessment, and they list assessments as an ongoing source of revenue, something that the members certainly do not exepct. They only ended up raising about $8 million from their SPAC merger with Secure America, so they really need to raise new funds from this secondary offering, or they will be in trouble in 2010. It will be interesting to see how this plays out.


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## TarheelTraveler

While I'm not crazy about their portfolio, M has said that their dues inflow exceeds their expenses, and consequently are not raising dues.  Definitely nice to see that in the industry.  A&K did not raise dues for newer members, and only raised the dues for older members on older plans, but only a few % in accordance with bylaws.

While DCs are not necessarily cheaper than renting right now, they do give you consistency and travel simplicity.  I know that the house will be as promised or better.  It takes minutes to book, rather than hours scouring the internet and hoping for the best when you arrive.  I was just complaining to the wife how it took us three weeks to plan a trip outside of the Club, when I'd spend less than an hour with the Club, with a better end result.

I also think the desperate rental deals as of late will eventually end.  We've got an upside down market right now with leases being cheaper than owning, never mind giving some sort of capital return to the owner.

UE's biggest challenge right now IMHO is how do you pay for the debt, while remaining cost competitive with competitors with no or little debt.  UE's pricing seems as low or lower than the competition, yet the cost structure, just taking into account debt, has got to be significantly higher.

UE is doing the right thing by selling their strongest suit which is a larger portfolio with more residence destinations.  But I'm not sure if they can generate the 250+ sales projected.  And I don't think another assessment is an acceptable option.  And I don't know that members will ante up for another buy one get one offer given how the first turned out.  I guess that explains the recently filed public offering statement.  It's interesting that they did it so quickly after going public and before the first financial results as a public company from Q4.


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## TarheelTraveler

This explains the need for speed on the secondary public offering.

http://www.prnewswire.com/news-rele...tion-of-planned-public-offering-83839962.html

"...As previously announced, following the closing of the Company's acquisition of Ultimate Escapes Holdings, LLC (the "merger"), the Company was notified by the Exchange that it failed to satisfy the Exchange's original listing standards.  As a result of the Company's non-compliance, the Exchange advised the Company that its securities were subject to delisting unless the Company requested a hearing before a Listing Qualifications Panel of the Exchange's Committee on Securities (the "Panel").  Accordingly, the Company requested a hearing and appeared before the Panel on January 28, 2010. At the hearing, the Company conceded that it did not satisfy all applicable original listing criteria as it was required to do upon completion of the merger.  Notwithstanding, the Company advised the Panel that it has filed a registration statement  with the U.S. Securities and Exchange Commission on Form S-1, for a secondary public offering  that the Company expects will, if completed, enable it to satisfy all applicable original listing criteria. 

On February 2, 2010, the Panel issued its decision.  ... In furtherance of this process, on February 4, 2010, the Exchange Staff notified the Company that the Exchange had cleared the Company to file an Original Listing Application (which the Company filed with the Exchange on February 5, 2010), thus facilitating the Company's continued listing on the Exchange, _provided the Company successfully completes its planned public offering on or before February 16, 2010_, and thereby demonstrates compliance with all applicable original listing criteria.  Accordingly, the Company's securities will remain listed on the Exchange pending the completion of the planned public offering on or before February 16, 2010."

A&K Residence Club Luxist article by Susan Kime:

http://www.luxist.com/2010/02/09/abercrombie-and-kent-residence-club-members-choose-their-favorite/

"The shared ownership industry has made huge strides since timeshares first hit the scene in the 1970s. Besides the market's continued growth even during last year, called fittingly the annus horribilis by many, there has been a noticeable shift in quality and design aesthetics of purchased residences.. Gone are the basic ski chalets with cuckoo clocks, and plastic fern-festooned condos of the early years, and in their place are exceptional high-end residences where every element, both inside and out, is designed with painstaking detail....

Last month the club asked the 100 plus members, which of the residences and diverse vacation experiences within the homes they liked best .The results of the Abercrombie & Kent Residence Club annual member survey are in, and top honors for "Favorite Home" go to Hale Pu'uhonua, located on the Big Island of Hawaii. Located a short distance from the ocean and white sand beaches, Hale Pu'uhonua is a spacious four-bedroom island getaway located in the Mauna Lani Resort on the Kohala Coast. Part of the Champion Ridge subdivision, the residence is part of the only residential development in Hawaii designed around an 18-hole putting course. Perfect for large groups of family and friends, it has separate entrances to each suite as well as an epicurean kitchen, heated pool, outdoor shower and fully-equipped theater room. Upscale island decor, including thatched ceilings and mahogany trim throughout, sets the mood for a relaxing vacation in one of the Big Island's sunniest and most beautiful areas.

"This home feels like vacation when you walk through the doors," wrote Club member Corey Lovering. "The layout is fantastic. It affords privacy for its guests with distinct bedrooms with their own entrances/exits and provides well thought out, comfortable shared living spaces. It easily housed our two families. The home has amazing indoor/outdoor living space that spills out to the beautiful infinity pool overlooking the putting course...I could stay there, and have, over and over again...we've had tons of great times there and have memories to treasure for a lifetime."..."


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## TarheelTraveler

*Quintess PGA Tour Club*

*Quintess PGA Club*

http://www.sherpareport.com/destination-clubs/access-golf-the-tour-club.html

"...The Tour Club members and their guests have access to some of the top golf courses as well as special, "inside-the-ropes" experiences at PGA Tour events. Some of the more notable properties include TPC Sawgrass, Ponte Vedra, FL; TPC Jasna Polana, Princeton, NJ; Sage Valley Golf Club, Graniteville, GA; and Wynn Golf Club, Las Vegas, NV. At the same time members have access to luxurious homes which are located at some of the most sought-after golf destinations. 

The special experiences can include setting the pins with a Tour official on the morning of play, access to the TV control centers, attendance at the World Golf Hall of Fame induction ceremony, and even the ability to walk with the pros as an honorary observer. 

"Through our strategic alliance with the PGA Tour, we are able to offer a compelling alternative to companies seeking a sharper competitive edge. In April, we are looking forward to complementing the corporate membership by introducing a family membership that offers unparalleled access to the world of golf." said John Fechter, the Tour Club President. 

Membership in the Tour Club includes: 
Golf Residences - Access to a growing portfolio of luxury residences (each valued at $2+ million) at some of the most sought after golf destinations in the world, including The Wynn, Las Vegas, NV; Pelican Hill, Newport Coast, CA; Sage Valley Golf Club, Graniteville, SC; Atlanta National, Atlanta, GA; and Pronghorn, Bend, OR. Additional destinations that will be added to the portfolio within the next 90 days include: TPC Sawgrass, Ponte Vedra Beach, FL; CordeValle, San Martin, CA; TPC Scottsdale, Scottsdale, AZ, and TPC Jasna Polana, Princeton, NJ.
TPC Network National Membership -Corporate membership with the PGA Tour's TPC Network includes 35 TPC facilities and affiliated courses, 22 of which are private. Unique guest sending privileges across the TPC Network are also available exclusively to members of the Tour Club. The Network includes nationally ranked private clubs such as TPC Potomac at Avenel Farm in Washington D.C.; TPC Sugarloaf in Atlanta, GA; and resort courses such as TPC Sawgrass.
Extraordinary Experiences - Unique experiences including golf outings held in conjunction with high-demand corporate entertainment events including the Kentucky Derby, the NCAA Final Four, and NASCAR races. the Tour Club has over a dozen experiences listed on its 2010 calendar.
PGA Tour Tournaments and Events - VIP access for Members and their guests to a wide variety of events across the PGA Tour, the Champions Tour, and the Nationwide Tour, including "behind the scenes" access, guided tours of the clubhouses and media centers at Championship Management events from the Tour Club staff.
Tour Academies Worldwide - Tour-level training with top instructors and proven state-of-the-art technology based on instructional techniques used successfully by top touring professionals.
Private Golf Clubs Worldwide - Exclusive access to a portfolio of nationally ranked, private golf courses through partnerships with the Tour Club and a proprietary reciprocal "Play-Away Network", which enables Members to host each other at their home courses.
The Tour Club Dedicated Golf Concierge - The Tour Club concierges are responsible for providing seamless travel and event planning services for Members and guests anywhere in the world."

Memberships 
The club currently offers three membership levels for small, medium and large companies:

  Small Mid Large 
 Residential Reservations * 14 28 56 
 PGA Tour Passes 25 50 100 
 Golf Experiences 2 4 8 
 Initiation Fee $200,000 $370,000 $690,000 
 Annual Dues $39,000 $68,000 $123,000 

* Residential Reservations are the nights per year, that club members can stay at club homes.
All three membership levels also include TPC National Golf Membership (with access to over 30 courses, including 21 private courses) and umlimited professional-level instruction at any Tour Academy for the Primary Member.

Sister Club 
Members of the Tour Club can exchange their nights for stays at Quintess homes on a 3 Tour Club nights for 2 Quintess nights basis. Similarly Quintess members can also exchange their nights for stays at the Tour Club homes. 

Quintess members can also upgrade to membership with Tour Club golf priveleges by paying an initial fee and increased annual dues of about $10,000...."

While not cheap, sounds very cool if you're a golfer.


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## Bourne

Thank you for the updates.


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## PerryM

*DC owners unite!*

I don't own a DC and at this point have no intention of buying one in 2010.

However, you DC owners really need your own website and forum to have a place where owners can congregate independent of anyone but yourselves.

It costs about $8 per year for the domain name and $60/year for the hosting site.  Total cost is less than $70 per year.  The forum programs are free and so are blogs.

Don't rely on this website or others to keep informed among yourselves.

This is the best advice I can give to DC owners at this stage....


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## UnhappyInCT

AKTHUE said:


> As to Ultimate Escapes, the prospectus they filed for their secondary offering is interesting reading. A good chuck of the 2009 revenue was from a special assessment, and they list assessments as an ongoing source of revenue, something that the members certainly do not exepct. They only ended up raising about $8 million from their SPAC merger with Secure America, so they really need to raise new funds from this secondary offering, or they will be in trouble in 2010. It will be interesting to see how this plays out.



Secondary offering has been called off and UEI is now delisted.  Jim Tousignant blamed it on "the difficult market conditions over the last several weeks".

Give me a break.  Anyone taking a serious look at the prospectus would have been a fool to invest.  They are going to lose money in 2009 even after the assessment and even if they somehow turn it around in the future, JT retains all voting control.


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## AKTHUE

*Ultimate Escapes Canceled Secondary & Delisting*



UnhappyInCT said:


> Secondary offering has been called off and UEI is now delisted.  Jim Tousignant blamed it on "the difficult market conditions over the last several weeks".
> 
> Give me a break.  Anyone taking a serious look at the prospectus would have been a fool to invest.  They are going to lose money in 2009 even after the assessment and even if they somehow turn it around in the future, JT retains all voting control.



Actually Ultimate Escapes is now listed on the OTC bulletin board system, the "pink sheets" which is more appropriate for the low volume that it trades. I think the new symbol is ULEI. 

Agreed: the reason Tousignant has given is BS. He couldn't find any suckers or structure any terms on which to attract any meaningful new investment.

I was shocked to see in the prospectus for the secondary offering how much equity and voting control Tousignant had been able to retain after the SPAC merger. The entire SPAC transaction stinks to high heaven. $72 million of the SPAC's money was spent to buy the vote, and only a few suckers hung on to the stock. The final trade yesterday was a bit above $2. And somehow Tousignant has the right to convert a dubious $10 million note into a majority of the dquity. And he got his board to grant him $3 million in restricted stock. Unbelievable.

Ultimate Escapes has no equity value. There is way too much debt and no way to service the debt. 

I doubt the financial statements paint an accurate picture of how many members are "suspended" or non-paying. Ultimate is going to be boxed into a corner very quickly and the lender Capital Source will either seize the properties or force them to start selling properties to pay them back, or Jim Tousignant will be coming back to the members with another special assessment as the only course he sees.


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## Chicagomark

*How about the Quintess Lawsuit?*

Anyone else following (Tarheel Traveler) the lawsuit against Quintess? It is titled,  Molu Kaukale LLC Vs Quintess/Monogram Real Estate LLC. Orange County CA, 30-2009-00326411-cu-bc-cx c


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## TarheelTraveler

CM - I haven't been following the Quintess suit, but I did look it up.  I would post the complaint, but I don't know how to do that on this site.

Allegations are as follows:
Essentially deals with a house in Hawaii that Quintess/Monogram contracted to buy at 5.15M.  Supposed to have a delayed closing in April of 08.  Rent of $23K/month escalating to 27K/month.  Supposed to be getting financing.  Extended closing dates 6 times.  Did not close.  Supposedly took furniture that was in property and replaced it with "second-hand" furnishings, and haven't returned original property in house.

There is also a second lawsuit (Jerry Fuller versus Quintess) involving another house in Hawaii pending in the same court.  Supposed to be leasing a house for 44K/month + utilities and services + 44K security deposit. Allege that Quintess failed to pay and now losing house to foreclosure.

There is also another new lawsuit against Ultimate Escapes from a disgruntled member who has not received his membership deposit back.  This one is a little different in that it alleges RICO violations.

Before people start thinking every DC is mired in lawsuits, certain clubs have no litigation pending against them.


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## travelguy

TarheelTraveler said:


> There is also another new lawsuit against Ultimate Escapes from a disgruntled member who has not received his membership deposit back.  This one is a little different in that *it alleges RICO violations*.



I'm surprised that RICO wasn't called into play before.  RICO is hard to prove but is a real game changer if there is even the possibility it can be proven.

IMHO ... Feds + triple damages + expensive to defend + the criminal aspect? = NO "up" side for UE


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## Chicagomark

*Rico, Not Sonny Crockett's Partner on Miami Vice....*

Guys & Gals-Rico can only be used where in fact you have a crime. No crime, no Rico. Not refunding someones membership is a matter for a civil action, not a criminal action. The lawyer on the case seems to be a jack of all trades if you look at his website-and if you have Lexis/Nexis access not another case brought by him can be found-his parents divorce in Texas can be found, but no cases that he has brought as counsel. 

http://www.ricoact.com/ricoact/index.asp


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## TarheelTraveler

The ramifications of a successful RICO action are very bad, but like ChicagoMark noted, it's also hard to prove.  They allege the Club was a "Ponzi scheme," and they had no intent to pay back deposits.  It's one thing to prove that they're not complying with the contract to give back the deposit, but another to prove that they fraudulently intended to not ever pay back the deposit.  Still probably not a bad thing to throw into a complaint to increase your chances of getting your deposit back.


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## travelguy

CM - Agree with what you are saying (which is why I put a "?" after "the criminal aspect") but I don't believe it's a stretch to get to RICO.  You could be correct that this particular attorney may not be capable of getting there.

TT - Insightful as usual.  IMHO, Alleging a Ponzi scheme is not going to get them to RICO ... too hard to prove.

That said, IMO there is another avenue that a good lawyer may be able to show goes directly to RICO.

I'll decline to discuss more based on what happened over at DC4MS.  (And please don't PM me about UE or DC4MS). 

_Disclaimer - Not a UE member (I've got no dog in this fight) and not a lawyer._


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## AKTHUE

*What happened to DestinationClubForums*



travelguy said:


> I'll decline to discuss more based on what happened over at DC4MS.  (And please don't PM me about UE or DC4MS).



It's too bad you cannot tell us what happened to DestinationClubForums, which was a great resource. 

It speaks volumes that you cannot talk about UE or DC4MS. It says something about the ethics of UE that they feel they need to prevent UE members from having free discussions among each other.


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## PerryM

*Fish or cut bait...*



AKTHUE said:


> It's too bad you cannot tell us what happened to DestinationClubForums, which was a great resource.
> 
> It speaks volumes that you cannot talk about UE or DC4MS. It says something about the ethics of UE that they feel they need to prevent UE members from having free discussions among each other.



I know nothing about what happened overt here at DC4MS but its obvious to me that lawyers are busy at work there.

Most/all the guys who cook up DCs are hustlers and can't have their names easily searched on Google with folks bashing the huckster.

Forget TUG and DC4MS and start your own forum where only DC members can get into parts of it and agree to a non-disclosure which prevents folks from blabbing about what's said and will pay dearly for doing so.  The reset of the forum can be chit-chat for folks to visit.

If you guys don't, you aren't serious are you?


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## pwrshift

I'm at the point that no DC will ever get my money ... even the public companies are out on a limb IMO.  The 'industry' is dead.  Fool me once, and you won't do it twice...


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## TarheelTraveler

Some food for thought....

Isn't that like saying you would never buy a timeshare because there are some shoddy timeshare companies out there?

IMHO, the public DC that's out there is probably the one that people worry about the most among the major DCs.

Just curious, since you're a fan of Marriott timeshares, would you buy into the Ritz-Carlton DC?


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## TarheelTraveler

*Quintess*

This answers the question on DC4MS about whether the new La Samanna's villas were a lease or a purchase.

http://www.prnewswire.com/news-rele...rter-and-full-year-2009-results-85092437.html

"....In December, the Company [Orient-Express] entered into a deferred sale agreement with the luxury destination club Quintess, The Leading Residences of the World, which has the option to purchase four of La Samanna's free-standing villas for proceeds of $16 million in the first year, $17 million in the second year or $18 million in the third year and will make option payments of up to approximately $0.9 million on each villa...."

Susan Kime Luxist article on Quintess and improvements in the industry from a transparency standpoint:

http://www.luxist.com/2010/02/23/the-design-of-a-great-vacation-quintess-and-the-destination-clu/

"As with many great ideas, the destination club idea was not born in a vacuum. Its distant ideological cousin, the timeshare, originated in the '70's in Europe. It was a simple idea, buying space for time, but because of some developers' sales techniques, the timeshare developed a less than stellar reputation. However, the idea itself remained viable, and it evolved – from owning a 1/30th share in a small apartment, to owning shares in much more substantive residences, and in the clubs themselves,. The membership deed or the fractional share all came with significant amenities: private chefs, limo drivers, dedicated destination hosts, existing only to make dinner arrangements, acquiring the best concert tickets, creating worry-free vacations on every known dimension.

The destination club idea took hold in the early 2000s. In the beginning, were the nonequity clubs, then came the equity based ones. With the former, the member did not own anything, paid a one-time membership deposit, annual dues, and vacationed in elite destinations in $2-6M homes. With the equity-based clubs, the members owned the clubs, bought the homes and had much to say in the club management. 

But there was a dark side to this idea – and it was its explosive and unexpected growth. In 2003, the sales volume was a modest $513.M. In 2006, it ballooned to $2.5B. 

All went well until the industry hit a major bump in July of 2006, with Tanner & Haley, the first Destination Club, to bankrupt, followed by many others. Out of the 31 functioning destination clubs extant in 2006, there are now, in 2010, five. But these five are strong,fiscally transparent, and consumer-centric, taking a lessons-learned approach from the failed clubs. The equity-based clubs, where the members own the residences, are Equity Estates, and Abercrombie & Kent Residence Clubs. The non-equity clubs, are Exclusive Resorts, oldest and largest, Ultimate Escapes, the second largest with has multi-leveled membership plans, and, Quintess arguably, one of the smaller and most boutique-like, with many architecturally significant homes, all priced at 4M and up...."

Goes on to describe the founder's favorite Quintess homes.


----------



## PerryM

*The 16% solution????*



TarheelTraveler said:


> This answers the question on DC4MS about whether the new La Samanna's villas were a lease or a purchase.
> 
> http://www.prnewswire.com/news-rele...rter-and-full-year-2009-results-85092437.html
> 
> "....In December, the Company [Orient-Express] entered into a deferred sale agreement with the luxury destination club Quintess, The Leading Residences of the World, which has the option to purchase four of La Samanna's free-standing villas for proceeds of $16 million in the first year, $17 million in the second year or $18 million in the third year and will make option payments of up to approximately $0.9 million on each villa...."
> 
> Susan Kime Luxist article on Quintess and improvements in the industry from a transparency standpoint:
> 
> http://www.luxist.com/2010/02/23/the-design-of-a-great-vacation-quintess-and-the-destination-clu/
> 
> "As with many great ideas, the destination club idea was not born in a vacuum. Its distant ideological cousin, the timeshare, originated in the '70's in Europe. It was a simple idea, buying space for time, but because of some developers' sales techniques, the timeshare developed a less than stellar reputation. However, the idea itself remained viable, and it evolved – from owning a 1/30th share in a small apartment, to owning shares in much more substantive residences, and in the clubs themselves,. The membership deed or the fractional share all came with significant amenities: private chefs, limo drivers, dedicated destination hosts, existing only to make dinner arrangements, acquiring the best concert tickets, creating worry-free vacations on every known dimension.
> 
> The destination club idea took hold in the early 2000s. In the beginning, were the nonequity clubs, then came the equity based ones. With the former, the member did not own anything, paid a one-time membership deposit, annual dues, and vacationed in elite destinations in $2-6M homes. With the equity-based clubs, the members owned the clubs, bought the homes and had much to say in the club management.
> 
> But there was a dark side to this idea – and it was its explosive and unexpected growth. In 2003, the sales volume was a modest $513.M. In 2006, it ballooned to $2.5B.
> 
> All went well until the industry hit a major bump in July of 2006, with Tanner & Haley, the first Destination Club, to bankrupt, followed by many others. *Out of the 31 functioning destination clubs extant in 2006, there are now, in 2010, five*. But these five are strong,fiscally transparent, and consumer-centric, taking a lessons-learned approach from the failed clubs. The equity-based clubs, where the members own the residences, are Equity Estates, and Abercrombie & Kent Residence Clubs. The non-equity clubs, are Exclusive Resorts, oldest and largest, Ultimate Escapes, the second largest with has multi-leveled membership plans, and, Quintess arguably, one of the smaller and most boutique-like, with many architecturally significant homes, all priced at 4M and up...."
> 
> Goes on to describe the founder's favorite Quintess homes.



All those folks with too much "Pocket Change" got screwed big time.

Why on earth buy a DC with a track record of success is 16%????

DC's are dead but something will replace them - I'm sure there are characters setting in their basement right now cooking up real estate schemes to replace DC's.

Timeshares are hurting right now too - it's no picnic being a timeshare owner but at least you OWN 1/52 of that condo and can use it as long as the owners pay the MFs there.

Let's hope that equity based ownership is the central premise as new DC's get cooked up and other schemes replace them.

Once the members own the organization transparency is assured and the guys running the place answer to the owners.


----------



## TarheelTraveler

PerryM said:


> All those folks with too much "Pocket Change" got screwed big time.
> 
> Why on earth buy a DC with a track record of success is 16%????
> 
> DC's are dead but something will replace them - I'm sure there are characters setting in their basement right now cooking up real estate schemes to replace DC's.
> 
> Timeshares are hurting right now too - it's no picnic being a timeshare owner but at least you OWN 1/52 of that condo and can use it as long as the owners pay the MFs there.
> 
> Let's hope that equity based ownership is the central premise as new DC's get cooked up and other schemes replace them.
> 
> Once the members own the organization transparency is assured and the guys running the place answer to the owners.



I agree with a lot of your points, PerryM, but not necessarily the broad characterizations.  The DC industry has had a very painful start, just like the timeshare industry had a very painful start.

While many on here have argued to the contrary (particularly a year or two ago before some of the big failures of non-equity clubs), there is a fundamental difference as you note between equity and non-equity DCs.  I don't know of a single failure of an equity DC, while you can find 20 or more non-equity DCs that have failed.  The difference as you note is ownership.  As long as the members of the equity DC pay their fees, they continue to use the properties that they own just like with the timeshare concept.

However, I personally think the equity DC structure is far better than the typical timeshare structure in that you've got less owners per property (not 52 but 7), much more availability as a result, higher end properties, much better personalized service and more of a home like feel.  Of course, this comes at a cost which at least for me is well worth it.

I also think the equity DC structure is better than most fractionals in that the bain of fractionals is always with exchanges.  I just go into the reservation system and pick the destination without having to worry about exchanging, exchange fees, timing, etc.

I've said on here and DC4MS many times that I have a hard time figuring out what the benefit to the members would be of a non-equity DC format.  However, there are some good equity DC choices out there like Ritz-Carlton and Abercrombie & Kent.  Just like there are some good timeshare choices out there as well.


----------



## PerryM

*Black and Blue*

I absolutely love the concept of a Point Based DC with 100% equity ownership - maybe someone will actually start one.

That membership would be close to WorldMark but with more forethought of how the thing should be actually run.

Who knows what the DC industry will morph into but it has a black and blue eye that blue bloods will shun for the rest of time.

Better to start something brand new than try to breath life into DCs.


----------



## Kagehitokiri2

how many times do we have to say the same thing perry? you never listen to any of us. ever.

luxus vacation properties = only owned homes with no debt and point system
it is literally not possible to be any more conservative.

and again the whole point of DCs is that they are exchange-free. 

heh tarheel, i was thinking about checking out their latest financials. sorry for being slow. 

my previous account - http://www.tugbbs.com/forums/member.php?u=13560 
(cant access it, if mods want to merge/etc - whatever works.)

http://www.exclusiveresorts.com/#2009_YIR
http://www.exclusiveresorts.com/images/BR-YIR2009-PROSP.pdf
3259 members
one third empty nesters (attention *pwrshift*)
379 resignation list (could be worse...)
$360MM "bank" debt (is this worded to exclude private equity?)


----------



## PerryM

*VRBO!!!*



Kagehitokiri2 said:


> how many times do we have to say the same thing perry? you never listen to any of us. ever.
> 
> luxus vacation properties = only owned homes with no debt and point system
> it is literally not possible to be any more conservative.
> 
> and again the whole point of DCs is that they are exchange-free. everything else varies.
> 
> heh tarheel, i was thinking about checking out their latest financials. sorry for being slow.
> 
> my previous account - http://www.tugbbs.com/forums/member.php?u=13560
> (cant access it, if mods want to merge/etc - whatever works.)
> 
> http://www.exclusiveresorts.com/#2009_YIR
> http://www.exclusiveresorts.com/images/BR-YIR2009-PROSP.pdf
> 3259 members
> one third empty nesters (attention *pwrshift*)
> 379 resignation list (could be worse...)
> $360MM "bank" debt (is this worded to exclude private equity?)



I actually believe that the guys who cooked up all the crazy DC schemes out there had something - folks want to fork over vast sums of money on risky ventures as long as the person on the other end of the line makes booking a villa easy.

I've been exposed to probably 20+ folks in the past 2 weeks who spend $1,500+ per day for a nice Maui Condo and love VRBO - they trust it and love the selection.

This absolutely floored me and next week I'll be listing in VRBO myself; I listened too much to DC folks!

I mean these folks absolutely love and believe in VRBO and use it all the time.

Anyway, DCs are dead and folks who want easy bookings will have fewer and fewer DCs to choose from.  The real estate market is nowhere near bottoming out; neither are DCs.


----------



## Kagehitokiri2

why i even bothered addressing you i dont know... carry on.

if you want to rent, do DC trials for ~$1K/nt >
- quintess - raffles canouan (~$12K+) la samanna (~$5K+) amangani (~$5K+)
- exclusive resorts - ritz carlton grand cayman, sea island resort, ritz carlton fort lauderdale
- banyan tree private collection - banyan tree seychelles (~$4K+)

potentially the most interesting "hybrid" - belvedere @ karma kandara >
DC-style use + rental income from owned hotel condo/villa + possible quintess exchange

btw, just looked at PH towers rates - 4BR upper 12/25-1/1 AAA $6,307.84. did you stay at PH towers this past NYE? if you did, you didnt happen to tour residences did you? keep hope alive for low min lease. mandarin oriental is 6 months. better than 12, but still a bummer.


----------



## TarheelTraveler

Is an argument more persuasive if you just throw out (usually extreme) opinions as fact?  Maybe I should say timeshares are dead, because the biggest player, Marriott, is not developing them and have been taking a beating from the sector.  Sure I could say that and it's nice because it sounds black and white, but it's not reality.

As mentioned on DC4MS, Crescendo had a points based system, A&K does not.  As a result, I've done both.  I understand the fairness based arguments behind the points based system.  In fact, I've made that point myself before, and that system is very important in a timeshare system where you're selling out 52 weeks a year, and really need to manage that kind of demand.  However, after trying out the new system, I've really liked not having to worry about high season/low season, holiday/non-holiday.  I book what I want to book without having to spend my points based currency.  I've certainly traveled on a lot more holidays as a result.

As folks have pointed out before (e.g., Kage), points based systems are good for people that have the flexibility/desire to travel non-holiday, non-high season times, because you can get a lot of extra days essentially.  However, it's not so good for those in the opposite camp (usually families with children), as you're paying a lot for when you typically can travel.

VRBO is good for selection, bad for consistency in quality.  With a DC, you know exactly what you're getting *every time*.  You know that you've got a destination host that is keeping the house up (and is there if something goes wrong) and giving you the most current recommendations for a destination, because they live there.  I know what kitchen utensils I'm going to have.  I know that there will be an office with high speed internet access and a printer with paper and printer cartridges.  I'm sure a lot of people don't care about those things and love VRBO, but that's why they have different products for different people.


----------



## AKTHUE

*I Don't Love VRBO - But I no longer trust DC business model*



TarheelTraveler said:


> I'm sure a lot of people don't care about those things and love VRBO, but that's why they have different products for different people.



I don't love VRBO at all. It is a PITA. It is a lot of work. You can't search for availability. You can look at online calendars one at a time, but you can't count on them to be accurate. You email people and wait for a response or play phone tag. There are no quality standards.

If I could search for A platinum-rated 2-bedrooom within 5 minutes walk of {slopes, beach, Central park, etc.} for certain dates - maybe then I can take the risk. If there is something out there like this, please tell me where to find it!

There is an opening for someone to develop something meaningful.

Whatever you want to say about Perry, I think he is right that the Destination Club concept is dead. If someone took that model and just sold it on a per-night basis, with no big up-front deposit, maybe there is a market for that, but I suspect the per-night costs would be up there like Quintessentially chalets & villas. The Destination Clubs as currently structured have way too high of overhead expenses and sales expenses that were funded from the membership deposits and predicated on real estate appeciation and borrowing. Everything that Tousignant has done has been based on deception and manipulation. I predict that UE is going to have a dramatic crash and burn in 2010.


----------



## PerryM

*Basement management?*

Can DC's, the ones still alive, make it through the real estate debacle?

Personally I don't think they can but timeshares will survive - mom and pop versus Fortune 500 companies running them.  It's that simple.

The DC industry has just imploded and to try to revive a fallen deck of cards is just a waste of time because folks will be gun-shy for many years to come once we rebound.

Better to morph into something brand new - how about a Point Based Co-op where management gets paid a salary and owners put up venture cash to own homes/villas and they share in all potential revenue?

Why the same old DC model of hucksters running a DC out of their basement?

P.S.

If you guys have time on your hands while real estate keeps puking it's guts out draw up the documents for a new DC replacement.  Don't wait for hucksters to jump out of the basement with slick advertising and slick salesreps calling folks on the phone again.


----------



## Kagehitokiri2

*PerryM*, again, luxus.

*TarheelTraveler*, my best might have been >


> points are better for people who want more travel time - lower season, cheaper accommodation, or both.
> 
> no points are better for people who want more expensive stuff - holidays, expensive accommodation, or both.
> no points also means unlimited free use is possible.



as mentioned you can use DC trials to access luxury resorts/hotels, and ive also seen plenty of private rentals. (at a discount) for example >
- four seasons punta mita (hotel villas and fractional condos) 
- setai miami (condohotel)
- four seasons sharm el sheikh (hotel villas and hotel condos)

***

high end rental companies, compiled on 11/10/09 >

all properties include local host and daily housekeeping
- Chalet Spa $1.7K > $32K+ (includes butler, chef)
- Villazzo $2K > $29K (includes transfers, bellstaff at arrival/departure, unpacking)
- Homes Away $700 > $6.6K+

inclusions/staff varies
~ Scott Dunn  (some with nannies and catering)
~ Abercrombie & Kent  $165 > $5.1K [used EU site at time, i believe they have new villas since then]
~ there are lots of catered chalets in europe

new from villazzo (no inclusions, weekly housekeeping) 
x Villazzo V Villas  $1.5K > $12K


----------



## PerryM

*Track Records this time around*

When the original hucksters cooked up DCs in the basements back around 2005 they had no track record to fight - this time around they have a dismal track record to fight.

DC's have proven to be a horrible real estate gimmick and I guess the remaining DCs can fight their past performance but why?

Cook up something different....

DC's for the most part are just a few pages of legal stuff - easy to make something else on those same few pages.


----------



## Kagehitokiri2

is it hard to never address anything else that is said? or do you literally not even read it?

i personally define DC as exchange-free. thats it. 

thinking about it, those residence exchange things could be more like a DC if they required a huge minimum "deposit" (of days in a residence). and of course they have to make it a legal entity, which i dont think any of them has mentioned so far.

re ultra high end exchange 


			
				Kagehitokiri said:
			
		

> the only thing that would be really new would be a TTT-style setup that is exclusively ultra high end. (like properties that arent allowed to be rented out, but could be exchanged.)





			
				SciFrog said:
			
		

> Ultra high end and trade doesn't work.
> 
> I would never let anyone else but me and guests in an ultra high end home...





			
				Kagehitokiri said:
			
		

> trading like for like...
> 
> plaza NY 9.2Kft2 6/15/07 $51.5MM
> MO NY 8.3K ft2 3BR 12/14/05 $30MM (similar unit "quietly" for sale for $80MM)
> st regis san francisco 20K ft2 $30MM 12/05 (on market for $49MM)
> RC central park 10.2K ft2 5BR 1/5/07 $27MM
> trump NY 6.3K ft2 3/5/08 $26MM
> montage laguna beach 4BR 7/17/09 $17.7MM
> 
> on market >
> mark NY 9.8Kft2 5BR $60MM
> RC grand cayman 20K ft2 $44MM
> MO boston 8K ft2 $17MM



very nice upgrades for EE http://www.sherpareport.com/destination-clubs/new-homes-equity-estates-0210.html
question as always - where do they stand on owned/leased

equity, varying
- AK
- m private residences
- hideaways club
- EE
- luxus vacation properties
- rocksure (third fund - euro capitals - is larger than first two)

nonequity, backed?, not out of woods
- ER
- Q

other nonequity
- UE (all news is bad news)
- oyster circle (no news is bad news)


----------



## TarheelTraveler

PerryM said:


> Can DC's, the ones still alive, make it through the real estate debacle?
> 
> Personally I don't think they can but timeshares will survive - mom and pop versus Fortune 500 companies running them.  It's that simple.



Call me crazy but I thought Ritz-Carlton/Marriott was a Fortune 500 company and A&K was a $1 Billion/year revenue company, with thousands of employees.  Do those companies count as mom and pop companies run by people working out of their basement?

Let's also look back at history.  Weren't timeshare companies for the most part started by a bunch of fly by night hucksters?  I never would've thought that timeshares would overcome the terrible reputation that they had, but low and behold, you get a Disney and a Marriott and a Hilton, and then all of a sudden it's big business with at least some degree of credibility.


----------



## Kagehitokiri2

i wasnt going to bring it up, but when RC DC discussion started on DC4MS, *PerryM* was posting about how >
1 - it was greatest thing ever (ignoring point system and subsidy) 
2 - it was the end of all other DCs (even though it being unsold fractional inventory = not necessarily that DC like)
3 - he was going to buy resale for $1 or something (no ROFR from marriott, what?)

not to mention DCs couldnt cover costs because they were too cheap.

timeshare model is to charge AMAZING ripoff prices of crappy condos, both up front, and then on a yearly basis. they rely on people not understanding (in the VAST majority of the time) that it is such a ripoff. then once they make the first sale, they dont care, because they have the yearly income forever.

at least with fractionals you can have luxury products at not that high a markup.


----------



## travelguy

A DC Reunion!

It's just like old times on DC4MS with the likes of Tarheel, PerryM, Bourne, PShift & Kage discussing the validity of the Destination Club concept!  All we need is Steamboat to complete the conversation.

_Good Memories and good times ... except for the money loss ... and the fraud ... and the personal attacks ... and the lawsuits ... and .... _

BUT ... the travel was _AWESOME _while it lasted!!


----------



## Kagehitokiri2

"exchange-free" as a model is pretty simple, regardless of successful implementation.

for the lawyers - http://blog.bluestonelawfirm.com/legal-malpractice-news-escrow-and-legal-malpractice.html


----------



## PerryM

*My definition of DC form bygone years...*

Kagehitokiri2 sent me some links that appear to be the next evolution of DC's - companies that accept your whole/fractional/timeshare and create a currency (Points) that you get when someone stays at your unit (some give some cash too).  You then take the currency you just earned and can spend at other units in the club.

I believe that I presented the same idea 3+ years ago either here or on DC4M - it's a good idea!  Is it a DC though?  I don't think it is but that's just semantics.

As long as you own equity in the "club" and it can't be taken away from you then these clubs are the successors to the old DCs.

Here's the list and its fun reading:

http://www.sherpareport.com/destinat...ches-1209.html
http://www.thecimacollection.com/
http://www.worldkeyclub.com/
http://www.tradetotravel.com/

I only spent a total of 15 minutes reading them and will read more carefully next week.  

To me the definition of a DC club was and will always be:

*"8 guys get together and buy a rich guy a villa and then pay him rent to use it"* - I said that 3+ years ago.

If the industry wants to move past that definition into something else they need to drop the anchor Destination Club which will always be tied back to an idea that just didn't work - especially in imploding real estate markets.

These new clubs are worthy of investigation.  I just hope that when I do get time to understand them I don't find the guy who cooked up High Country Club behind one or more of them.


----------



## Kagehitokiri2

anyone can define DCs/anything however they want, but that doesnt make it accurate.

with DCs pretty much the only thing that is universal is exchange-free use. hence my use of "DC-style usage" to mean exchange-free.

TTT has been around a long time. along with other home exchange things. and some of the fractional exchange companies. not to mention timeshare ones.

demeure is talking about buying properties. that makes it more than an exchange network, which is what the others linked are. but that doesnt make demeure a DC. because deposits of time are uneven. (1 day > 1 year, etc)

why did i send it? i dont know. im a glutton for punishment? mainly because you keep saying all this stuff that has nothing to do with anything. on the rare occasion you participate in a conversation, you contribute interesting stuff.


----------



## pwrshift

It's a little like the DC4MS guys left the nest to go out on their own and had to come back home after the outside world didn't work out their way. Welcome home ... be sure you make your own beds and pay rent. 

It really was fun while it lasted, but a lot of people got hurt along the way...and those that didn't are very unsure about their future. Sure glad I 'own' my Marriotts. And, hey TG ... no shag carpets anymore.




travelguy said:


> A DC Reunion!
> 
> It's just like old times on DC4MS with the likes of Tarheel, PerryM, Bourne, PShift & Kage discussing the validity of the Destination Club concept! All we need is Steamboat to complete the conversation.
> 
> _Good Memories and good times ... except for the money loss ... and the fraud ... and the personal attacks ... and the lawsuits ... and .... _
> 
> BUT ... the travel was _AWESOME _while it lasted!!


----------



## Kagehitokiri2

how many people are posting? not many.

i rejoined to mention luxus in response to *PerryM*.

AFAIK a lot of UE members got pretty organized a while ago with some email lists/exchanges.

ER members have their own forum. they, Q, AK, EE (members) are happy at the moment. while the first two of those may not be totally out of the woods, they appear to have backing. same with AK, and their model is more much more conservative. for me the unanswered question re EE is what is contractually linked to debt payments.


----------



## travelguy

pwrshift said:


> It really was fun while it lasted, but a lot of people got hurt along the way...and those that didn't are very unsure about their future. Sure glad I 'own' my Marriotts. And, hey TG ... no shag carpets anymore.



I gotta say that there is some relief in knowing the fate of my DC, regardless of the outcome.  IMO, It's better to know your DC is dead than continue to pay dues without knowing the final outcome.  The toughest part of the HCC saga was the last half year when we had to make backup plans for all travel because HCC was so day-to-day.

I am still actively looking for a "safer" and "affordable" DC because I've become addicted to luxury accommodations.  I continue 12 weeks annually of Timeshare and Fractional travel in the interim.

PShift - Note that I now occasionally travel with a 5 pound Yorkie puppy!  I'll change my avatar to his picture as soon as I can find a "Team USA" hat small enough to fit him.


----------



## travelguy

Kagehitokiri2 said:


> i rejoined to mention luxus in response to *PerryM*.



As you mentioned before, you ARE a glutton for punishment!  



Kagehitokiri2 said:


> ER members have their own forum. they, Q, AK, EE (members) are *happy *at the moment. while the first two of those may not be totally out of the woods, they appear to have backing. same with AK, and their model is more much more conservative. for me the unanswered question re EE is what is contractually linked to debt payments.



I'm not sure "Happy" is the right word.  Maybe just not as "concerned" as before?

As we've discussed elsewhere at length, I have major questions on the EE biz plan that they have never answered and seem to have sidestepped.


----------



## AKTHUE

travelguy said:


> I gotta say that there is some relief in knowing the fate of my DC, regardless of the outcome.



There are a lot of UE members who would like to be in that position - though some of them don't understand how tenuous it is, or have blind faith.

Now that UE has published its financials, there is no way that UE's debt load or business model is sustainable, and the public markets voted not to give them more capital. 

It is going to be like watching a car crash in slow motion.

UE will be coming back to members with either another special assessment or a significant increase in dues. No one else with give them more money. And if the members give more money again, they still have no equity and no control.


----------



## Kagehitokiri2

*travelguy* - fractional travel?

just got a PM from UE member saying what email list. how did you miss it on DC4MS?  
these are the two i could find >
ultimateescapee [at] yahoo.com
dcmembergroup [at] gmail.com


----------



## AKTHUE

*ultimateescapee@yahoo.com does not work*



Kagehitokiri2 said:


> got a PM from UE member saying what email list. how did you miss it on DC4MS?
> these are the two i could find >
> ultimateescapee [at] yahoo.com
> dcmembergroup [at] gmail.com



Delivery to the following recipient failed permanently:

ultimateescapee@yahoo.com

Technical details of permanent failure:
Google tried to deliver your message, but it was rejected by the recipient domain. We recommend contacting the other email provider for further information about the cause of this error. The error that the other server returned was: 554 554 delivery error: dd Sorry your message to ultimateescapee@yahoo.com cannot be delivered. This account has been disabled or discontinued [#102]. - mta1064.mail.sk1.yahoo.com (state 18).


----------



## Floridaski

*You can search with date range, size with VRBO*



AKTHUE said:


> I don't love VRBO at all. It is a PITA. It is a lot of work. You can't search for availability. You can look at on line calendars one at a time, but you can't count on them to be accurate. You email people and wait for a response or play phone tag. There are no quality standards.
> 
> If I could search for A platinum-rated 2-bedroom within 5 minutes walk of {slopes, beach, Central park, etc.} for certain dates - maybe then I can take the risk. If there is something out there like this, please tell me where to find it!
> 
> There is an opening for someone to develop something meaningful.
> 
> Whatever you want to say about Perry, I think he is right that the Destination Club concept is dead. If someone took that model and just sold it on a per-night basis, with no big up-front deposit, maybe there is a market for that, but I suspect the per-night costs would be up there like Quintessentially chalets & villas. The Destination Clubs as currently structured have way too high of overhead expenses and sales expenses that were funded from the membership deposits and predicated on real estate appreciation and borrowing. Everything that Tousignant has done has been based on deception and manipulation. I predict that UE is going to have a dramatic crash and burn in 2010.



You can use VRBO to search for specific date range, size, number of beds etc.... This is a new feature and you just may not be famliar with their web site updates due to not using the service.

Also, another note - I never rent a VRBO unit unless it has a professional property manager due to the quality and service issue.  If you rent only professionally managed units that have a standard rating system - then you are offered a significant piece of mind.

I have to admit to owning a slope side condo that we rent via VRBO and it is professionally managed - I do not handle keys, cleaning, repairs, lock outs etc... It does cost us some commission dollars, but I had a bad VRBO experience once and it is worth the money to me to insure a good vacation.

We use VRBO often for our own trips and have had wonderful experiences, I think if I can rent a slope side or beach front unit for 30% to 50% from published rates - why would I not save the cash?  If it is professional managed and with the internet search available today - I can sleep at night knowing that all is well with my vacation!

The DC club was of slight interest to our family, but we determined with the cost of entry - we could just cough up additional funds and just purchase a unit that we loved, then use VRBO and timeshare for our other vacation needs.  But it all takes time, regardless of your portfolio...


----------



## Kagehitokiri2

availability search was always possible on homeaway, and after they bought VRBO/others, they have added it to at least VRBO so far.



Floridaski said:


> I never rent a VRBO unit unless it has a professional property manager
> 
> I have to admit to owning a slope side condo that we rent via VRBO and it is professionally managed
> 
> We use VRBO often...if I can rent a slope side or beach front unit for 30% to 50% from published rates - why would I not save the cash?  If it is professional managed



"published rates"? you mean hotel/resort managed? i would not use "professional property manager" when talking about hotels/resorts. and with villa rental companies, clearly there is full spectrum. > http://tugbbs.com/forums/showpost.php?p=871962&postcount=33


----------



## Kagehitokiri2

mispostedxxxx


----------



## AKTHUE

*Online Availability on HomeAway, VRBO*



Kagehitokiri2 said:


> availability search was always possible on homeaway, and after they bought VRBO/others, they have added it to at least VRBO so far.



I guess I have not tried VRBO since you say HomeAway bought them. But I remember trying to use HomeAway last fall, using the online availability search, then emailing the owners, and finding several of them were not available for the dates that I had searched. They told me they have multiple sources for bookings and don't always keep the calendar up to date.


----------



## Kagehitokiri2

certainly a good point. still relying on those calendars. and sometimes the "last updated" is WAY back.


----------



## Floridaski

*defintion of "professional property management"*

When renting a VRBO rental I often ask about a professional property management.  Sometimes this may be the resort - ie if you are renting a Slope side condo in Keystone, Colorado the property management may by Keystone Resorts - cannot get anymore professional then that.  Many buildings have an on-site manger, again this helps with any vacation worries.

Another type of professional property manager might be a local company.  These companies are general rated by trip adviser and the reviewers on trip adviser are ruthless.  The company has to a good job to get 3 or 4 stars.  Our current property management company has an on-site office, 24 hour service and has 119 reviews on trip adviser.

I also ask everyone who checks in - how was your experience.  I am paying our manager for service on the VRBO guests - this cuts my profit, but I have always heard good things.

There are also property managers that run out of a lock box in a shopping center, they may not even have an employee in the area, use contract house cleaning as opposed to employees.  I would not rent a VRBO unit if any of these things were present - you just have to ask the questions.  Many times if the price is to good to be true - they are cutting corners somewhere.  

You just cannot rent a large ski in - ski out condo or a Hawaii beach front condo for a couple hundred dollars.  They cost a significant amount to purchase, to maintain and they are expensive to keep up to a Gold or Platinum level.

I get people all the time wanting to rent our condo on VRBO for half of what I am asking.  My VRBO rates are 50% less then the best sale of resort rates - they get mad at me.  They are offering what I pay at the Hampton Inn - it is all I can do to not give them the Holiday Inn phone number.

Anyway, VRBO is  an option for any DC club member.  You can get that high end unit without the huge cash outlay.

From our Keystone unit, I can see the High Country Club unit that is going to auction next week.  This unit will sell for close to what they club paid for it, but some properties may not.


----------



## TarheelTraveler

These are all good suggestions, which I'll definitely use when I go outside of the DC for travel.  To me it all boils down to how much you want to work the system, how much risk you're willing to take in booking the vacation, and how much risk you have with your current DC or how much risk you would have in joining a DC.  All of those shape the perspectives that you see on here.

For me, I'm in an equity DC with no debt and a good backer, so there's definitely less risk there than other DCs.  Furthermore, I've got limited time, we've got pretty high service and quality expectations and given my personality to run things out to the nth degree, I know that I would spend more time planning a trip than being on the trip, so my DC is perfect for me.  For example, I recently spent more time booking a 3 day weekend trip to Florida than I did booking 5 weeks of DC travel, and the result was not anywhere as good, with service that was pretty disappointing.

However, at the same time, I can appreciate the perspectives on here that say I know how to game the timeshare system, find the best VRBO places, my DC is going to hell, the DC industry is going to hell, I've been burned by a DC and I want the DC industry to go to hell, or whatever.  However, I do wish that some would have an open enough mind to really look at the various clubs and give one of those trial offers from a reputable DC a try before they pronounce every DC a waste of money run by a bunch of crooks.

DCs have sky high satisfaction rates from an experience standpoint that not even the best travel providers can match.  I've always thought that the DC concept really is ingenious and eliminates the unknowns of whether you'll have a great vacation.  Now if they can just eliminate the financial risk, they'll be set. 

One side comment is that we've got a crazy upside down economy right now with economics that cannot last forever.  People who own these second homes are desperate for any kind of cash, but again that's not always going to be the case.  People tend to compare the present options (particularly from a pricing standpoint) and assume that it will be the case in a few years.


----------



## wilkes591

*How are you guys?*

Tarheal,

You are right about UE, it is not going for the middle of the road. Something is up, the secondary did not work and it is delisted currently. I wish I could talk to some of the other UE members, however with DC4M down I can not put the pieces of the puzzle together. We will see what rabbit JT pulls out of the hat in 2010. 

You are 100% right about the DC Vacation Experience, it is excellent. I sure hope the economics turn around for all clubs.

Regards


----------



## TarheelTraveler

It's good to see DC4MS members like Wilkes, travelguy, Kage and others posting over here.  I don't think there's that critical number of posters yet to match the dialogue over at DC4MS, but it is nice to have this fix and help close the DC information gap since DC4MS went down.

Anyone know when the UE Q4 financials come out?  Should be informative.


----------



## AKTHUE

*UE Financials*



TarheelTraveler said:


> Anyone know when the UE Q4 financials come out?  Should be informative.



Shouldn't they be out already? 

The real trick will be to see if it possible to separate out from the resported financials, which use accrual accounting, the effects of the special one-time assessment, the costs and cash of the Secure America merger, and the non-paying members. Remember, they reinstated all the suspended members, and then invoiced them for dues. Once they invoiced them, they may be counting it as revenue even if the suspended members have no intention of being active dues-paying members. They may not need to disclose this until their Q1 financials, but if there is a bump in accounts receivable it may be possible to make some estimates. UE's financials are confusing enough and have enough one-time events to make analysis difficult.


----------



## UnhappyInCT

I think as a small company they have 90 days after year end to submit their 10K


----------



## wilkes591

*The Cash Flow Statement will say it all!*

I would not concern myself with Income Statement. I want to see the Cash on hand and the cash burn. I think JT thought the economy would turn around by now and might have placed some bets to that effect.  It looks to me like UE is looking for cash again and with the secondary failing there is only one place to go.


----------



## TarheelTraveler

wilkes591 said:


> You are 100% right about the DC Vacation Experience, it is excellent.



Interesting article on a survey about timeshares:

http://www.realestatechannel.com/us...hare-survey-redweekcom-randy-conrads-2108.php

Anyone know if those results are typical?

It's interesting to see that DCs have vastly better satisfaction scores.  ER, A&K and other clubs have >90% scores.  However, as I mentioned earlier, the bane of DCs has been on the financial side.  We've still got a few landmines out there in DC world, but I do think there are now a couple of clubs that are either in good shape or have made tremendous financial strides.

Another area that has seen marked improvement is on Club transparency.  Just two or three years ago, there were probably only one or two clubs that provided audited financials, and now most do.  Of course, now it's clear why those clubs weren't providing financials.  Exclusive Resorts was one of the last holdouts, but I'm pretty sure they've caved on that now and will provide financials.


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## Kagehitokiri2

the problem(s) are exchanges, and for most ski fractionals the amount of ski usage.

for higher end fractionals that dont advertise exchange options, and ski fractionals that allow unlimited space available use, the satisfaction levels are probably higher.

higher end will also generally have higher satisfaction.

and with (most?) DCs you can resign.


----------



## TarheelTraveler

A lot of it is availability.  Seems like I remember seeing a fractional study, and the satisfaction rates were higher than timeshares, but lower than DCs.  But I think certain higher end fractionals have had higher levels of satisfaction than the average fractional.


----------



## SciFrog

H A P P Y

Just back from Vail, amazing home, to extend our stay we had to pay almost $3k a night to a nice but nowhere near the quality of the house, although better location with small kids...

Anyone with good insight on very high end timeshares/fractional in Vail, please raise your hand! We love Vail!

DCF has been down for too long, this is strange at best...


----------



## Kagehitokiri2

moving from Q property to rental?

http://quintess.com/vail 4K and 6K ft2 4BR. what development is that? love the design. 

four seasons vail opens this summer, unfortunately fractionals arent amazing like top residence 
(only montage deer valley's top residence compares, along with top suite @ les airelles in courchevel) (ski hotel units)

http://www.solarisvail.com/ looks amazing, but not sure epiphany is still doing 19 fractionals... and again, they werent going to be the top units. epiphany's site is down. (http://villasattristant.com/ was epiphany's first fractional, in telluride)

btw - what is avail looking like for raffles canouan and la samanna?


----------



## SciFrog

Stayed in the big house in Vail, amazing, right on the creek, close to the slopes but not real ski In/out. They are on forest rd, just two adjacent homes. 

Going to Canouan next month, la Samanna is booked solid even next year. 

I will have to rethink my whole holiday scheme when my kids will be in higher grades. If we decide to go to Vail every year during a holiday period, no DC or rentals/VRBO will help us. We stayed in a 4br at the Arrabelle, we were shocked how cheap some details were for a place on sale for a cool $5.8mio...


----------



## Kagehitokiri2

maybe put in a "request" to a custom fractional company for a holiday week plus, in a really expensive property?

did you check what arabelle/rockresorts was charging for game creek chalet?


----------



## 3DH

TarheelTraveler said:


> It's good to see DC4MS members like Wilkes, travelguy, Kage and others posting over here.  I don't think there's that critical number of posters yet to match the dialogue over at DC4MS, but it is nice to have this fix and help close the DC information gap since DC4MS went down.



...agreed! Count me in on the posters/lurkers here!


----------



## SciFrog

Game Creek is too far with small kids...
Arrabelle, 4 Seasons, Solaris are close. Ritz is too far, Lodge at Vail needs a total overall.

One strange thing about Vail, kids ski school is only in Lionshead and Golden Peak, not in the village...


----------



## Kagehitokiri2

http://www.thehideawaysclub.com/


> International Destination Club of the Year 2009
> - Destination Club News News



http://destinationclubnews.com/News_The_Hideaways_Club_Confirms_Price_Increase.php


> The Hideaways Club now has over 130 Members


----------



## ClubsRDead

It's uncanny how many of the DC4MS folks moved over here.  As with the prior forum, nothing gets nor can be resolved here.

Does anyone still really believe this is a viable product, in a viable economy?  Let's face the realities:

ER - has reportedly somewhere between 5-800 members on the resignation list.  No surprise.  Case pumps $30MM into a billion dollar hole, what does that solve?  The OpCo lost over $200MM last year, and they've set their pricing now to where there is NO reason whatsoever to join.  With dues giving an ADR of approx $1000/day, why would anyone pay a deposit (that they would lose 25% of, assuming one could actually be redeemed if they wanted out) when you can rent almost anywhere for $1k / night?

UR - a comment on here states that the AK lawsuit is the black eye of the industry.  True, and false.  That suit (which is a bunch of individual one's now, it is no longer a "Class" action - will be the show stopper, but even moreso when JT and Co file.  How is he still alive?  He's failed in private and  public offerings.  He promised redemptions to TH members he can't honor, and let's face it, the homes are mostly crap.  The worst homes at TH became Jim's best, but with 3x the debt load.  All the offices he maintains, why?  They are (like everyone) selling nothing.

AK - Equity Club?  You think?  Well Intrawest was carrying all their debt and now they're in a restructuring, and close to a possible filing.  AK has no assets to speak of, and their burn rate is incredibly high, in addition to not selling any memberships.  So between the lawsuit and Intrawest's overlapping financial and legal issues, there is NO WAY that AK can grow the club, much less stay open.

Quintess, and others -- who cares.

All the dinky clubs with 5-20 homes and 150 or so claimed members are close to expiration.

So call it what it is folks - DEAD.  No one in their right mind would write a check today to join ANY club.


----------



## Kagehitokiri2

Kagehitokiri2 said:


> luxus vacation properties = only owned homes with no debt and point system
> it is literally not possible to be any more conservative.
> 
> and again the whole point of DCs is that they are exchange-free.





ClubsRDead said:


> why would anyone pay a deposit...when you can rent almost anywhere for $1k / night?


i gave examples of massive discounts via Q and BT private collection. ER also has some large discounts at a number of hotels. whether they are of interest is a matter of personal preference, but to deny they exist is ridiculous.

OTOH theoretically it is possible to rent under the table from members of clubs where anyone can use. (including ER ultra members) with Q, they charge a $25K fee to add nonfamily members to your usage list of up to 8 people, not including spouse/partner.


ClubsRDead said:


> Well Intrawest was carrying all their debt and now they're in a restructuring, and close to a possible filing.  AK has no assets


first, absolutely no idea what you mean re AK having no assets. AKRC? AK? owned properties? who cares? 

and youre kidding re AK and intrawest right? AK *was* the best thing in intrawest's portfolio. intrawest *had* nothing to do with management, and i doubt they *had* anything to do with operating expenses. but that is all moot, because when fortress bought intrawest they moved AK out of intrawest's portfolio, and into their own portfolio. so now you want to talk about fortress having problems? great. still doesnt matter, because again AK is a great part of their portfolio, and fortress simply wants to make money off them - they dont want to manage, and yet again i doubt they have anything to do with operating expenses. (not the same as capital investment.)

who disagrees about bad business practices? no one. i think a lot of people are moving towards the "who cares what happens" (if theyre not already there) even if they belong to the club in question. lawsuits are happening, more will happen, will anyone besides lawyers continue to succeed? who knows. (obviously the people filing care at least a little bit.)

the industry is clearly messed up, but hey, at least its because they charged too little. (vs timeshares) i personally define "destination club" as "exchange free" so that model is not going anywhere. who knows if we will ever see more DCs with reasonable business practices. who cares? would be nice, but so would a lot of other things. 

and just to clarify, while cynical i still say keep hope alive, and i obviously wish the best to people who are currently members, or those in the midst of lawsuits to recover deposits/etc. i care about their losses, even if theyve done a lot of DC travel, although that certainly helps.



ClubsRDead said:


> No one in their right mind would write a check today to join ANY club.


if true, that would mean timeshares wouldnt exist. and a lot of other things. (im going along with you here, ignoring any established value.)

also re ER >

at sea island and ritz carlton grand cayman, ER owns hotel-managed 4BR pool villas. the hotels have no pool villas in inventory. nor do there exist hotel-managed pool villa residences. (if there were, you might be able to rent privately, depending on minimum lease.)

at ritz carlton ft lauderdale, ER owns all 8 3BR condohotel units. (XX02, XX03, XX08, XX09 on 15th/16th floors) 1603 is the best condohotel unit (in the building) with a very large terrace. the condo residences have a 1 year minimum lease.

at trump chicago, ER owns 7 out of 10 xx00 units (floors 18>27) (the larger/nicer of the 2 2BR floorplans, which can connect to a 3rd BR [xx04].) (the other 2BR floorplan is laid out like its a 1BR + studio, even though it isnt, and doesnt connect to a 3rd BR.) ill have to check residence min lease sometime.

they also own 4 2BRs on the world. the world requires 6 nt min for bookings. ER doesnt. and ive only seen 1 private rental. (OTOH while cheaper, ER and the private rental are not all-inclusive.)

re ER once in a lifetime - the seabourn charters would be great for a demographic change to one unlike any luxury all-inclusive cruiseline, and at one point they offered top hotel(s) on st barts. IF they were available over NYE, that is something that is not normally bookable - they are sold out to regular guests more than a year in advance.


----------



## TarheelTraveler

ClubsRDead said:


> It's uncanny how many of the DC4MS folks moved over here.  As with the prior forum, nothing gets nor can be resolved here.
> 
> Does anyone still really believe this is a viable product, in a viable economy?  Let's face the realities:
> 
> ER - has reportedly somewhere between 5-800 members on the resignation list.  No surprise.  Case pumps $30MM into a billion dollar hole, what does that solve?  The OpCo lost over $200MM last year, and they've set their pricing now to where there is NO reason whatsoever to join.  With dues giving an ADR of approx $1000/day, why would anyone pay a deposit (that they would lose 25% of, assuming one could actually be redeemed if they wanted out) when you can rent almost anywhere for $1k / night?
> 
> UR - a comment on here states that the AK lawsuit is the black eye of the industry.  True, and false.  That suit (which is a bunch of individual one's now, it is no longer a "Class" action - will be the show stopper, but even moreso when JT and Co file.  How is he still alive?  He's failed in private and  public offerings.  He promised redemptions to TH members he can't honor, and let's face it, the homes are mostly crap.  The worst homes at TH became Jim's best, but with 3x the debt load.  All the offices he maintains, why?  They are (like everyone) selling nothing.
> 
> AK - Equity Club?  You think?  Well Intrawest was carrying all their debt and now they're in a restructuring, and close to a possible filing.  AK has no assets to speak of, and their burn rate is incredibly high, in addition to not selling any memberships.  So between the lawsuit and Intrawest's overlapping financial and legal issues, there is NO WAY that AK can grow the club, much less stay open.
> 
> Quintess, and others -- who cares.
> 
> All the dinky clubs with 5-20 homes and 150 or so claimed members are close to expiration.
> 
> So call it what it is folks - DEAD.  No one in their right mind would write a check today to join ANY club.



Seems like you've got an axe to grind.  Are you a former employee of a DC or former member of a defunct club?  Kage at least has his facts straight, and he's not a member of a DC so he's a heck of a lot more impartial than most that post on here.

A couple of additional thoughts.  ER had 379 members on the resignation list per the ER year in review (not 500-800).  http://www.exclusiveresorts.com/images/BR-YIR2009-PROSP.pdf Page 21.

The T&H A&K lawsuit did get dismissed on summary judgment in Illinois, but is on appeal.  Definitely much tougher road for the plaintiffs from here on out.  I could be wrong but I believe another licensor of their name, Andrew Harper, was also dismissed from the lawsuit.  The similar California lawsuit is still ongoing.  Seems like you'd have the same result as in Illinois, but it's California so who knows.  I've read the court filings, and I feel bad for both A&K and the plaintiffs.

The A&K comments have me particularly baffled.  "Equity club?"  Well, yes.  The members own 11 or so properties completely debt free in their corporation (A&K does not own these houses).  How is that not an equity club?

As Kage points out, there is *no connection *between Intrawest and A&K, other than historical (Intrawest originally bought A&K) and Fortress funds now own Intrawest and part of A&K (along with the Kent family).  They are not intertwined in the least.  Also, as Kage mentions, A&K is actually one of their better performing assets in one of their funds.  A&K is profitable and the RC is close to break even, not bad for the worst economic period in decades.

On the sales front, over the last year, A&K RC sold 60-70 of the week trials, two year trials and equity memberships (mind you last year was definitely very heavy on the week trials, as nothing was selling last year (particularly in the discretionary travel category)).  2010 has actually started out well, with a nice increase (on a member equivalent basis, I bet they've sold as much so far this year as all of last year), so I don't think it's fair to say no one is selling anything.  EE is also selling well, along with the Hideaways Club, so it seems like the equity clubs are growing nicely.  Not sure about Quintess and ER (other than their good December which is mentioned in the Year in Review).

Extreme comments drive me nuts, because they so rarely reflect the reality.  Timeshares had an awful last year, so they must be dead.  Country clubs are going bankrupt and having to be restructured, so I pronounce them dead.  The financial system was on the brink of collapse at the end of 2008, with Lehman and Bear going down, so I pronounce investment banks dead.

I'm not all rosy on the DC industry, as I think we've got some more bad news coming, but at the same time, there will be survivors as DCs do solve some of the issues that timeshares and fractionals have had.


----------



## ClubsRDead

*So....*

...when AK wrote the checks to take over Crescendo and Belle Havens, where did those funds come from?  They say "equity model," and "no debt," but someone wrote a check and is carrying that on their balance sheet?  Who?

You actually believe if there's a filing with Intrawest that there would be no actual affect on AK?  And if there was, that somehow these homes / assets would be magically protected?  Ask some TH members how that worked for them.  It's easy to appreciate someone being a current club member and defending their club, but stating sales numbers that are in no way supported in the financials is uncanny.  Not to mention that the #'s you post about new sales were not echoed in their member communications or conference calls.

And lets not forget that no one has any comment to say regarding JT and his UE circus.  What is he going to do for cash in this economy, with that model?  Who can answer that?

And ER - their # of waiting to redeem is much higher.  Watch Case's interview on CNBC and his commentary since.  What lifeline does $30MM provide?

So defend, defend, defend - and "feel sorry for" those that were with TH and "lost money."  Why?  Just because you were with one club that others would consider "defunct," ie Cresendo and BH were before AK saved those members, doesn't mean they're making frugal decisions now.

Deep pockets and consolidation seems to be the only way out for most.  And that could mean trimming services and raising dues, especially when no new sales are lining up.

Anyone who thinks selling trial memberships is the answer doesn't understand math.  As a member, if you are one and actually paid, you should be pissed that people can pay a fraction of cost and get the same booking rights as you.  You're probably more pissed you actually wrote a check of a much larger amount and the cheaper option wasn't available then.  Especially from the AK side, who lowers prices so if you want out now, you take a hit.

So keep talking it all up as rosy and see where that gets you.  This industry needs regulation.  JT isn't doing much different than Bernie Madoff...


----------



## travelguy

Props to ClubsRDead for giving bullet points and specifics for his/her viewpoint.  This is MUCH better than the rhetorical non-sensical anti-DC rants that usually pop up when DCs are discussed.

Other than that, Kage and TT have pretty much covered the corrected facts and a knowledgeable response.

It's important to note that most of us who are interested in the DC concept typically LOVE the travel but are UNSURE about the future of the DC business model.  Various levels of optimism and pessimism mixed in with semi-transparent DC facts make for any interesting forum read!

BTW - No one is going to defend JT and his UE circus.  Although he does get points for creativity in stalling the inevitable!


----------



## Kagehitokiri2

Kagehitokiri2 said:


> http://www.exclusiveresorts.com/#2009_YIR
> http://www.exclusiveresorts.com/images/BR-YIR2009-PROSP.pdf
> 3259 members
> 379 resignation list (could be worse...)
> $360MM "bank" debt (is this worded to exclude private equity?)



intrawest bought a 67% stake in A&K in july 2004, with option to buy other 33%. i dont think they ever exercised that option. again fortress moved it from intrawest's portfolio into their own portfolio when they acquired intrawest. this has absolutely nothing to do with anything, but >
http://news.google.com/news/search?um=1&cf=all&ned=us&hl=en&q=fortress+intrawest&cf=all&scoring=n

im "impartial" because i feel extremely strongly about trying to be that way. i wouldnt act differently if i was a member of a club, or a club employee. i would just have more information. (assuming no NDA etc)

regulation - i guess only obama can save us from the evil corporations?

i have said before that it would be nice if clubs got busy dying/merging/etc. (acting reasonably/seriously) but im not going to say that industry health is worth members losing money faster. mainly because there is no health.

certainly UE is going to be coming to a head again sometime soon. will be interesting to see what happens.


----------



## fooled once

*new post-er*

Can anyone enlighten me about  Equity Escapes? thankyou


----------



## Kagehitokiri2

the one unanswered question i have regarding EE is what is contractually linked to debt payments. they have caps of 23%/30%, one being total and one being real estate, dont remember which is which offhand.

this is compared to > AK has 5% cap. luxus does not do debt. m private residences is low, but their actual cap is similar to EE. 

pretty sure rocksure has no debt in their first 2 small funds, but not sure about their 3rd larger fund. not sure what hideaways is like.

*fooled once*, were/are you a member of another club? were you on DC4MS?


----------



## TarheelTraveler

travelguy said:


> Props to ClubsRDead for giving bullet points and specifics for his/her viewpoint.  This is MUCH better than the rhetorical non-sensical anti-DC rants that usually pop up when DCs are discussed.
> 
> Other than that, Kage and TT have pretty much covered the corrected facts and a knowledgeable response.
> 
> It's important to note that most of us who are interested in the DC concept typically LOVE the travel but are UNSURE about the future of the DC business model.  Various levels of optimism and pessimism mixed in with semi-transparent DC facts make for any interesting forum read!



Got to agree, travelguy.

In response, the Intrawest argument is a total red herring that some salespeople in the industry have used to sell against A&K (I actually heard that straight from the horse's mouth once) when it has zero basis in reality.  If Intrawest goes bust, the Fortress private equity fund loses all or most of the company just like a mutual fund that has invested in a company that has gone bust.  As a practical matter, from what I've read, Fortress has already written down most of that investment to pennies on the dollar.  Of course, this has nothing to do with A&K or the A&K RC.  *There is no ownership crossover*. 

However, for argument sake (even though A&K is doing well) and just to respond to the next potential argument, let's say something happens to A&K.   A&K owns the A&K management company, but *does not* own the houses owned by the corporation owned solely by the members.  Therefore, even if A&K went bankrupt, they have a zero ownership stake in those houses.  It's like saying if I own a vacation house and the rental manager goes bankrupt, I'm going to lose my house.  The downside to this scenario would be that the members would have to find a new manager, which I think would be relatively easy to do, but more importantly, they'd lose access to the houses that they haven't bought which A&K is letting the members use and you'd lose a strong backer and marketer, but again the houses bought by the members would not be tied up or lost as you note.  This is so different than the non-equity scenario like T&H where the members owned nothing other than the right to use the properties owned by someone else.

On another point, sure, A&K put up money to buy BH and CR, and I have no idea whether A&K incurred debt to do so, but again that has nothing to do with the member's corporation that bought the houses.  The CR members actually put up money in the deal to go debt free on those houses.  The equity that was in the houses were transferred.  I'm sure A&K had to put capital to essentially buy the management companies, and I'm sure that long term they want a return on that invesment with commissions from selling memberships, just like Ritz-Carlton wants a return on their DC invesment, but if they don't get enough return, you go back to the scenario above, which is not that bad of a doomsday scenario in my book.

I've seen the sales numbers in member updates and I've heard the YTD numbers.  They are what they are.  We'll get them in the financials next month.  Last year was very heavy on the short trial memberships, which are better than nothing (as at least you've got people trying the product and hopefully buying the product eventually), but certainly not ideal.  This year it's been either equity memberships or two-year trials, and they're on a good pace.  So is Hideaways and EE.  Again not sure about the rest.

As a member, I've got no real complaints about the pricing if I really step away and look at the big picture.  Sure the new folks are paying less than me, but so are my new neighbors who just bought a house down the street.  It's reality.

Where I'm going to agree with CRD is the need for regulation.  I personally think that like the timeshare industry, there have been many crooks in the DC industry.  Most of which are out of business.  I personally think it ought to be criminal to take in money as deposits, promise perpetual vacations, not use the bulk of it to buy real estate, and instead blow it on operational expenses, with the hope that you have new members coming in later.  There are still a few DCs out there that to my knowledge have no guidelines as to what is done with deposits.  It wouldn't fly in the more regulated world of timeshares, and it shouldn't fly with DCs IMHO.

This forum is definitely a hodge podge of opinions depending on your personal experience with DCs.  I've got no complaints so I'm more optimistic, but I can also understand the complaints of those who have been burned.


----------



## wilkes591

*I will give JT points.*



travelguy said:


> BTW - No one is going to defend JT and his UE circus.  Although he does get points for creativity in stalling the inevitable!



JT did not put T&H in Bankruptcy while the economy was booming. The T&H member's are not due anything yet, like someone else is claiming. 

PE was going under, and some how UE came out of that debacle and went "public". 

UE's is getting new members writing checks for full deposits.

The rabbit was pulled out of the hat this week, many current member's paid an additional year of annual dues for additional advance reservation days. Looks like the club will raise 10 to 15 million by 03/31/10 on a voluntary basis from willing members. I was not one. 

I also hear CapSource will be MODIFING the lending facility for a one time payment on 04/01/2010. The modification has very favorable terms, including an equity position for CapSource in UE.

Say what you want about JT, but somehow he finds a way to keep UE afloat and I can continue to travel and enjoy my PE deposit that I will never see.


----------



## SciFrog

JT keeps UE afloat, which is amazing considering how bad their stock is doing... Getting people to put up more money? They are insane. It is one thing to keep paying dues to travel. But more money?

And more advance reservation with the current home portfolio? Good Bye availability...


----------



## Kagehitokiri2

wilkes591 said:


> many current member's paid an additional year of annual dues for additional advance reservation days. Looks like the club will raise 10 to 15 million by 03/31/10 on a voluntary basis from willing members. I was not one.



jesus christ. i hope they get a lot of good use in now.


TarheelTraveler said:


> The CR members actually put up money in the deal to go debt free on those houses.


as you were a crescendo member, nice job.  

in all seriousness re regulation, would be nice to see current laws enforced, and in general an improvement in rule of law. ("common sense"??)


----------



## TarheelTraveler

wilkes591 said:


> JT did not put T&H in Bankruptcy while the economy was booming. The T&H member's are not due anything yet, like someone else is claiming.
> 
> PE was going under, and some how UE came out of that debacle and went "public".
> 
> UE's is getting new members writing checks for full deposits.
> 
> The rabbit was pulled out of the hat this week, many current member's paid an additional year of annual dues for additional advance reservation days. Looks like the club will raise 10 to 15 million by 03/31/10 on a voluntary basis from willing members. I was not one.
> 
> I also hear CapSource will be MODIFING the lending facility for a one time payment on 04/01/2010. The modification has very favorable terms, including an equity position for CapSource in UE.
> 
> Say what you want about JT, but somehow he finds a way to keep UE afloat and I can continue to travel and enjoy my PE deposit that I will never see.



Thanks for sharing, Wilkes.  Also got to give JT credit for the creativity.

Just for clarification, are members essentially prepaying for two years of dues?  If so, what happens a year or two out when you miss those payments.  Make the same offer, I guess?

On the modification, I assume you mean favorable terms for UE, right? Or do you mean CapSource, because they get an equity stake

Thanks again for sharing.  UE is always an interesting one to watch.


----------



## ClubsRDead

*Oh Please....*

He's convinced members to pay more in advance and is going to have $10-15MM by month end?  That is the BIGGEST load of BS I have ever heard.  Who tells people this information.  It's certainly not on the member web, nor was their any offering of the type.

And now Cap Source, a public REIT, so one that has little discretion in how they operate, is modifying secured loan terms for UE, taking an equity position (bigger than they already had) - and that too is not publicized?  Once your company went "public," anything like that - especially change in any shares or controlling interests, or modifications to credit facilities, has to be voted upon and published.

Maybe if people just say "I think I can, I think I can, I think I can" over and over, it will happen...


----------



## Kagehitokiri2

yes, only you know anything. thanks for clearing everything up.

i just went through capsource 2009 by Q and 2008 annual. and i think full year 2009 prelim earnings. guess what? no mention of destination clubs.

*wilkes591* said he didnt pay, yet you accuse him of making stuff up to say UE is great? which he never said to begin with. not to mention >


wilkes591 said:


> *Looks like* the club will raise 10 to 15 million by *03/31/10*
> 
> I also hear CapSource *will be *MODIFING the lending facility for a one time payment on *04/01/2010*. The modification has very favorable terms, including an equity position for CapSource in UE.


----------



## ClubsRDead

Aren't you defensive?  No one, especially me, said anything about "Wilkes."  He flat out said he was an original PE Member (so if he has issue, it should be with Keith, not JT -- because that model Keith cloned from McGrath was broken to begin with).

You are correct in re-stating what I questioned, JT and co. raising $10-15M from members by month end.  Seems unrealistic.  And for the most part unannounced.  So, versus questioning "Wilkes," I question who is feeding this BS to these members.

Not sure what your point was about reading Cap Source financial data and it containing nothing about DC's.  No shit.  But presumably you know they are the primary lender for more than one DC.  Their income, if any stated, is in the form of interest, not fees or dividends, and certainly not in profit-share from equity in any.  So, I suspect this may be nothing more than a line of BS, also perpetuated by JT, or RK, not "Wilkes."  Hey, maybe JT was given a deferral on a payment or something due April 1, which should save him roughly $800k+ for a month -- a pretty big deal if you're not making any money.

Accept the reality - it appears that others have.  Although how anyone in AK (sorry TT) can think they are immune to financial collapse just because they call it an "equity" club is beyond me.  Saying AK is the only thing that made money for Intrawest is strange.  Intrawest's resort holdings made plenty of money, most still do.  Their OpCo costs got too high, and more importantly their debt payments out of hand considering the decline in real estate values.  AK globally claims they make $500MM / year, more likely $250MM total revenue, and the RC itself loses $4MM roughly.  Overall, sure - someone could come in and privately manage the homes for the Members, if they could ever get control of them - but at what cost?  The dues AK charges are about the lowest in the industry and they can't make it profitable.  How would an unorganized group, and how many would throw cash at the problem?


----------



## Kagehitokiri2

who cares?



ClubsRDead said:


> That is the BIGGEST load of BS I have ever heard.  Who tells people this information.  It's certainly not on the member web, nor was their any offering of the type.
> 
> Cap Source...little discretion in how they operate, is modifying secured loan terms for UE, taking an equity position...has to be voted upon and published.



sounded to me like you were calling *wilkes591* a liar. 

if you have access to member site i presume you are a member.

youre saying he was lied to? wouldnt it be kind of silly for UE to bother making up lies that specific?

or was your point that its a member thats defending UE thats making this up?



ClubsRDead said:


> The dues AK charges are about the lowest in the industry



solstice was $2K/nt but theyre gone. that leaves 2 price levels. ~$1K/nt (most incl AK) and ~$500/nt (hideaways and EE for example) luxus is very little, but thats because its $1MM with no debt, and realistic deposits. also no extras.

when you compare the breakdowns for AK and EE, its nowhere near that large of a difference. EE is adding a management fee when they are full, and AK dues include reserve.

actually that was an interesting thing i did on DC4MS that ended up being deleted.

looking at EE when they add mgmt fee, and if they had maximum debt. >


> i think my calculation was something like 7.5% over 10 years, and i got ~$10K per member per year
> 
> thats in addition to mgmt fee of ~$3K per member per year
> 
> mgmt fee is ~20% increase, and combined they would be almost 100% increase


(i used 7.5% and 10 years for debt, semi-randomly. but this gives a general idea.)

also interesting, not sure i posted yet.
http://www.exclusiveresorts.com/images/BR-YIR2008-01.pdf
(i posted 2009 earlier)


> "As of December 31, 2008...secured debt...was approximately $350 million"
> 
> "As of December 31, 2009 our $360 million of bank debt"
> 
> ("secured" > "bank")



others...

http://destinationclubnews.com/News_Ken_MacLean_On_Being_An_M_Private_Residences_Member.php


> the club's annual dues paid by members cover all of the club's operations. "Let’s be very clear," Poscente told us last year when the pair departed. "At M, every dollar is covered by the operating costs. Every light switch, every cup of coffee, all the debt, all the salaries, all the sales, sales incentives, referral programs, every freaking dollar is in the annual dues."



http://quintess.com/news/q1_2010/1


> Quintess, LRW provides our Members access to our unaudited quarterly financials and our audited annual financials. Between Member dues, occupancy fees and the *contracted Series C Investors commitment*, we remain stable and sustainable without new sales activity



seem to recall ER claiming the raised dues cover costs, but was that after case put in $20MM? dont recall where they talked about this. probably something in 2009..

thought this was interesting, also in 2009 >


> Members desiring more details on club financial operations shouldrefer to the “letters from the club” section of our er compass website.


so thats a positive change if theyre sharing information with members now.


----------



## TarheelTraveler

ClubsRDead said:


> Accept the reality - it appears that others have.  Although how anyone in AK (sorry TT) can think they are immune to financial collapse just because they call it an "equity" club is beyond me.  Saying AK is the only thing that made money for Intrawest is strange.  Intrawest's resort holdings made plenty of money, most still do.  Their OpCo costs got too high, and more importantly their debt payments out of hand considering the decline in real estate values.  AK globally claims they make $500MM / year, more likely $250MM total revenue, and the RC itself loses $4MM roughly.  Overall, sure - someone could come in and privately manage the homes for the Members, if they could ever get control of them - but at what cost?  The dues AK charges are about the lowest in the industry and they can't make it profitable.  How would an unorganized group, and how many would throw cash at the problem?



I'm not going to pretend that I know everything about every club, but I can tell you about the A&K RC, and I know a good amount about A&K.  The A&K numbers are actually much better than you cite.  Furthermore, if there is no club manager, the members pick a new club manager.  There is no getting control of the houses.  The members would have to enter into a new management contract with someone else or affirmatively decide to dissolve.  *Period.*  Read the operative documents.  Additionally, A&K dues are not about the lowest in the industry, and they should be break even this year, as they have cut costs to do so.

Nonetheless, I can come up with some doomsday or negative scenario about every investment/purchase, so I don't think that anyone can say that a particular choice is immune from financial collapse, including any timeshare, fractional, vacation house, primary residence, whatever. The point is that certain vacation models are clearly less risky than others, just like CDs are less risky than private equity.

Agree on Intrawest that the potential to make money was there, particularly in the real estate hay day, but the debt from the leveraged buyout seems to be killing them, particularly when travel bookings and real estate collapsed at the same time.

CSD - So are or were you a DC member?  Or did you work for a DC?


----------



## wilkes591

You are correct in re-stating what I questioned, JT and co. raising $10-15M from members by month end.  Seems unrealistic.  And for the most part unannounced.  So, versus questioning "Wilkes," I question who is feeding this BS to these members.


It is called Annual Dues Rebalancing Program, If you are a member in good standing you got the 1st e-mail and the 2nd announcing quick success of the program. I doubt UE can make financial claims that are as unture as you state, since they are public. The amounts are my "guess" based on what I would think average dues are and that it would be mostly non PE members since we have unlimited yearly use. I would say on the very low side it might be 6 million to the high of 15 million. I would bet the target is 10 million. 

I am not posting the member e-mail, if someone else wants to go right ahead.

The CapSource information was from another UE member with many years of correct posting on prior DC4M broad.

I am stating what the club is saying it is doing, if you choose not to believe them that is fine with me. The reality to me is I still travel and enjoy the DC travel experience. Some people like the product and hate the financial side, I always looked at the deposit as part of the expense and I go by cost per night including the deposit, annual dues and nightly fees. If UE makes it another two more years, I will be very happy with my return on investment over a six year period. I average 50 days a year the last four years. 

I am not saying join UE today, I am just saying with the current economic conditions and what I have been through with PE/UE. I am shocked how strong the active member base supports the club. I think some posters do not realize that most current UE member's are in it for the "Long Haul" since they already have our money. Having 1300 paying members can carry the club for some time.


----------



## wilkes591

"You are correct in re-stating what I questioned, JT and co. raising $10-15M from members by month end.  Seems unrealistic.  And for the most part unannounced.  So, versus questioning "Wilkes," I question who is feeding this BS to these members."


It is called Annual Dues Rebalancing Program, If you are a member in good standing you got the 1st e-mail and the 2nd announcing quick success of the program. I doubt UE can make financial claims that are as unture as you state, since they are public. The amounts are my "guess" based on what I would think average dues are and that it would be mostly non PE members since we have unlimited yearly use. I would say on the very low side it might be 6 million to the high of 15 million. I would bet the target is 10 million. 

I am not posting the member e-mail, if someone else wants to go right ahead.

The CapSource information was from another UE member with many years of correct posting on prior DC4M broad.

I am stating what the club is saying it is doing, if you choose not to believe them that is fine with me. The reality to me is I still travel and enjoy the DC travel experience. Some people like the product and hate the financial side, I always looked at the deposit as part of the expense and I go by cost per night including the deposit, annual dues and nightly fees. If UE makes it another two more years, I will be very happy with my return on investment over a six year period. I average 50 days a year the last four years. 

I am not saying join UE today, I am just saying with the current economic conditions and what I have been through with PE/UE. I am shocked how strong the active member base supports the club. I think some posters do not realize that most current UE member's are in it for the "Long Haul" since they already have our money. Having 1300 paying members can carry the club for some time.


----------



## Kagehitokiri2

wilkes591 said:


> It is called Annual Dues Rebalancing Program, *If you are a member in good standing* you got the 1st e-mail and the 2nd announcing quick success of the program.
> 
> The CapSource information was from another UE member with many years of correct posting on prior DC4M broad.
> 
> If UE makes it another two more years, I will be very happy with my return on investment over a six year period. I average 50 days a year the last four years.
> 
> I am shocked how strong the active member base supports the club. I think some posters do not realize that most current UE member's are in it for the "Long Haul" since they already have our money. Having 1300 paying members can carry the club for some time.





TarheelTraveler said:


> CSD - So are or were you a DC member?  Or did you work for a DC?





ClubsRDead said:


> It's certainly not on the member web


if they have access to UE member site, theyre UE member?


----------



## AKTHUE

*UE Rabbits*



wilkes591 said:


> UE's is getting new members writing checks for full deposits.
> 
> The rabbit was pulled out of the hat this week, many current member's paid an additional year of annual dues for additional advance reservation days. Looks like the club will raise 10 to 15 million by 03/31/10 on a voluntary basis from willing members. I was not one.
> 
> I also hear CapSource will be MODIFING the lending facility for a one time payment on 04/01/2010. The modification has very favorable terms, including an equity position for CapSource in UE.
> 
> Say what you want about JT, but somehow he finds a way to keep UE afloat and I can continue to travel and enjoy my PE deposit that I will never see.



I find it unbelievable that UE is signing up any significant number of new members. UE has all kinds of trial memberships right now that let you travel just for the cost of dues, without any deposit. They probably announce those as new members, just like they counted all the suspended members, and temporarily re-instated them and invoiced them just when they were filing their public financials.

Further, I find it impossible that UE has raised $10-15 million from voluntary early dues payments. The entire assessment, which was equal to an extra year of dues, didn't raise $15 million. There is no way the active membership base all prepaid dues - and even if they did, at some point the piper will have to be paid. 

Was it UE that threatened to sue DC4Ms to shut them down in order to prevent open discussion among members? Has UE convinced enough gullible members to put up even more money to keep UE alive for another six months? These members love their vacation experience and want to believe that by giving JT a little more money, this uneconomic model can survive. Yes, JT has kept pulling rabbits out of the hat, but having blind faith that he can continue is like investing with Bernie Madoff. UE is built like a house of cards - there are too many gimmicks, there is too much debt, the expenses are too high.

The kind of lender that Capital Source is, they probably got a clear picture that UE could not make a contractual payment, and agreed to modifications in return for additional fees and warrants. They surely didn't give UE a gift. Maybe UE got another 90 days of life before the next potential default. 

It is a question of when, not if, UE goes under


----------



## AKTHUE

*UE Public Information*



wilkes591 said:


> It is called Annual Dues Rebalancing Program, If you are a member in good standing you got the 1st e-mail and the 2nd announcing quick success of the program. I doubt UE can make financial claims that are as unture as you state, since they are public.
> 
> I am not posting the member e-mail, if someone else wants to go right ahead.
> 
> The reality to me is I still travel and enjoy the DC travel experience. Some people like the product and hate the financial side, I always looked at the deposit as part of the expense and I go by cost per night including the deposit, annual dues and nightly fees. If UE makes it another two more years, I will be very happy with my return on investment over a six year period. I average 50 days a year the last four years.
> 
> I am shocked how strong the active member base supports the club. I think some posters do not realize that most current UE member's are in it for the "Long Haul" since they already have our money. Having 1300 paying members can carry the club for some time.



Wilkes, it sounds like you a realistic view of your UE/PE experience, and what the prospects are. You will enjoy it as long as you can and you don't expect it can continue.

When you say that you "doubt UE can make financial claims that are untrue, since they are public, " I would caution you on a couple of points. Every member has to sign a confidentiality agreement or non-disclosure agreement. My understanding is that the financial regulations would cover what UE says publicly, but would not cover confidential, private communications with members. Remember that these member communications are about paying dues, and not about buying securities. The financial regulations would apply to UE's public statements that are targeted at investors. I think UE fully complies with the truth and  letter of the law in their public financial statements. 

Having said that, I think that their financial statements are not very transparent and are intentionally confusing and can be misleading. And that it is only a matter of time when the picture becomes clearer and bleaker. And either UE files for bankruptcy or is foreclosed by Capital Source. Capital Source  will then have to make a decision whether it is better off selling the properties, which are its primary security, or operating them as a destination club. If the business loses money, they will be better off liquidating the property.

I do think most UE/PE members view their deposits as a sunk cost that they are unlikely to get back, and they like their UE vacation experiences and think the dues represent a good value - so they continue to prop up UE in the hope that it will last another year. At the same time, the business model remains broken and the UE executives pay themselves well. That fat lady hasn't sung yet, but she is warming up.


----------



## ClubsRDead

Ah be careful...people here get very sensitive when anyone implies that their club is not healthy.

For the AK tried and true, I suggest you find out the details, from inception, of the Intrawest purchase of AK.  Find out where the debt was absorbed, how much and by whom.  Tricky maneuvering of stock and ownership rights of AK to Fortress is one thing, but don't fool yourself for 2 seconds thinking that the debt of AK isn't tied up in the Intrawest refinance.  And, should the world go all gloom and doom, and Intrawest file, consider the position you would take if asked to provide interim financing during a workout (debtor in possession) if some of the debt you were considering propping up was related to an off the books entity that really has NO assets.  Be careful now - you want to come back and say "hey, AKRC has assets, our houses are free and clear."  Well, even if I give you that, it's not what I mean.  AK global, short of maybe owning some of these homes (which you members really own) doesn't own anything.  So, if your assets in the RC are really separate, great - but you just gave me even less incentive to do a DIP with you.

Not to mention - the lawsuit from former TH members.  What if some of them win?  What if AK has to start forking over checks for payments?  That has to come from somewhere?  You don't think it would affect the entire AK group of companies, including any services the RC were to receive or have funded?

Let me ask you this - if you own a Toyota right now, and have been thinking about selling it, do you think it's worth as much today as it might have been 2 years ago?

From the UE side, I wholeheartedly disagree that the "members are in it for the long haul because he already has our money."  That's hogwash because a majority of those members came from TH and paid no deposits to UR/UE.  Another big chunk came from PE and they've already been screwed on redemption rights and that cash is long gone.  Not to mention RK has had all sorts of the homes listed on the open retail market.  Then throw in the very small number of new members who may have joined in the last year or two (which isn't many based on their own published numbers), and none paid anywhere close to published membership prices - you have to ask, what cash??  They're (the TH majority members) are in it by default, and presumably until JT can give their contractual redemptions back, which was to start in year 5 and go through 8 on a 50-80% of "then market value" scale.  Don't kid yourself into thinking that if the cash was available (and sales occurring) there wouldn't be a line around the building.  You think ER's redemption list got so big by accident?

No one attacked you Wilkes, nor the credibility of yourself.  Only the data.  And yes I do have access to the UE website because my family is a member and there is nothing about a special dues deal, nor have any emails been received by us / them and we / they have 2 "good standing" memberships.  So it does make your information suspect, but it doesn't mean you weren't given something wrong.  Nor does it preclude that what PE legacy members are getting offer-wise isn't different from UR / TH one's, but nor does it preclude that people working for JT don't get on here under pseudonym's and try to make everyone feel all rosy about the "good things coming."  It's happened before...


----------



## Kagehitokiri2

*AKTHUE*,

good point re capitalsource being able to foreclose on DCs where they are primary lender.

my take on exec comp is this - rewards are fine if deserved, but if theyre so huge that it impacts survival, that becomes counterproductive.

wasnt assessment ~$10MM from UE and ~$5MM from PE?

*ClubsRDead*, 

i dont recall mention of AK debt in intrawest financials at time. ill go back and look at all of them.

you know AK doesnt own any of these? http://www.sanctuaryretreats.com/


----------



## ClubsRDead

I totally agree with your 2nd posting, as well.

And were the real estate market in a better position today, and those assets secured by CapSource actually worth something that exceed the loan - they might be knocking on that door sooner for a 7.  I think everyone has learned and has to wonder now why the TH wasn't handled as a straight liquidation vs a restructuring.  Someone could have then, had they wanted to, bought up the assets and let those members come along who wanted too - not who had too, and at realistic market prices.  Or, just picked them off one by one and sold them out.  It's well proven that the strategy of "this shit will appreciate" didn't work in this model, and more importantly, that the members themselves are worth NOTHING.  The only thing a member provides is cash contributions (not capital one's today, no one is buying from anyone) which merely line the pockets of the overpaid exec's at UE.


----------



## AKTHUE

*Executive Compensation at DCs*



Kagehitokiri2 said:


> my take on exec comp is this - rewards are fine if deserved, but if theyre so huge that it impacts survival, that becomes counterproductive.



There have been academic studies that have shown that in start-up and developmental companies, that investor returns are inversely related to executive compensation. DCs like Private Retreats/Tanner & Haley, High Country Club, and Ultimate Resorts/Escapes are essentially start-up companies run by entrepreneurs who want to become rich and successful. If they take a modest salary, and their big payday comes by creating value in the equity of their company, then everyone's incentives are aligned. 

On the other hand, when they pay themselves salaries of $500,000 per year (Rob McGrath did that at PR/T&H, I think Christian Kirschner's payouts were on that order of magnitude at HCC, and JT and RK paid themselves handsomely at UR/PE/UE.) If you read the UE filing for their failed secondary offering, JT somehow has a $10 million loan to UE (meaning UE owes him this much), and he got a $3 million restricted stock grant, in addition to his salary of over $300,000. This level of greed is associated with unsuccessful companies.

Further, the size and complexity of a destination club business simply doesn't warrant $500,000/year compensation packages for CEOs. They may want to be compensated that highly, but the business is not that complex to justify it, and the members are being taken for a ride when their dues are used to fund excessive compensation.


----------



## Kagehitokiri2

its kind of like the thing creditsuisse is being accused of encouraging/facilitating - withdrawing cash from loans as salary.
except with the DC mgmt, they were withdrawing cash from members payments as salary.

http://media.integratir.com/idr/PressReleases/Q2 MDA-FS F2005 v5.pdf


> $1.2 million of depreciation and amortization at A&K


http://media.integratir.com/idr/PressReleases/Q3 MDA-FS F2005 F1.pdf


> $1.1 million of depreciation and amortization at A&K


http://media.integratir.com/IDR/financials/Intrawest_English_AR2005rev1.pdf


> $257.0 million...Revenue at A&K in 2005 increased more than 30% compared with last year
> $236.6 million...expenses
> A&K...EBITDA...$20.4 million
> 
> A&K’s EBITDA in 2005 was augmented by $6.5 million of licensing fees from an operator of destination clubs, who was given the right to use A&K’s brand name for marketing. The licensing agreement terminated in August 2005. While replacement licensing arrangements may be negotiated in the future, EBITDA of $13.9 million from A&K’s tour business is a more indicative base for projecting EBITDA in the future.
> 
> interest income in 2005, including $1.1 million earned by A&K
> $1.5 million of interest incurred at A&K
> 
> Increases in EBITDA of $4.2 million for A&K


http://media.integratir.com/IDR/financials/2006 Annual Report.pdf


> A&K...revenue increased by $44.4 million
> A&K...added $37.7 million...expenses
> 
> A&K realized $1.5 million of licensing fees in 2006, down from $6.5 million in 2005.
> 
> EBITDA from A&K’s travel tour business increased by $6.7 million (49%)...The increase in travel tour EBITDA was partially offset by a decrease of $5.0 million in EBITDA from A&K licensing fees due to the termination of the licensing agreement.
> 
> $15.2 million cash acquired on the acquisition of 67% of A&K



2005 EBITDA 13.9 (minus .4 net interest) (minus estimated 4.6 depreciation and amortization) (8.9 before taxes)
2006 EBITDA 20.6


----------



## ClubsRDead

Read the fine print, not to mention the numerous, ego-driven and self-gloating articles in the WSJ, Worth magazine, etc - where both Geoff and his son talk about their "never having to work again," how "tough it is to be the son of a multi-millionaire," blah blah.  What you will see is that while there was a transaction of some $120-134MM, depending on which account you want to believe, it was merely a transaction - very little cash traded hands.  Debt was assumed and $10MM was paid to a loan-shark type investor that Geoff was indebdted too and on the verge of losing everything.  The majority was DEBT.  It's on someone's sheet - not to hard to figure out who's.  True, Fortress might be holding the majority bag on the stock that Geoff doesn't own, but the loans are totally wrapped up in the Intrawest (attempted) re-fi.  Combine this with a lawsuit -- you've got an uncomfortable situation.  Not one that necessarily can't be overcome - but certainly no one is going to be buying while it's out there unresolved, or especially when JT fails and the whole thing collapses on both sides...


----------



## Kagehitokiri2

actually, as of 5 years ago, seems like >

intrawest has paid about $10MM to AK
AK has about $35MM in assets and $70MM in debt

http://media.integratir.com/IDR/financials/8192 ITW AR 2004 financials.pdf
http://media.integratir.com/idr/PressReleases/Q3 MDA-FS F2005 F1.pdf
http://media.integratir.com/IDR/financials/Intrawest_English_AR2005rev1.pdf


----------



## ClubsRDead

Well there you go, close enough for government work, certainly closer than the "sales figures" we get out of the DCs.

There was no doubt $10MM paid to AK, which they quickly paid off to London or the whole thing tanked.  Once could dispute the blend of assets (way high, IMO, comprised of what?) and debt.  But call it $70MM for these purposes.  Where is it today?  Who is securing it?  Not those reported assets - so what happens in the collapse of Intrawest, assuming it is intertwined within their refi?  The answer is - nothing good.


----------



## Kagehitokiri2

who cares about the 2005 $70MM debt?

2005 net was $8.9MM minus taxes.

and you cant simply write off the 2005 $35MM assets.

not to mention this has nothing to do with the main AKRC property trust or whatever its called, thats owned by members.


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## ClubsRDead

Who said anything about "writing it off?"

You actually think with their debt rolled into Intrawest re-fi, if there is one - short of a filing -- or, a climatic event like the lawsuit being found for the plaintiff's wouldn't be catastrophic to AK, not to mention any other club out there that wants to sell memberships?

Even further, when JT and Co implode, which seems inevitable, you don't think that exasperates those plaintiff's even more - despite knowing they'll never really get a dime out of JT as far as redemption, other than travel while they're paying dues, you actually believe some of them won't push the issue even harder to get a settlement out of AK?

I don't understand some people's motivation to continually defend a dead horse, unless of course - as I said earlier, they have a "inside" motive to promote.

So, take an industry that is suffering in sales and growth already, compound it by multiple lawsuits in the hundreds of millions (win or lose, the negative publicity is a killer for AK's growth) and then, if it happens - throw in a debacle of a re-fi.  Add that calamity to the number of people actually trying to get out of their memberships (from all clubs combined) vs the total membership base --- tell me, what positive do you see?  Give me one single reason why anyone in their right mind would write a check and join a DC today?

Thus, clubs ARE dead..


----------



## wilkes591

So clubs ARE dead,

Why was there a market for them? Why did so many affluent "SMART" people join them? Why are people still writing checks to them? I am not that old or experienced as most UE member's based on the UE's demographics so perhaps you can help me out on why You and I gave them(A DC Club) money.

Markets for everything go up and go down, I think we are close to a bottom for this industry. UE might make it, then again UE might not. The future of UE is not up to me, I will focus my time and so called talents on what makes me money. I never though UE would make it this far past the assessment.

I find it strange that you did not get the e-mails, if you are a member. Call and ask your membership director or planner. 

Did UE shut down the DC4M website? I find that hard to believe.

So the clubs r dead and I will be riding that dead horse as long as I can. So pay the dues on those two memberships and ride that horse!

I did not join to disect the industry or invest in it. 

Happy and Safe Travels!


----------



## Kagehitokiri2

*ClubsRDead*, you cant have it both ways. _either_ people are idiots, _or_ DCs are dead. work with me here.


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## wilkes591

Kages,

I would say clubsrdead post are very similar to Former T&H poster on DC4M. After the assessment, the club was "TOAST" with in six months. Every Lawsuit was going to be lost by UE and "TOAST" was posted at the end of each message. 

Eventually everything ends, so one day the clubs will be dead.

Until then enjoy life and just may be UE might pull it off with help from CapSource. I doubt they want to sell those Lake Las Vegas properties, if anyone actually could give them away. $39,900 for a two bedroom in Vierra the dues are $1,500 a month with a SID/LID. The RE Portfolio is currently way underwater, oh no wait UE lies about everything else, but the stated appraised values are correct. Yeah there is equity, right in a distressed sale in a distressed market. Take a walk around La Quinta, Kwiawah, Cabo Del Sol, and so on, it is one For Sale Sign after another. The best thing for the lender right now is to keep on sucking off the due until the RE market turns in a few years. Then again who knows smart people make dumb decisions all the time.

SOGGY TOAST!


----------



## ClubsRDead

People bought into clubs since 1998 during the proof of concept days, and many didn't pay rack rate, got all sorts of concessions and gimmes.  Most of those folks were TH early members, even before joining with AK, and are now UE members.  The product had appeal and was sexy - the same reason certain car or unique product makes made it big when they came out.  The same reason AOL made money.  But reality did sit in - the "model" of getting all your money back, or even appreciation on it, wasn't sustainable.  Especially when members wanted everything under the sun, and threatened redemption if they couldn't have it.  Fast forward to other companies - like ER who copied McGrath - but with a 20% hold back.  You're less likely to redeem if you have to give something up.  Now that # is 75%.  As a PE Member, you may or may not have had the 100% buy back since they started that way too.  Keith was the COO for Tanner, don't forget that.

JT inherited a time bomb.  He likely wishes today that he didn't give so many concessions when he brought the TH members over.  Dues should be higher.  Services should be more standardized, and cheaper.  He's made some headway in this area, but is still carrying a TON of debt.  If Cap Source works with him, they should - but how long can they allow deferrals?  Everyone talks it up as a member, but in the end how many actually bought shares in the offering.

I did talk to my planner and Steve in Orlando yesterday about the "offering."  Being told merely that if you're out of days, you can pay dues again and start over.  That's always been there.  It's not on the memweb, nor is it going to raise $15MM.

There is no doubt that the only thing to do if you want to keep traveling this way is to pay dues, book days and use them.  So long as you think the dues will support the infrastructure.  But to say "why are people still joining destination clubs?" I think is an invalid question.  Because so it would appear from ALL club proforma's, no one is buying today.  Yes, maybe some "trial" deals, but certainly not writing the big checks and making capital contributions.  And for anyone who says something like "AK sold some 60 or 70 equity memberships last year," you need to then be asking club mgmt at AKRC where your new inventory of houses is.  This was always the problem in the past, everyone touted sales as phenomenal but when it came time to improve availability and introduce new assets, they fell short.  Thus short term rentals popped into the equations and the costs couldn't be supported.

It was my understanding that the Kirschner guy with High Country was responsible for shutting down the other DC forum, but I don't know that for certain.

So, make fun, call it what it is, pronounce everything as being "dead" someday, but if you can't find 5-6 friends that you feel comfortable with pitching your club on, and they in turn don't join, and find 5-6 more, all writing capital contribution checks - thus growing your club, then your (all) clubs are dead.  Does that mean a bullet in the head right now?  No, it can be a slow, agonizing death.  Can it be accelerated by a filing from JT, or a larger run on the bank at ER, or a favorable plaintiff victory against AK, absolutely.  Could it be drawn out if a consolidator came in and bought everything up - sure.  But no one can argue that the "model" itself is flawed, always has been (McGrath said that in numerous interviews online) and isn't cost effective if you don't have continually, transactional cash flow, which means new sales.  And unless that demand is there, you see prices fall and offers and incentives continue.  Like UE currently "no dues" for first year.  Think about it.  How?  Dues are what pay op costs.  Mem fees (deposits) are supposed to secure real estate.  You need BOTH.

It's odd how those that are not members profess to be the authority on the concept.  That's okay, but without skin in the game, you're not fully suited up.

And by the way, what assets and debts AK reported in 2005, or any subsequent year, is very relevant.  How could it not be?


----------



## ClubsRDead

I didn't imply that all people were idiots, to respond to the interim post.

I would argue that the early adopters in fact were quite brilliant in cutting the deals that they did.  I would further argue that those TH members who rolled over to UR and pushed Jim for concessions, which he always honored, were even brighter (and usually the same people).

At ER, it's a different demographic.  Less affluent, more likely to need their cash back, even at 75 or 80%.  TH member money is gone.  All they can do is ride out UE until the end, and if successful, hope for a claim from the AK suit.  The reality however is that if you paid 3-400K (or often less) and traveled 1000 days or so, you didn't really have any economic loss.  You're probably just more than anything pissed that you got one-upped on a concept.

To further the above, if people were in fact idiots, there'd be a string of people lining up to get into the various DCs out there like there were in 04 and 05.  Remember too, this is a lifestyle product, so where you travel needs were in 2000 they might not be now - kids gone, divorce, etc.  Without the 3-1, no one can leave.  People in fact are smart - they must be realizing that they can travel when they want, where they want for $1k a day to almost anywhere and not pay a huge deposit that isn't really buying real estate anyway, and that they may or may not ever see again.  I would say the argument of "give us $350k for a deposit and we won't charge you $30k of dues" isn't working.  Especially when the $350k is supposed to climb over 5 years to $500k based on "market conditions," and you lose 20% of it, in a company where the stock price has not only plummeted, but the capital raising efforts have failed and it's trading at what now, $1.50 on the OTC?  Find 2 dozen people to do that, then ask UE where your new inventory is...


----------



## Kagehitokiri2

ClubsRDead said:


> I didn't imply that *all* people were idiots


oh, not ALL, i see.


ClubsRDead said:


> It's uncanny how many of the DC4MS folks moved over here.  As with the prior forum, nothing gets nor can be resolved here.
> 
> Does anyone still really believe this is a viable product, in a viable economy?  Let's face the realities
> 
> there is NO reason whatsoever to join
> 
> *No one in their right mind* would write a check today to join ANY club.





ClubsRDead said:


> Maybe if people just say "I think I can, I think I can, I think I can" over and over, it will happen...


"some" idiots i guess. still makes clubs not dead.


ClubsRDead said:


> You actually believe if there's a filing with Intrawest that there would be no actual affect on AK?  And if there was, that somehow these homes / assets would be magically protected?
> 
> What is he going to do for cash in this economy, with that model?  Who can answer that?
> 
> *This industry needs regulation.*


if it needs regulation it isnt dead. or will regulation revive it?  and MAGIC!


ClubsRDead said:


> At ER, it's a different demographic.  Less affluent, more likely to need their cash back



ER only added the base plan after a couple years, briefly had ultra plans, and at least one member bought 4 top plans. 

- initial lower deposits were quickly ramped up
- then ~2 years before they added lower deposit plans
- then ~2 years before they added 10 day plan
- i believe its fairly tilted toward higher plans, and at least one member bought 4 top plans
- they briefly had ultra plans

the average net worth stats that ER and Q claimed always surprised me considering travel habit stats.

1. any comment on luxus?
2. IMHO DC = exchange-free, there are plenty of untapped niches/models/etc out there.


----------



## ClubsRDead

Well you're making my point - or agreeing with it.  The club model is teetering, regulatory intervention would be (or have had been) nice.  And yes, the world does have a place for a certain percentage of idiots.  When I say "no one in their right mind would write that check," I don't imply everyone is an idiot.  But there are some...

Luxus - do you mean the Australian / South Pacific travel group?

Trade and exchange free have some merit, and some are trying it like Demure and Cima.  There still has to be fees involved and support from property mgmt companies.  That product primarily though looks like its advantages are just for the homeowners who put their asset in.  I think I read you can be an outsider and join for a few, but your usage rights are much less because you're not contributing a home.  I believe TH had members who also contributed homes, or rented them to the club.

Even if there was a reduced split, ie a 50 / 50 on the membership deposit - or just flat out higher dues - the model might have some signs of repair.  No one should expect to write a big check, travel all they want, and get all their money back.  Nor should anyone promise that - especially in these economic times and considering it's been proven on the various hybrids of clubs out there and certainly with a 3-1, and even doubtfully with a 6-1, that members could ever recoup their monies.  That process calls for actually selling / liquidating the assets to buy members out, which is only sensible.  If ER (lets use your numbers) has 400 wanting out, then they should need less assets.  Okay, sell them.  Oops, problem - no market for them and tremendous loss in doing so.  So, do they take the loss (no) or jack their price and try to get more to buy in?  They've chosen the latter, and it's obviously not solving the needs of those wanting to redeem either.

Isn't still cheaper, and safer on one's cash flow to just pay as they go?


----------



## Kagehitokiri2

the problem with any form of exchange is unequal deposits. (1 night > 1 year)

IMHO its hard for newcomers to compete with TTT as well.

demeure will actually own some properties, so might be kind of interesting to see what happens.

more re ER (all nonrefundable) >
- late 2006 - ultra upgrade $195K 
- late 2007 - supplemental 10 days $99K / $159K 
- early 2008 - holiday tokens $40K / $60K > $49K / $79K > $49K / $99K (increased quickly)
- late 2009? - deferred where your entire first half is nonrefundable $120K > $250K



> The number of members on the waitlist to leave the Club as of June 30, 2008 was *zero* and as of December 31, 2008 was *134*, which represents only 4% of our total membership.
> 
> as of december 31, 2009, the club had 3,259 dues-paying members, with 92% of members renewing their membership during the year.  the club has a resignation list of *379* members, or approximately 10% of the total membership.



average nights per member after 2008 - 37
average nights per member after 2009 - *40*
(residences x ratio x 60 / members)

$90MM was an annual expense number referenced on DC4MS
/ 3259 / $995 = *28* nights

pay as you go? DC trials, hello! (as i mentioned earlier.)


----------



## Kagehitokiri2

interesting - http://www.secinfo.com/dsvr4.v4tv.htm


> In April*2005, KSL, in its role as third-party management company of the Grand Wailea Resort and Spa (“GWR”), entered into an amenity license agreement with Exclusive Resorts Club Management, LLC (“ER”) to provide ER with access to the amenities at GWR and the right to use certain marks and photographs concerning GWR for the benefit of certain condominium units in the vicinity of GWR expected to be acquired by ER from an unaffiliated developer. As consideration for the amenity license and the use of marks and photographs, ER will pay a reservation fee for each condominium unit for which a license is purchased by ER and an annual license fee per unit commencing with the second year of the term, and such license fee increases each year through the last year of the term for each such unit. Subject to certain termination rights, the initial term is ten years with an option in favor of ER to extend the term for five additional years. The estimated financial benefit to GWR over the life of the agreement is approximately $8*million...We received $130,000 for access fees for 2006 under the terms of this agreement during the year ended December*31, 2005. At December*31, 2005, such fees are deferred for recognition as income in future periods.



re people not joining DCs >


> *150* new members joined [Exclusive Resorts] in 2009 and *December* was our best new member acquisition month of the year.


http://www.theperspectivemagazine.c...es-and-an-even-stronger-2010-projected-013639


> Equity Estates added more than *30* owner member families representing 21 full membership equivalents...Much of this growth came in the *last quarter* of 2009, with the company adding seven new owner members during that time. In addition, one fourth of those new owner members were previously members of other destination clubs...


must be 12 full and 18 half?


----------



## ClubsRDead

Do we really believe 150 new folks joined ER in Dec?  Seems to me that they should have been able to reduce a good number of redeemers then?

Let's not forget back in 2005-2006 when they got overly excited when the industry was appearing to flourish and highly competitive -- they ended up coming back and re-stating their sales numbers...


----------



## Kagehitokiri2

try again. 150 for the year.

december and Q4 were respective "bests."


----------



## wilkes591

CRD,

I can agree that UE has an uphill battle to make it out of the woods, absolutely. I just do not agree that there is no chance of it not making. As for the former T&H members getting "good deals from T&H or McGarth" that has to be a JOKE. He ripped the members off in a booming RE market. As for 1K per night on an average cost per night, I must have one hell of a deal if that is what it cost you including the deposit. However I will still lose my deposit.

Do I trust UE management, JT, RK and the rest no way. Are cost and salaries since going "public" wrong, absolutely. However You and I can not fix the problem, current management must or die. So I hope, some how JT can pull something off. ALL UE MEMBERS ARE ON THE SAME SHIP WITH NO LIFE BOATS.

Some of your points are valid, UR paid to much for T&H and gave the T&H members a "Time Bomb" that will never go off because every FORMER T&H MEMBER at UE know UE will never be able to refund anything according to what is in your own posts. 

Other points you are missing, UE is selling additional days to members, like me who never had the opportunity to pay for additional advance reservation days. It will raise capital at little expense to UE. I am not interested, however it will effect availability and it is a deal that is sweet enough that a good number of members will participate. It will provide enough cashflow to keep company going for some period. I really hope it works for UE, since it is not my cashflow. What the end amount is anyone one guess? 3MM, 4MM, 6MM, 8MM, whatever, it is positive cashflow.

The fact that UE has made it this far, in this economy, has to say something about it's ability to stay alive. I did not think it would make it this far, did you?


----------



## Kagehitokiri2

http://investor.shareholder.com/com...F4163D99&filename=Final_FY_2009_Form_10-K.pdf


> In 2009, we established a special purpose entity to maintain ownership of real estate for sale of a Portfolio membership in The Ritz-Carlton Destination Club (“RCDC Club”).  Although we have no equity ownership in the...RCDC Clubs themselves, we absorb the variability in the assets of the...RCDC Clubs to the extent that inventory has not been sold to the ultimate...RCDC Club member...RCDC Clubs are variable interest entities because the equity investment at risk is not sufficient to permit the entities to finance their activities without additional support from other parties.  We determined that we were the primary beneficiary of these entities based upon the proportion of variability that we absorb compared to...RCDC Club members...At year-end 2009, the carrying amount of inventory associated with the RCDC Club was $13 million, all of which resulted from the consolidation of the special purpose entity. The creditors of these entities do not have general recourse to our credit.



banyan tree private collection
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzQ0NjB8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
http://media.corporate-ir.net/media_files/irol/20/200797/2008AR.pdf
2009 - 23? / $1.3MM
2008 - 31 individual & 1 corporate / $1.9MM
2007 - 52 individual & 1 corporate
2006 - ?


----------



## ClubsRDead

The fact that UE has made it this far, in this economy, has to say something about it's ability to stay alive. I did not think it would make it this far, did you?[/QUOTE]


I absolutely did not.  In fact, amazed....still to this day.

Will reply to the other numerous comments over the weekend.

Good night.


----------



## Desties

wilkes591 said:


> The fact that UE has made it this far, in this economy, has to say something about it's ability to stay alive. I did not think it would make it this far, did you?



It's good to see so many of the DC4MS names here! I was hoping the forum would be back up by now, but this will have to do until it's back up.

And, yes, UE's tenacity to live is impressive. I'm impressed by all of the clubs that have made it this far.

The recent annual dues rebalancing is yet another brilliant move to shore up cash flow now instead of 9 months from now. My real concern here is what the club will do early next year -- when 200-300 members are already paid up (well, technically I guess they will owe just 1 of the 4 quarters -- I'm not sure on the logistics). However, JT has found ways to stretch things out in the past, and I'm sure he'll have something in place then.


----------



## ClubsRDead

But look what's being paid for?  Even if this spreads cash flows out, it is not new capital contribution.  All that's happening is a realigning of dollars to allow for their internal burn rate to overpay themselves.  I guess no problem as long as it keeps them open for business and people can travel, but it's not new dollars coming in, nor is it self-sustaining.  His obvious goal was to get to scale where there would be enough members to cover operating costs with dues payments.  Not only is he way short of that number, and would be even shorter on homes required - but then he turns around and offers no dues to anyone to join.  Again, clubs are dead....but maybe this illness just drags on like a cancer....the risk is paying your dues and booking out in the future and having them be around to honor those obligations.


----------



## Desties

ClubsRDead said:


> but it's not new dollars coming in, nor is it self-sustaining.



You're right -- absolutely right -- but it does buy the club another year for new memberships to begin trickling in. It's naive to argue that that will NEVER happen. 

The two bookends of success in terms of self-sustainability for any club are controlling costs and growing memberships. The club was making some serious ground on the former over the past year and change, but the latter has been tough to come by for the industry.

Maybe that will now happen as luxury real estate prices stabilize (something that at the very least will help the equity clubs). And I'm not cheering the "rebalancing" of annual membership anniversary dates because I'm fully aware what it telegraphs. I do think it's a savvy move to buy time and will only be worthwhile if the club is in a better cash flow generating position a year from now.


----------



## ClubsRDead

Again, it buys time - time only.  How much is anyone's guess.

New memberships to "trickle in?"  Doubtful.  If ER was correct in posting their total of 150 sold in a year, and losing some $250MM+ in OpCo -- even a trickle isn't going to help.

There's no real incentive for people to buy memberships today due to the economics - and that's been evident from the # of sales that have / haven't occurred.

Conversely, I don't think real estate prices are stabilizing one bit, certainly not in UR types of places - or with their types of assets.  Pull up Snell or some of the other Cabo listings as an example.  They're all over the board - and the first thing people shed when they're personally cash tight is their 2nd home - as far as large assets go, which often means dropping the price.

The key here is to book your trips and take them I suspect before the end arrives...if they buy 6 months, a year whatever - just book and use is the plan to follow I think.


----------



## Kagehitokiri2

ClubsRDead said:


> Well you're making my point - or agreeing with it.  The club model is teetering, regulatory intervention would be (or have had been) nice.  And yes, the world does have a place for a certain percentage of idiots.  When I say "no one in their right mind would write that check," I don't imply everyone is an idiot.  But there are some...


so not dead, and some idiots. 

* luxus vacation properties, a canadian DC. (mentioned earlier)

* i think it would be interesting to see a DC with 100% *non*refundable deposit, and *no* resale. could make it "equity" ish by requiring a certain % of proceeds from property sales to be retained for future purchases/upgrades/etc.


----------



## wilkes591

ClubsRDead said:


> The key here is to book your trips and take them I suspect before the end arrives...if they buy 6 months, a year whatever - just book and use is the plan to follow I think.



Hit the nail on the head, I can not believe all the houses with reservation two years out. Most members really do not understand the club's situation. I do not always get the house or location I want, but we are fun loving and make the best of each location.

NICE TO SEE YA DESTIES!

Yes, I am glad it is not my capital, but willing members. I thought it was a brilliant move by the club, with the majority of dues paid in December. Now getting in extra dues by March 31st and giving up availability. I guess I will have to be really flexible with locations.


----------



## AKTHUE

*Deposit vs. Dues*



Kagehitokiri2 said:


> i think it would be interesting to see a DC with 100% *non*refundable deposit, and *no* resale. could make it "equity" ish by requiring a certain % of proceeds from property sales to be retained for future purchases/upgrades/etc.



I really see only two ways to make DCs work:

1. Get rid of deposits entirely and make annual dues high enough to fully cover all operating costs and all mortgage costs. If you have 6 houses/member and a $1 million mortgage, that means each member is paying the mortgage interest on $166,666 of principal plus the operating costs and executive overhead; or

2. Have a sizeable deposit but which is limited contractually to only be applied to purchase equity of houses. It cannot be used to pay expenses, and the properties are to be debt-free. This is really the equity model. I don't see why the deposit needs to be non-refundable, and frankly making the deposit non-refundable puts a much bigger risk on a potential member to figure out how many years the club can stay in business so the member gets enough travel.

Any model which relies on the deposits of new members to pay on-going operating costs is effectively a ponzi scheme. It requires new member sales to be sustainable, and the level of new members sales needs to keep increasing as the membership base grows. That can work for a while, but inevitably the rate of new member sales will make it unsustainable. It can only be a start-up mode.

Every club that is in trouble had big joining fees, which people probably thought was going to buy real estate, but in fact was used to pay big sales commissions to the sales people who sold memberships, plus to cover current operating expenses. While the refund of the deposit was promised to help sell memberships, it wasn't making those refunds that got the clubs in trouble - it was that the rate of new membership sales slowed so as to make the business model unsustainable. If they had to honor the deposit refunds, maybe it would make it worse, but the failure of the model occurs even without granting the refunds. 

I think the high deposits do also make the sales process harder and more expensive - big commissions to sales people, ads, brochures, mailings, etc. Maybe there's a model that has an upfront fee that covers those costs, but then annual dues that really cover the operating costs of the club. And there's an equity club model whether there are deposits but the members own the equity and the members need to also govern the managing opco and be able to replace them - much more like a true country club.

I would not recommend joining any DC with big deposits that is not an equity club.


----------



## Kagehitokiri2

again luxus is ONLY no-debt owned properties.

they and m private residences (has some debt and high debt cap) also adjust dues based on year to year expenses i believe. (see my quote earlier from m.)

i am pretty sure the first 2 rocksure funds (very small) are the same, with no debt.

the point of nonrefundable is that you are ensuring members are committed. so highly unlikely they will stop paying dues anytime soon, but they can if they want.


----------



## AKTHUE

Kagehitokiri2 said:


> the point of nonrefundable is that you are ensuring members are committed. so highly unlikely they will stop paying dues anytime soon, but they can if they want.



You have to have an incredible level of confidence in the management team and home portfolio and business model to agree to this. 

I think a equity club with the members having the right to replace the management firm is the best model.

Of course, for the clubs who promised refundability of the deposit, they haven't really delivered on that, so perhaps the members have been better off to treat it as non-refundable.


----------



## Kagehitokiri2

AKTHUE said:


> I think a equity club with the members having the right to replace the management firm is the best model.


can do that if nonrefundable. doesnt matter. 



AKTHUE said:


> Of course, for the clubs who promised refundability of the deposit, they haven't really delivered on that, so perhaps the members have been better off to treat it as non-refundable.


exactly.

the whole point here is resigning is a problem. so remove it.

and investment vehicles are combining things. other route = simplify.

with ER's deferred plan, the only part that is 75% refundable is the part that you pay AFTER 10 years. so if you resign before that, you lose 100% of the first part. if people are doing this, IMHO that suggests nonrefundable is a workable model. it just becomes a question of target audience.


----------



## ClubsRDead

Once you start co-joining a non sustainable concept, with probability, and maybe -- and toss in peoples cash flow, ie savings - you're creating an unspecific algebraic equation that likely pushes them towards nightly rentals, right?  How is anyone, in this economy, with these dartboard prices on real estate supposed to make a quantitative decision on where to "join" or what to do?  Isn't it easier then just to go to VRBO?  Faced with lack or regulation (not that it would help) and the consistent failures in this industry - I again ask, would anyone (is anyone, really - verifiably) buying DC's?  Not 1 or 2 year trials, but actually writing checks for full deposits.  I say they're not - or the redemption lists would be much smaller...

As to the concept of "no refund" membership deposits - why do it?  What do you gain?  You add the limitations of restricted travel rules, and locations, and give up your cash?  I don't see it.  What am I missing?  Just call the Ritz at that point and say "I want to go here."  At least you get what you pay for, and lose the "wonder if I will get my money back" or "can't believe I paid for this" part of the equation.


----------



## Kagehitokiri2

access... discount... (and exchange-free...)

mentioned earlier >
- quintess - raffles canouan ($16,200) la samanna ($9,720) amangani ($5,568)
- banyan tree private collection - banyan tree seychelles ($5,200)

also >
- ER - little dix ($4,680+) arabelle vail ($4,540+)

Q has 5BR at amangani, hotel only has 4BR in inventory

ER also _previously_ had this 3BR at FS costa rica (now up to $19,065) and similar 4BR as well 
(before this one was added to hotel inventory) http://www.fourseasons.com/costarica/guest_rooms_and_suites/casa_de_la_luna_residence_estate.html



Kagehitokiri2 said:


> also re ER >
> 
> at sea island and ritz carlton grand cayman, ER owns hotel-managed 4BR pool villas. the hotels have no pool villas in inventory. nor do there exist hotel-managed pool villa residences. (if there were, you might be able to rent privately, depending on minimum lease.)
> 
> at ritz carlton ft lauderdale, ER owns all 8 3BR condohotel units. (XX02, XX03, XX08, XX09 on 15th/16th floors) 1603 is the best condohotel unit (in the building) with a very large terrace. the condo residences have a 1 year minimum lease.
> 
> at trump chicago, ER owns 7 out of 10 xx00 units (floors 18>27) (the larger/nicer of the 2 2BR floorplans, which can connect to a 3rd BR [xx04].) (the other 2BR floorplan is laid out like its a 1BR + studio, even though it isnt, and doesnt connect to a 3rd BR.) ill have to check residence min lease sometime.
> 
> they also own 4 2BRs on the world. the world requires 6 nt min for bookings. ER doesnt. and ive only seen 1 private rental. (OTOH while cheaper, ER and the private rental are not all-inclusive.)
> 
> re ER once in a lifetime - the seabourn charters would be great for a demographic change to one unlike any luxury all-inclusive cruiseline, and at one point they offered top hotel(s) on st barts. IF they were available over NYE, that is something that is not normally bookable - they are sold out to regular guests more than a year in advance.





Kagehitokiri2 said:


> potentially the most interesting "hybrid" - belvedere @ karma kandara >
> DC-style use + rental income from owned hotel condo/villa + possible quintess exchange





ClubsRDead said:


> lose the "wonder if I will get my money back" or "can't believe I paid for this" part of the equation.



doesnt get simpler than making it nonrefundable


----------



## ClubsRDead

Kagehitokiri2 said:


> doesnt get simpler than making it nonrefundable



Maybe not...unless you're trying to actually sell members on this.  So you would join a "non refundable" destination club?  That's certainly a crapshoot to think it could even be conceived, isn't it?  You've got some 5-6000 folks out there in DCs looking for their (eventual) refunds, and to go to market with one that says there is none isn't exactly a value proposition.

Would love to see a proposal.


----------



## Chicagomark

In real life-there are no refunds on real estate. You take capital risk. Our expecting there to be a bid down 25% forever to take us out was psychotic thinking on all of our parts. 

RCDC is just selling the ability to use unsold timeshares on their resorts. Wow! Wonder what the resale on those "Portfolio Memberships" looks like. The handful of folks that have teed that up, please chime in! I see timeshare resales going off down 60-90% in some cases. Recall a fellow on DC4MS trying to gin up a bid on his membership way down in the hole, and no takers. (Biggest issue is that if you buy on the secondary market, they really limit your ability to utilize other RC properties-just like Marriott Vacation Club purchases in the secondary market.)

ER will either make it, or not over the next five years. I hope they make it. If they do make it, the 10 year deferral will be an ok deal. If they don't, it won't be. To be clear, it is $175K upfront, plus any Holiday fees upfront $99K, and $175 in 10 years. So you're putting up $274K non-refundable right now if you want holidays and 40 days and still have to come up with another $175K if they make it in 2020. 

Tip my hat to debt free A&K-just wonder how they'll move forward given their small size and the overhead that was built for materially more sales. I can hear the chant coming from Fortress, "We're #4 in members, we're #4 members..." 

Don't know what is going on at Quintess-Are they still offering to defer half of the upfront for 5 years? Have seen the lawsuits from the two Hawaii developers-waiting to read their responses. One is titled Moku Kauhale LLC Vs Monogram Real Estate LLC. (Monogram was the LLC formed by Quintess on this transaction.) 

Consolidation in the industry would be great as long as it doesn't involve another Lusso like event. If you put several of the survivors together-squeeze overhead and marketing expenses, better utilize the home. You might have a model that can work. Might......


----------



## Desties

I don't see a non-refundable offer flying, either.

I had narrowed down my choices to Lusso and Private Escapes because they were the two that I liked offering unlimited usage and 100% (or more) deposit refunds. In retrospect, it probably shouldn't have been my criteria since Lusso proved too good to be true and PE wasn't doing so well by the time it finally sealed the deal with UR. However, I objected to partial refunds then and I obviously wouldn't even consider one where it would be 100% non-refundable. The initial deposit would have to be really low to woo members making that kind of blind committment -- and it would probably be too low to buy properties. 

DCs work when real estate prices are climbing. It clearly doesn't when they're not. When prices were inching higher through 2007 club backers didn't mind taking a hit on operating costs exceeding dues because they coudl make it up in property appreciation. The low dues attracted vacation buffs with the means to afford the initial deposits. This scenario -- on a more sober level -- may play itself out when luxury real estate prices recover. So I don't think you'd ever see a non-refundable model.


----------



## Kagehitokiri2

the guy on DC4MS was trying (desperately) to sell RC jupiter fractional. 

AK is debt free but has 5% debt cap. 


Kagehitokiri2 said:


> more re ER (all *nonrefundable*) >
> - late 2006 - ultra upgrade $195K
> - late 2007 - supplemental 10 days $99K / $159K
> - early 2008 - holiday tokens $40K / $60K > $49K / $79K > $49K / $99K (increased quickly)
> - late 2009? - deferred where your entire first half is nonrefundable $120K > $250K


re number of holidays - 3 peak & 3 select


----------



## ClubsRDead

I understand that AKRC is "debt free" (I understand that AK is just carrying and covering their losses) and that the club is an "equity model" and the "homes are owned free and clear.  But doesn't that just really mean that Fortress wrote a check for the homes and took an additional equity interest in AK global?  True, it might not effect the club entirely, but someone, somewhere wrote checks for BH and Crescendo - those dollars have to be accounted for somewhere, right?

One would surmise, since AK itself is really just a travel planning business, that Fortress (or whomever paid for the clubs) wanted collateral on the monies, right?  Wouldn't the simplest, and safest place to secure that "note" be against those homes - whether listed publicly with the members knowledge, or not?

Someone from AK please tell me how that purchase worked, if you can.


----------



## ClubsRDead

Desties said:


> DCs work when real estate prices are climbing. When prices were inching higher through 2007 club backers didn't mind taking a hit on operating costs exceeding dues because they coudl make it up in property appreciation.




In theory one would think this, but I disagree.  I base this on the facts, documented facts, from the TH bankruptcy.  It was proven that had the "then model" actually been followed, ie buying a home for every 6 that join, taking members out on a 3-1, etc. that they still would have failed.  True, dues are a component of the process, but if they're unaffordable, no one will join.  The alternate bidder to UR had a different concept in mind, which likely would have worked (meaning "cash flowed") but the dues needed to be in the range then where ERs are now.  The fact remains, UE dues are too low.  Some members pay less than they even did at TH.  To the appreciation side, that was a neat sales gimmick, but also unsustainable, even if prices had risen.  As prices rise, so do the taxes and carry costs.  And, if people leave, the "model" would dictate that you could alleviate inventory by selling it.  So, you pay say 2.5MM in XXX year for a home that becomes worth say 4MM.  In theory, you've made money, but only if you sell it.  If you do, you lose availability.  Say you do sell it, and go to replace it - say you even sell it for 5.0MM.  You should be able to then replace with two 2.5's, right?  Wrong.  You won't find a couple "suitable" (to member standards) homes for 2.5MM each in the same place, or lets say not as close to the beach, mountain or whatever.  So to "realize" that appreciation and then reinvest it almost becomes an impossibility.  As a member, would you want them to dump a home that you love for 2 crappier homes, likely further away from the activities or main attraction?  Now, say you're an equity club - as a member, YOU own the ups's, right?  What would you do with it then, apply it to reduced opco costs?  Distribute back to original investors?  Are the investors unique to the specific properties (like Everlands attempted)?  So the original members of AK, as an example, own their 18 homes worth XX.  They appreciate to YY over say 5 years.  Do the late joining members get the same percentage of equity as those who rode it out over time?  In theory, the later joiners paid more, so they should also realize something, right?

Bottom line, unsustainable no matter how you look at it, IMHO, and further, unlikely to get traction as a "no refund."  Anything built on ongoing sales is going to pop when the sales bubble busts.  I don't think that is specific to just this industry.  Just in most, you might lose sales and margins drop, but your initial capital isn't also carried as a forward going liability on the balance sheet.  Now you have no cash flow, increased costs and large debt.  When sales slump, people want out.  3-1 doesn't work, and as the market has proven, shedding assets doesn't always either (especially if you're in reality short on them anyway and subsidizing availability with rentals or hotel collections) because they're not quick sales, the prices are too inconsistent and as an example, in the case if UR, would only go towards reducing the secured debt balance, not towards refund of membership deposits.


----------



## TarheelTraveler

There are a number of models that are sustainable IMHO, which are only marginally dependent on sales (i.e., sales are not required to fund operations, but only required to fund sales and some level of desired profit).  However, they seem to be limited to the smaller clubs.  The bigger clubs have made great strides in increasing the dues levels to make them more sustainable, but that also has a tendency to really cut new sales (and encourage existing members to resign).  Also, the debt load of the larger clubs is going to make it really hard to compete.  You need to charge higher dues to pay for the debt, but then again who is going to come in and pay higher dues to support the existing debt?  Definitely some issues there.  However, maybe they've got the portfolio and member referral base to offset the debt disadvantage.

A couple of thoughts about specific points:

If the 250M loss by ER op. co. is correct, that surely includes massive depreciation (not cash losses) right?

On A&K member sales, I clearly stated in the sales numbers that they were vastly tilted towards the trial memberships (particuarly last year), which, of course, wouldn't result in additional homes being purchased.  To the extent equity sales were made, it went to pay out resigning members (remember they went 1 in: 1 out).

A&K IMHO went too big early on with the DC.  Maybe it would have worked for good times, but definitely not given the economic situation.  While they've kept the front line member facing folks, they've made very significant overhead reductions on management, marketing, sales, back office, villa leasing, etc.  We'll know for sure the impact of that in the next month or two when we get the financials, but my impression is it's pretty significant, with the stated goal of breaking even for 2010.  The good thing about the model from the perspective of a member is that the members didn't incur debt for the start-up costs or any shortfalls.

IMHO, that's the way a start-up ought to be funded, rather than on the backs of members without the members really knowing.  If you look at what happened with the non-equity DCs, either real estate got loaded up with debt to pay the start up costs and operational shortfalls and/or less money from new members went into real estate, with more debt resulting.  A&K instead picked up these costs.

However, if you're looking for a negative way to look at it, I guess you could say that they perhaps invested more (e.g., bought the CR and BH management companies and bought additional houses to beef up the portfolio) and that they are going to expect higher sales in order to want to stick with it long term.  But no matter what, I am *100% sure* that the members own the houses that they have purchased debt free and that A&K nor Fortress has any collateral interest in those houses.  They can't collaterize assets that they don't own.  The operative documents cannot be any more clear.  A&K cannot be any more clear when they list out the houses that are owned solely by the members, and the ones that they own.


----------



## TarheelTraveler

Kagehitokiri2 said:


> http://investor.shareholder.com/com...F4163D99&filename=Final_FY_2009_Form_10-K.pdf
> In 2009, we established a special purpose entity to maintain ownership of real estate for sale of a Portfolio membership in The Ritz-Carlton Destination Club (“RCDC Club”). Although we have no equity ownership in the...RCDC Clubs themselves, we absorb the variability in the assets of the...RCDC Clubs to the extent that inventory has not been sold to the ultimate...RCDC Club member...RCDC Clubs are variable interest entities because the equity investment at risk is not sufficient to permit the entities to finance their activities without additional support from other parties. We determined that we were the primary beneficiary of these entities based upon the proportion of variability that we absorb compared to...RCDC Club members...At year-end 2009, the carrying amount of inventory associated with the RCDC Club was $13 million, all of which resulted from the consolidation of the special purpose entity. The creditors of these entities do not have general recourse to our credit.



Anyone know what the RCDC info. from the 10-K quoted by Kage means?

It sounds like they don't own the properties in the member's entity.  They are trying to use unsold inventory, and they've got price risk on their hands until the properties are sold to the ultimate member.  Anyone have a different take?


----------



## Kagehitokiri2

re everlands, they actually had members directly purchase the point resort. cant seem to find the details.

re AK, werent the 2 trials because of excess inventory? and then the discount to decrease the excess inventory?

actually re RC DC, i edited out references to the asian TS (it always said both at the same time) to make it clearer, but thinking about it, isnt it kind of odd to be talking about the asian TS and the RC DC at the same time?

it was in the Q3 report that confirmed they were using unsold fractional inventory. >


> The company will sell a portion of its fractional inventory as part of the new portfolio membership program in Ritz-Carlton Destination Club ("RCDC").



exchange on DC4MS >


> Portfolio Members will OWN a beneficial interest in a "Florida Land Trust" that owns the actual properties. There is no expiration date as this is a deeded interest.
> 
> When I asked about availability and how many properties are actually owned by the trust, that information was not available. However, the club will never sell more than 80% usage nights (points) per property.
> 
> Also, the club will allow members to stay in developer owned properties that have not been sold (i.e. the fractional units) if there is a high demand at a specific property during a specific date.





			
				TarheelTraveler said:
			
		

> Very odd legal structure. I've not ever seen a trust concept combined with deeds for those with an interest in the trust. Maybe this is common in Florida. Does RC have part ownership or a beneficial interest in the trust? Can owners of a portfolio membership be assessed?



perhaps there is a connection to banyan tree private collection model here? terms like "asset-backed" etc?


----------



## Chicagomark

*My Look at RCDC....*

It strikes me that their "trust" is akin to a closed end mutual fund/or Limited Partnership that does not trade ever, wherein they receive the proceeds of new share issuance and receive the ongoing management fees, and are the sole provider of any new assets going into the fund at a price that is profitable to them. Sounds great, for them! 

Think the 10-K makes it clear that Marriott get all the ups there. 

RCDC Clubs are variable interest entities because the equity investment at risk is not sufficient to permit the entities to finance their activities without additional support from other parties. We determined that we were the primary beneficiary of these entities based upon the proportion of variability that we absorb compared to...RCDC Club members...At year-end 2009, the carrying amount of inventory associated with the RCDC Club was $13 million, all of which resulted from the consolidation of the special purpose entity. The creditors of these entities do not have general recourse to our credit.


----------



## Kagehitokiri2

Chicagomark said:


> Don't know what is going on at Quintess-Are they still offering to defer half of the upfront for 5 years? Have seen the lawsuits from the two Hawaii developers-waiting to read their responses. One is titled Moku Kauhale LLC Vs Monogram Real Estate LLC. (Monogram was the LLC formed by Quintess on this transaction.)



Quintess Jerry Fuller vs. Quintess Lawsuit
claims Q owes >
$1,078,000 (*$44,000 per month* * 24.5 months) (jul 15 2008 > jul 31 2010)
$53,000+ late fee
$225,000+ interest
$20,000+ utilities/etc
$2,240,000 damages

Quintess Complaint - Moku Kauhale LLC vs. Quintess
claims Q has not paid anything, has not released money in escrow, stole $300K worth of furnishings, and did not pay for $300K worth of damages caused by members. 



thanks *TarheelTraveler* for sending me the docs.

ah, previously >
http://tugbbs.com/forums/showpost.php?p=867902&postcount=13
http://tugbbs.com/forums/showpost.php?p=868177&postcount=14


----------



## NeilGoBlue

ClubsRDead said:


> I understand that AKRC is "debt free" (I understand that AK is just carrying and covering their losses) and that the club is an "equity model" and the "homes are owned free and clear.  But doesn't that just really mean that Fortress wrote a check for the homes and took an additional equity interest in AK global?  True, it might not effect the club entirely, but someone, somewhere wrote checks for BH and Crescendo - those dollars have to be accounted for somewhere, right?
> 
> One would surmise, since AK itself is really just a travel planning business, that Fortress (or whomever paid for the clubs) wanted collateral on the monies, right?  Wouldn't the simplest, and safest place to secure that "note" be against those homes - whether listed publicly with the members knowledge, or not?
> 
> Someone from AK please tell me how that purchase worked, if you can.




I can basically guarantee that the homes are free and clear.  The only way they wouldn't be is if there was fraud.  The docs are clear, the docs don't allow the club to borrow more than 5% of assets.  Every piece of documentation supports what Myself and Tarheel are saying.  So, unless it's a big scam (it's not), there is no debt on the homes.  PERIORD. END OF STORY.  Please stop saying otherwise, unless you have some proof to the contrary.


----------



## Chicagomark

*Even More Litigation News!*

In the Norring Vs UE/PE lawsuit, UE prevailed on getting most of the suit tossed. Not over-but a win for UE for the most part. 

Read the Cervantes/Priest Vs ER lawsuit today-it is being done Pro Se by the member. Appears she is a lawyer by training as is her spouse-who actually has a pretty nifty resume/credentials. They appear to be one of the first joiners on ER ($295K & $18K a year in dues for 60 nights). They're crying foul over their dues going up to the $995 a night level over the next couple of years.


----------



## Kagehitokiri2

Chicagomark said:


> In the Norring Vs UE/PE lawsuit, UE prevailed on getting most of the suit tossed. Not over-but a win for UE for the most part.


declaratory judgement was not dismissed though
http://tugbbs.com/forums/showpost.php?p=881607&postcount=9


Chicagomark said:


> Read the Cervantes/Priest Vs ER lawsuit today-it is being done Pro Se by the member. Appears she is a lawyer by training as is her spouse-who actually has a pretty nifty resume/credentials. They appear to be one of the first joiners on ER ($295K & $18K a year in dues for 60 nights). They're crying foul over their dues going up to the $995 a night level over the next couple of years.


how did it read? if theyre amazing lawyers, sure will be interesting. surprised it took this long for this kind of situation, considering net worth stats ER and Q toss around.

aha, from another ER member >


> most members had written clauses that locked in their dues rates for 10 years. These clauses were an essential reason that they joined. Exclusive has repudiated these dues clauses, claiming that they can change anything in the contracts in their discretion and/or with the consent of a “member steering committee” that is controlled by management.


----------



## ClubsRDead

I don't know anything about Luxus.

I can't understand what the economic incentive / ie value proposition would be to a "no refund" club membership?  Why would someone join?


----------



## Kagehitokiri2

ClubsRDead said:


> I don't know anything about Luxus.


>


Kagehitokiri2 said:


> luxus vacation properties = only owned homes with no debt and point system
> it is literally not possible to be any more conservative.





Kagehitokiri2 said:


> again luxus is ONLY no-debt owned properties.


...


ClubsRDead said:


> I can't understand what the economic incentive / ie value proposition would be to a "no refund" club membership?  Why would someone join?


>
http://tugbbs.com/forums/showpost.php?p=880648&postcount=129

and


Chicagomark said:


> In real life-there are no refunds on real estate.



and ER is already successful obtaining huge nonrefundable amounts 
http://tugbbs.com/forums/showpost.php?p=880742&postcount=133

(not to mention UE - assessment, stock sales, dues advances, extra dues)


----------



## ClubsRDead

NeilGoBlue said:


> I can basically guarantee that the homes are free and clear.  The only way they wouldn't be is if there was fraud.  The docs are clear, the docs don't allow the club to borrow more than 5% of assets.  Every piece of documentation supports what Myself and Tarheel are saying.  So, unless it's a big scam (it's not), there is no debt on the homes.  PERIORD. END OF STORY.  Please stop saying otherwise, unless you have some proof to the contrary.




You saying that you personally can guarantee something isn't really at question here, but nor is it a guarantee.  Fraud wouldn't be such a far jump in this industry.  Both McGrath and JT changed and manipulated their club docs on a whim.  Not saying AK did that, but you can't say it won't, doesn't, or hasn't happened.

Instead, since you are obviously passionate about your club and it's structure, why don't you answer what I asked someone on the inside to do - how were the monies paid to acquire BH and Crescendo accounted for?  Who wrote that check (presumably NOT AK out of their funds), was it Fortress?  And if so, did they just take an ever larger equity stake in AK?  So while the homes might not have any listed debt themselves, does the opco?  Does AK?  Without getting defensive, can you just please explain the transaction?


----------



## ClubsRDead

Kagehitokiri2 said:


> >
> 
> 
> ...
> 
> >
> http://tugbbs.com/forums/showpost.php?p=880648&postcount=129
> 
> and
> 
> 
> and ER is already successful obtaining huge nonrefundable amounts
> http://tugbbs.com/forums/showpost.php?p=880742&postcount=133
> 
> (not to mention UE - assessment, stock sales, dues advances, extra dues)



Kage - I guess when you infer that a non-refundable club model might work, I think that you actually mean a non-refund of the membership deposit.  I don't equate a holiday usage rider (like ERs) or a mandatory assessment (like UEs) to a "model" itself.  I equate those dollars being charged as a supplement to a model that in fact doesn't work.  To me, stating what people did in 06 or 07 when the club industry still had some signs of a pulse is different than one entering the business with a hybrid plan that would say "pay this, and you won't get it back."  In the prior scenarios you've referenced, IMO, you're equating "must pays" to keep traveling, i.e., I'm already a member say of ER, I've paid my $300k (example), I can't get the travel dates / holidays I want, I can't redeem (the list is too long) and I've already lost my 20-25% based on my membership -- the place looks like it will be open for a while, so why not pay $90k, etc. to get the dates I want?

UE's assessment was similar.  Members were already invested, had trips on the books, the company gave them two choices - pay or we go into liquidation.

Those, to me, are entirely different scenarios than someone new coming out of the box.  At that point, why hand someone else your cash for travel when you could just keep your cash and travel when you wanted too.  As this forum eludes too, there are many options are there.

Again, not saying it couldn't work - just don't see a financial model supporting that.  Past history of certain events doesn't mean something works.  It merely means there was little other choice, right?


----------



## Kagehitokiri2

ClubsRDead said:


> Kage - I guess when you infer that a non-refundable club model might work, I think that you actually mean a non-refund of the membership deposit.


so there are things besides the deposit that are refundable? please enlighten me.

yes i should not have mentioned UE. 

ignoring ER holiday tokens leaves 3 other things that your argument doesnt apply to.



Kagehitokiri2 said:


> more re ER (all nonrefundable) >
> - late 2006 - ultra upgrade $195K
> - late 2007 - supplemental 10 days $99K / $159K
> - early 2008 - holiday tokens $40K / $60K > $49K / $79K > $49K / $99K (increased quickly)
> - late 2009? - deferred where your entire first half is nonrefundable $120K > $250K



they stopped doing ultra plan so there must have been some takers. 

no idea re supplemental days.

anonymous ER member >


> 25% of Exclusive Resorts new memberships sold this year was with the deferred deposit plan.


----------



## TarheelTraveler

ClubsRDead said:


> You saying that you personally can guarantee something isn't really at question here, but nor is it a guarantee.  Fraud wouldn't be such a far jump in this industry.  Both McGrath and JT changed and manipulated their club docs on a whim.  Not saying AK did that, but you can't say it won't, doesn't, or hasn't happened.



Couldn't we say the same thing about every investment?  There could always be some elaborate fraud that was not picked up on by other employees, the auditors, the analysts, etc.  Nonetheless, saying it over and over again without any basis gets old.  Particularly when it would be harder to do than most frauds committed in some back office of a company.

Here is the reality:
1.  The operative documents don't allow it to be collaterized and the club documents cannot be changed in that regard (much more member protective documents IMO as compared to UE and T&H).

2. A&K plainly states it over and over again.

3. The auditor's (KPMG) audited financials say the same thing.

4. I've taken the time before to check some of the real estate records.

5. What idiot lawyer would let them collateralize something they don't own (would be obvious malpractice)?

6. What idiot judge (not trying to get overturned) would actually allow that to be effective, essentially allowing massive frauds of people collateralizing assets that they don't own?

7. I feel a lot more comfortable that the stated reality matches reality when you are dealing with major companies like RC and A&K, as compared to what PerryM says are companies started out of someone's basement.



ClubsRDead said:


> Instead, since you are obviously passionate about your club and it's structure, why don't you answer what I asked someone on the inside to do - how were the monies paid to acquire BH and Crescendo accounted for?  Who wrote that check (presumably NOT AK out of their funds), was it Fortress?  And if so, did they just take an ever larger equity stake in AK?  So while the homes might not have any listed debt themselves, does the opco?  Does AK?  Without getting defensive, can you just please explain the transaction?



Who do you mean by "asked someone on the inside to do?"  You asked someone at A&K?  I hope you're not implying anyone on this board, because you'd be flat out wrong (I actually wish someone from A&K corp. would post on these boards just to put a kibosh on stupid threads like this).  Accordingly, I don't think any member is going to be able to tell you the details of the underlying transaction.  We probably have 300-400 pages of transaction literature, and I'm a huge DC geek, but I couldn't tell you.  A&K bought the BH and CR management companies, and they own the A&K DC management company.  The member equity in the houses were transferred over to the new member entity.  CR members paid in money/incurred debt individually to pay off any mortgages and debt on the houses.  I frankly don't care if A&K or Fortress put up their own money or incurred debt to do the purchase.  They own the management company and I don't.  The only bearing it has on me is I'm sure they will want to sell memberships to get a return on their investment, but is that really any different than any other DC, whether it's RC, ER, or whomever?  At least if that return is not sufficient, I'll be in a vastly better position than in a non-equity DC scenario.

I'm frankly confused about the line of reasoning.  You argue for more regulation and protection of members.  Yet, when people actually come out with DCs, where the actual dirt is owned by the members, you seem to hate it too.  Isn't that structure fundamentally more protective of members than most non-equity clubs where someone else owns the real estate, can leverage the real estate with no governor, can pay themselves what they want, and your interest is governed by a contract that can in many cases be unilaterally amended by club management?


----------



## Kagehitokiri2

TarheelTraveler said:


> 5. What idiot lawyer would let them collateralize something they don't own (would be obvious malpractice)?
> 
> 6. What idiot judge (not trying to get overturned) would actually allow that to be effective, essentially allowing massive frauds of people collateralizing assets that they don't own?


hmm...


TarheelTraveler said:


> Who do you mean by "asked someone on the inside to do?"


i think they meant they posted here asking for the answer from AK member.


----------



## TarheelTraveler

Chicagomark said:


> Read the Cervantes/Priest Vs ER lawsuit today-it is being done Pro Se by the member. Appears she is a lawyer by training as is her spouse-who actually has a pretty nifty resume/credentials. They appear to be one of the first joiners on ER ($295K & $18K a year in dues for 60 nights). They're crying foul over their dues going up to the $995 a night level over the next couple of years.



Interesting case.  Thanks for pointing that out CM.

Amended complaint is linked here.

http://webaccess.sftc.org/Scripts/M...,-AEXCLUSIVE RESORTS CLUB MANAGEMENT\, LLC,-A

Probably the best written plaintiff's complaint that I've seen in a suit against a DC.  ER is trying to get this into arbitration.  If successful, we probably won't find out the result.  Again, the lesson to be learned from this case is be careful what you sign (I actually find it interesting that a lawyer signed it, particularly one this good (although in fairness, she says ER wouldn't negotiate the contractual terms)).

IMO, you can basically boil it down to can dues be raised above the cap that is specifically provided or can ER unilaterally amend the contract, disregarding the specific cap that is provided. Typically, the specific trumps the general in a contract, but I've clearly not looked at the law on that point.

I thought this part of the complaint was interesting:

"11.	Prior to the execution of the Agreement, Exclusive Resorts discussed its business plan with Plaintiff Priest. Defendants represented that Exclusive Resorts' business would be operated on a "for-profit" basis, that Exclusive Resorts was soliciting Membership Fees with the intention of using those fees to invest in and develop a portfolio of high-end vacation properties, and that Exclusive Resorts' business model would assure its ability to repay Plaintiffs' Membership Deposit. Exclusive Resorts further stated that it expected Plaintiffs' annual dues, along with the higher annual dues of Club members who were subsequently to join, to cover the physical operating costs of such properties. Defendants specifically told Plaintiff Priest that neither Membership Fees nor dues were to be used to pay property taxes or investment expenses, which costs were to be covered by the long-term investment returns."

I've not heard that depiction of the model yet.


----------



## ClubsRDead

If anything has been proven on this board (or the prior one) it's that AKRC members are a loyal following, which is admirable.

I ask the question(s) about the "equity" model merely base on postings and statements others make.  If as a member one has the feeling of safety and security with the club, and is confident of their "equity" in it, based on members owning the houses, that works for me.  Obviously that's not the case where I am.  I would think it somewhat relevant how the purchase was done, but if a AKRC member (currently) doesn't, that is their prerogative.

What I don't understand, and perhaps you can explain, is how the equity distribution would work in the event of a wind down?  AK has recently stated that with the inventory they have, they could handle another 50 or so members without affecting availability.  Do you feel this is the case? (Asking AKRC posters here).  If more members did join, but additional assets were not acquired, would that not deplete your equity?

Kage, to your comment above, I have no "argument."  I merely responded to your thoughts that a 100% non-refundable membership deposit model has merit.  I don't see how.  You gave a couple examples of riders and options and upgrade scenario's, from a historical perspective - but I still don't see how and merely posed several of those as being illogical alternatives in todays economic climate.

Whether a "model" has merit or not isn't really the issue.  The adoption or acceptance of the model is what ultimately is important because there would be no club without it.

I think there's some 400 members involved in a lawsuit now that joined AK / TH under the premise that they would get their money back.  That's maybe 10% of the DC membership base feeling "wronged."  To find a group similar in size that would pay under the auspice of absolutely getting nothing back, I believe, would be very difficult.  But, I could be wrong.  That's why I said I'd like to see a structured proposal for how something like this would work, a "conceptual vision," for lack of a better phrase - vs just saying "ER once did this, or UE did that."  In my mind, they didn't do much more than manipulate their members to adjust for their overspending in services and inflated management costs (not to mention debt loads).


----------



## Kagehitokiri2

your posts read better than *PerryM*'s but your behavior is often the same. if only posting a business plan is constructive, why dont you do it? at least *PerryM* claims to have done so on his registration-required website.

another thing i mentioned earlier, belvedere @ karma kandara, is presumably under construction / being delivered.



TarheelTraveler said:


> http://webaccess.sftc.org/Scripts/M...,-AEXCLUSIVE RESORTS CLUB MANAGEMENT\, LLC,-A
> 
> Probably the best written plaintiff's complaint that I've seen in a suit against a DC.
> 
> Defendants specifically told Plaintiff Priest that neither Membership Fees nor dues were to be used to pay property taxes or investment expenses, which costs were to be covered by the long-term investment returns."





> "The Club reserves the right to terminate this Membership Plan or any or all of the Dues Categories. In the event the membershp Plan is terminated or any Dues Category is terminated (a "Membership Plan Termination'), the Club shall promptly cause repayment of any Membership Fee paid by the affected Club Members and any Annual Dues paid within the preceding twelve (12) months. In the event of a Membership Plan Termination, no new membership plans may be offered by the Club without making such membership plans available to Club Members affected by a Membership Plan Termination in the preceding twelve (12) months at economic terms equivalent to or better than the terms such members enjoyed prior to the Membership Plan Termination."
> ...
> "[a]ny amendment shall, automatically and without action of the Club Members, be binding on all Club Members."
> ...
> acquisitions and/or other investment vehicles or releases for properties located at Miraval in Tuscon, Arizona, at Peninsula Papagayo in Costa Rica, and at Kapalua Bay in Maui, Hawaii, were not conducted at arms-length.
> ...
> allege that Exclusive Resorts has used Membership Dues and/or Membership Deposits to pay property taxes, contrary to express agreements and representations to Plaintiff Priest.
> ...
> Section 2 of the Application for Membership defines "Dues Categories" (which Exclusive Resorts claims they have not changed) as identical to "Dues Structures" (which the e-mail acknowledges have been changed).


who says lawyers dont have a sense of humor >





> Under defendants' arguments, Exclusive Resorts could increase daily usage fees to rates of one million dollars per day, ten million dollars per day, or even one hundred million dollars per day, and Plaintiffs would have no choice but to pay those fees and any failure to pay the increase daily usage fees would by defendants' arguments, put Plaintiffs in breach of the Agreement.



the main doc i got cuts off at page 19, but so far >

- 2X breach of contract 
- breach of the implied covenant of good faith and fair dealing
- fraud

lawyers background >
both have worked for Wilson Sonsini et al (Priest became partner in 1995)
both attended Stanford Law, Priest attended Princeton for undergrad

dues increase cap changed from CPI + 2.5% to $150 per day. why bother setting a cap if they can change at will?


----------



## PerryM

Kagehitokiri2 said:


> your posts read better than *PerryM*'s but your behavior is often the same. if only posting a business plan is constructive, why dont you do it? at least *PerryM* claims to have done so on his registration-required website.
> 
> another thing i mentioned earlier, belvedere @ karma kandara, is presumably under construction / being delivered.
> 
> who says lawyers dont have a sense of humor >
> 
> the main doc i got cuts off at page 19, but so far >
> 
> - 2X breach of contract
> - breach of the implied covenant of good faith and fair dealing
> - fraud
> 
> lawyers background >
> both have worked for Wilson Sonsini et al (Priest became partner in 1995)
> both attended Stanford Law, Priest attended Princeton for undergrad
> 
> dues increase cap changed from CPI + 2.5% to $150 per day. why bother setting a cap if they can change at will?



www.perrym.com

No registration needed - just reading skills.


----------



## Kagehitokiri2

PerryM said:


> www.perrym.com
> 
> No registration needed - just reading skills.



nice of you to get rid of registration requirement.

http://74.125.47.132/search?q=cache...ter&cd=1&hl=en&ct=clnk&gl=us&client=firefox-a


----------



## TarheelTraveler

ClubsRDead said:


> If anything has been proven on this board (or the prior one) it's that AKRC members are a loyal following, which is admirable.
> 
> I ask the question(s) about the "equity" model merely base on postings and statements others make.  If as a member one has the feeling of safety and security with the club, and is confident of their "equity" in it, based on members owning the houses, that works for me.  Obviously that's not the case where I am.  I would think it somewhat relevant how the purchase was done, but if a AKRC member (currently) doesn't, that is their prerogative.
> 
> What I don't understand, and perhaps you can explain, is how the equity distribution would work in the event of a wind down?  AK has recently stated that with the inventory they have, they could handle another 50 or so members without affecting availability.  Do you feel this is the case? (Asking AKRC posters here).  If more members did join, but additional assets were not acquired, would that not deplete your equity?



I do think AKRC members are pretty loyal.  I spoke with a good 10-20 members at the member meeting, and it was a happy lot, and I've certainly got no complaints.

Good questions, CRD.  If the members voted to wind down the club (by a supermajority if IIRC (rather than continue on)), the proceeds of the member's entity are distributed solely among the members based on the type of membership purchased.

A&K has told members that they can add additional members while staying under the targeted occupancy (67% IIRC) (not that it won't effect availability).  I'm sure it has an impact on availability, but it's still good.  I know they sold something like 50-60 one-week trials last year, and I personally didn't notice a difference.  If they added 50 regular members (with a few weeks a piece), it would probably be more noticable.  From what I understand, the occupancy max. is supposed to be better than other major clubs, but I've not independently run the numbers.

If new members are added, they are one of two types of members: (i) non-equity trial members who get no equity stake, because they've added no equity and (ii) new equity members that have put in capital contributions which are used to redeem resigning members (on the 1 in: 1 out basis) or is added to the capital account for the club for the purchase of real estate (not for operations).  Accordingly, the addition of new members wouldn't dilute the equity, because they have no access to equity (i.e., trial members), added equity to the club or replaced another member, depending on the situation.


----------



## Kagehitokiri2

i think their point was that if AK is adding members but not properties, to increase utilization, then members will have less of a share in those properties?


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## NeilGoBlue

When AK adds deposit paying members, the money goes into an escrow account.  When the account reaches the 'price' of a house, the house is then transferred into member owned entity.  So, the members own the entity and the 'escrow' account.  Therefore when new members join, there is no 'dilution' in a wind down scenario.


----------



## Kagehitokiri2

but if they are not at peak utilization/ratio/etc doesnt that mean that members currently have a larger share?


----------



## Chicagomark

*Please clarify?*

So A&K/Fortress the parent builds a house to the clubs specific satisfaction, and they will get paid for it when enough money hits escrow, correct?

What price are the members paying? A&K's cost of building, current market value, developer cost? Cost Plus 20% plus the cost of carrying? If A&K has to carry the house for 2 years-they're being compensated for carrying it for 2 years, correct? If so, at what interest rate? If their cost to build is in excess of the current market-what price do members pay? Market or cost?


----------



## Kagehitokiri2

if fortress owns RE developers/etc they dont use them for AK do they?

only ER has that.

when Q members asked this about AK, i recall *QuintessMichael* saying Q and AK were similar. unfortunately cant pull it up.


----------



## NeilGoBlue

Kagehitokiri2 said:


> but if they are not at peak utilization/ratio/etc doesnt that mean that members currently have a larger share?



No, because if there is over capacity, that means that AK bought the house ahead of having money in escrow, and the member owned club doesn't actually own that house.  AK will almost always have a few houses they buy in advance of members...


----------



## NeilGoBlue

Chicagomark said:


> So A&K/Fortress the parent builds a house to the clubs specific satisfaction, and they will get paid for it when enough money hits escrow, correct?
> 
> What price are the members paying? A&K's cost of building, current market value, developer cost? Cost Plus 20% plus the cost of carrying? If A&K has to carry the house for 2 years-they're being compensated for carrying it for 2 years, correct? If so, at what interest rate? If their cost to build is in excess of the current market-what price do members pay? Market or cost?



My understanding, (TT please correct me if I'm wrong), is that the property is transferred 'at cost'.  "At cost' means actual cost, with no carrying cost.  There is no profit in it for AK. And they don't charge any interest. (i'm going to double check, but I think it's correct)


----------



## Kagehitokiri2

gotcha *NeilGoBlue*. and yeah, *TarheelTraveler* has said that every time this comes up.


----------



## ClubsRDead

Kagehitokiri2 said:


> your posts read better than *PerryM*'s but your behavior is often the same. if only posting a business plan is constructive, why dont you do it?



If you're referring to me - then I will answer you.  Because I didn't propose a "no refund membership deposit plan/club."  In fact, myself and others have said on here that it won't fly.  I actually have said maybe you're right, but how, and you gave examples not consistent with running a club.  So - it's your concept - if you say it will work, all the power to you.  I just don't see how, nor would I join.  Therefore, the answer is - if you proposed it (and you did) add something of substance to how it will work rather than say what others did, often totally unrelated, in the past.

FYI - I don't know PerryM, so can't comment there.  Nor until you made reference to the name had I ever heard of him.

The posts below all of that are informative and intuitive.  And, members of AKRC are adding what I consider useful information and insight.  Thank you.  I will read and re-read tomorrow and comment accordingly, not that anyone cares.  I've just had a few tonight (it is an Irish holiday, of sorts) and don't want to misinterpret more than I normally get accused of.


----------



## ClubsRDead

Kagehitokiri2 said:


> i think their point was that if AK is adding members but not properties, to increase utilization, then members will have less of a share in those properties?



This is exactly my point.

AKRC today claims around 145 memberships, I think (but again you experts can confirm) that is all "equity" members, all of us knowing that about 130 or so of them came from the acquisition.  The other 15 or so, who cares - I suspect there were sweetheart deals involved.

If they also have say 75 "trial" members, so be it.  The #'s really don't matter.

What matters is that if XX # of members own YY # of homes valued at $XYZ, but the XX # of members aren't fully utilizing capacity, then the club sells BBB more memberships.  Doesn't the equity that the XX # of members currently have decrease?  It should, assuming that the dollars paid by the latter members are "equity" memberships also.  Or, does the last guy in basically own as much as the first guy in?  Doesn't seem fair, does it?  One rides out the tides, pays dues over the years (to travel, of course) and awaits the depreciation.  The last guy in gets less, right?

Similar of course the the last members to join TH.  They didn't get the opportunity to travel some 100 days / year like others, so their "economic loss" is higher.

Thus - the genesis of the AK lawsuit, whereby proving "economic loss" will be of primary importance.  One might have paid $400k, but if they travelled 800 days (purely an example) over time, what was their ADR vs what they might have paid elsewhere, ie what is their "loss?"


----------



## wilkes591

NeilGoBlue said:


> My understanding, (TT please correct me if I'm wrong), is that the property is transferred 'at cost'.  "At cost' means actual cost, with no carrying cost.  There is no profit in it for AK. And they don't charge any interest. (i'm going to double check, but I think it's correct)



What company in there right mind would build a house and give it to an unrelated company "At Cost". If that's the case then CRD is correct about the relationship between AK/Fortress.

All the builders I have ever dealt with built house with the idea of making a profit. I know that profit does not happen very much in the DC industry, so the idea of a club with equity is to good to be true.

But please if it is to good to be true, then it is not true! No offense meant to AK members, I just can not see one unrelated company giving members high end custom homes at cost. Builders always have a very high mark up on high end custom construction. Currently the cost of building high end house exceeds the existing high end home market. What does the club do in market such as this one? Not that they are adding anyway.

The equity model might work in the typical RE market, the problem is what happens in a deflationary housing market. How do you get members when everyone know home values are decreasing and might continue to decrease for years. 

If economic conditions in the housing market continue it will be very hard for all clubs to survive. Nothing we did not already know.


----------



## PerryM

*Power to the people...*

To all you DC members out there this is an ideal time to create a DC Members' Association.  Forget the DCs themselves and form an association and set your own guidelines for DCs and invite DCs to participate, and those that conform to your guidelines get your seal of approval.

It's sad to see all of you hanging around a timeshare oriented website mumbling about this and that about DCs.  The timeshare owners here could care less.  I do, since I still like the concept of a DC but I just know that all those fast talking hucksters that gave birth to the DC industry are hatching schemes in their basements as we talk.  If you don't do something about this you will be bemoaning the state of affairs years from now - it will be just the old status quo which you have grown accustomed to.

Look at some of the power this website has to ARDA which is developer oriented - they know of this site.  Granted the developers ignore TUG since we are intelligent about timeshares and pose the greatest threat to them.  Same with DC's - they flourished with lots of folks who had "pocket change" to blow on schemes they were not knowledgeable about.

So start a website, hold elections, and steer the DC industry away from the awful mess it created by having hucksters run the industry.  No one is going to do this for you but yourselves.

This is a great time to do this and get some great press to help you...


----------



## TarheelTraveler

ClubsRDead said:


> What matters is that if XX # of members own YY # of homes valued at $XYZ, but the XX # of members aren't fully utilizing capacity, then the club sells BBB more memberships.  Doesn't the equity that the XX # of members currently have decrease?  It should, assuming that the dollars paid by the latter members are "equity" memberships also.  Or, does the last guy in basically own as much as the first guy in?  Doesn't seem fair, does it?  One rides out the tides, pays dues over the years (to travel, of course) and awaits the depreciation.  The last guy in gets less, right?



The only ones that get equity are the ones that put in equity.  The level of membership one buys determines the equity if there was a wind down.  The price of the membership does fluctuate up and down.  Currently the memberships are marked down, which one could say is a fair reflection of the market (my house is certainly not worth as much either), but nonetheless does result in a some equity dilution to the extent that new members are being added versus replacing resigning members.  However, to A&K's credit (for whatever reason, they never get credit for doing anything right on these boards despite the purely ridiculous antics of other clubs), they've significantly reduced their commission, so that the equity going in is much less of a reduction.  Now I'm sure they did that in anticipation of some members saying why are you reducing the price of memberships, but the way I look at it, you've got to have your head in the sand to think that your house, vacation house, timeshare, fractional, whatever is worth the same as it was two or three years ago.

The same question has come up about other equity clubs.  I remember the criticism about EE was that they don't mark up or down the value of the portfolio for purposes of buying into the fund.  I can maybe see that argument better in the investment context like EE, but it's not like we're dealing with mutual funds here either.

To the point about never getting credit for doing the decent thing, unlike a lot of other clubs that seem to escape criticism, A&K _doesn't_ have a development arm that buys houses, marks them up 20-40% and then sells them to the club.  Of course, with other clubs, that (at least in the past) has not been disclosed to members.  In contrast, A&K simply buys from a builder, furnishes it, and sells it at cost to the member's club.  It's not a way of making money.  Until the member's club has the money to buy the property, the member's club gets to use the property but accordingly does pay for the utilities, HOA fees, destination host, etc.  Of course, the house could lose value in the interim or it could increase in value in the interim.  Of course, the criticism from the boards will be doesn't that mean members are overpaying for houses now.  Sure (although in reality it's academic, because the member's club is not buying any houses now), but members are underpaying in normal times when appreciation has ranged from 2-5%.

Non-equity clubs were designed around appreciating housing markets.  The club owner's incentive to own the club was the appreciation and the tax benefits from the depreciation, and if the club thrived maybe then from the enterprise value of the club down the road.  The problem with non-equity clubs is that with the housing market getting crushed, appreciation in the portfolio became less and less of a likely reality, and their other investments were also getting crushed, so the losses were of no tax benefit either (no gains to offset), so why put more money into a money losing business.  Hence, the shut down or retooling of a number of non-equity DCs.

An equity club is analagous to buying a vacation property.  If the value goes up, it's our portfolio that is increasing in value.  Conversely, if the value goes down, it's our portfolio that is decreasing in value.  The value of the portfolio nonetheless has no effect on my vacation enjoyment of the portfolio.  Just like the value of a timeshare or fractional doesn't effect the vacation enjoyment of the property.  However, it surely has some tangential effect on the value of my membership, again just like the value of a timeshare or fractional.

The concerns for an equity club are a good bit different than those of a non-equity club.  If the equity club sponsor like RC, A&K, EE or whomever can't sell memberships, they may decide to get out of the business, so the real risk is in losing your sponsor.  You still own the real estate and can continue on, but you end up needing to do something like M Private Residences did, which is hiring their own management.


----------



## TarheelTraveler

PerryM said:


> To all you DC members out there this is an ideal time to create a DC Members' Association.  Forget the DCs themselves and form an association and set your own guidelines for DCs and invite DCs to participate, and those that conform to your guidelines get your seal of approval.



I don't often agree with PerryM, but that does make a lot of sense.  If people expended half the energy that they do trying to find some fault in some competing club's model on trying to actually improve the industry as a whole (or even just their own club), we might actually get somewhere.  Members individually have very little pull, but as a group, it's a much different story IMO.


----------



## vineyarder

TarheelTraveler said:


> I don't often agree with PerryM, but that does make a lot of sense.  If people expended half the energy that they do trying to find some fault in some competing club's model on trying to actually improve the industry as a whole (or even just their own club), we might actually get somewhere.  Members individually have very little pull, but as a group, it's a much different story IMO.



I don't often agree with him either, but I do this time!

At the very least it should be pretty easy to replicate the DC4MS under a new name.

I nominate *Tarheel* as President of the DC Members Assn. and *Kage* as Webmaster... and while we're at it, I'll nominate *3DH* as social director.


----------



## TarheelTraveler

vineyarder said:


> I don't often agree with him either, but I do this time!
> 
> At the very least it should be pretty easy to replicate the DC4MS under a new name.
> 
> I nominate *Tarheel* as President of the DC Members Assn. and *Kage* as Webmaster... and while we're at it, I'll nominate *3DH* as social director.



I think I probably need the cocktails associated with being social director more. 

Separately, there had been some talk offline with starting a new DC4MS if it doesn't reappear.  Any one have any idea if it's coming back or know what happened?  I've heard rumors from various folks but would love to hear from someone in the know.  If it's legally related as most suspect, I'd be willing to chip in for the legal defense fund.  It's not like he was making any money off of the site.


----------



## Kagehitokiri2

the only point of nonrefundable is to have committed members only. random thought - could do "surprise" (not mentioned before joining) "dividends" after property sales.

that got me onto another track. a fund club that is perpetual. could make deposits here nonrefundable too. (could be transferable.) instead of selling all properties simultaneously after x time, you sell regularly. and every time you sell, the entire amount is divided by # of members, and members can either withdraw or "reinvest." 

also a thought for hotel/resort-managed properties - as long as they are reasonably upscale, clubs could let the hotel/resort upsell same-day or last-minute.


----------



## ClubsRDead

TarheelTraveler said:


> Now I'm sure they did that in anticipation of some members saying why are you reducing the price of memberships



Didn't their price reduction have to do with a couple things - 1) obviously stimulate sales, 2) a moderate reflection of what the marketplace is for resort real estate (assuming they are in the mode of buying any, and more importantly, 3) a trigger point for legacy members wanting to redeem.

There was some chatter about BH and CR members having a window of time to redeem out at their "then XX % of market value."  Not sure if you can confirm that or not.  Would seem if you had some redemption trigger that lowering the prices would be the best way to stop that run on the bank effect, and based on market conditions, one would be even more justified in doing so.

Are AKRC members who came from the acquisition actually wanting to redeem?  I wouldn't think many were.


----------



## TarheelTraveler

ClubsRDead said:


> Didn't their price reduction have to do with a couple things - 1) obviously stimulate sales, 2) a moderate reflection of what the marketplace is for resort real estate (assuming they are in the mode of buying any, and more importantly, 3) a trigger point for legacy members wanting to redeem.



I believe that is a fair characterization.



ClubsRDead said:


> There was some chatter about BH and CR members having a window of time to redeem out at their "then XX % of market value."  Not sure if you can confirm that or not.  Would seem if you had some redemption trigger that lowering the prices would be the best way to stop that run on the bank effect, and based on market conditions, one would be even more justified in doing so.



CR members could redeem their memberships starting at the end of last year.  Not sure about the BH members.  There is no deadline for doing so, so legacy members are free to do so at any point going forward.  In either case, I believe it's based on the current selling price of the memberships. 



ClubsRDead said:


> Are AKRC members who came from the acquisition actually wanting to redeem?  I wouldn't think many were.



I don't think very many at all are redeeming, and to the extent that there are, the 1 in: 1 out is providing a pretty short wait.  Of course, the disadvantage to that for existing members is you're not adding houses as long as you've got someone wanting to redeem.


----------



## NeilGoBlue

CRD,

AK does not make money on the transferring of home from the developmental company to the member owned club, it does make money three ways:

a certain percent appreciation of club assets
10-15% of annual dues (can't remember exactly)
27.5% of the sale of a membership.


----------



## ClubsRDead

That might have been a strategy that TH could have employed - freeze, or just lower prices.  Who knows what that might have done to the run on the bank that they had.

I would say that (despite being sometimes price prohibitive, and a root of many cash problems) that the services were better at TH than at UR.  And of course, there were more, and in my opinion, better homes.


----------



## ClubsRDead

NeilGoBlue said:


> CRD,
> 
> AK does not make money on the transferring of home from the developmental company to the member owned club, it does make money three ways:
> 
> a certain percent appreciation of club assets
> 10-15% of annual dues (can't remember exactly)
> 27.5% of the sale of a membership.



Curiously, when is the last time AKRC bought a new asset?  Has it happened since the acquisition?  

Also, it's my understanding that AKRC members can book certain AK villa's, which I don't think they actually own any of.  Does AK take a fee from AKRC for accommodating this availability?

I thought I just read in a prior post that AK reduced the management fee / commission, ie the 27.5%.  Wasn't it this # since inception?


----------



## ClubsRDead

Kagehitokiri2 said:


> the only point of nonrefundable is to have committed members only. random thought - could do "surprise" (not mentioned before joining) "dividends" after property sales.
> 
> that got me onto another track. a fund club that is perpetual. could make deposits here nonrefundable too. (could be transferable.) instead of selling all properties simultaneously after x time, you sell regularly. and every time you sell, the entire amount is divided by # of members, and members can either withdraw or "reinvest."



Still not seeing how this model works conceptually.  Not saying it couldn't, but not on with it yet.

Constantly selling the properties would be a difficult process in the DC arena.  Aside from the fact that resort real estate is often hard to sell, and takes time, members typically get accustomed to the properties.  Not to mention the management companies in each destination going to tremendous lengths to get the homes set up and standardized.  Churning the homes, IMO, would be difficult, and expensive.  Don't you get back to where you've maybe paid $3M for an asset, it appreciates to say $5M, yet when sold you can't replace with a suitable alternate in a like area at a reasonable price?  Seems to me in this scenario you have to count on a "up" in the market to realize a meaningful sale, but a "slump" in the market to find asset replacement.


----------



## Kagehitokiri2

i didnt mean churning, i meant like the clubs that have sold properties. id like to use EE as an example, but i think all their replacing has been of leased properties. perhaps "regularly" was not the right word.

isnt your "conceptual" problem with DCs to begin with?

AK >


			
				TarheelTraveler said:
			
		

> Dues are divided as follows:
> 
> 82.5% club operating expenses: property taxes, insurance, utilties and maintenance, members services, member travel benefits, etc.
> 
> 12.5% Management fee to A&K manager (of course, this is not all profit, as they actually pay for the management of the club using this fee); to me this is analogous to a property manager for a condo complex or a HOA
> 
> 5% goes into the capital reserve fund
> 
> Member contributions are divided as follows:
> 72.5% to the capital account for purchasing Club assets
> 12.5% for membership sales and marketing expenses
> 5% for general and administrative expenses
> 10% return or profit to A&K manager



2009 - 40 weeks (in jun jul aug) @ 12 villas 
2010 - ? weeks @ 5 villas
(didnt they have more than 5 at some point in between?)

originally 13 european hotels (from bellehavens) now down to 4


----------



## ClubsRDead

Kagehitokiri2 said:


> isnt your "conceptual" problem with DCs to begin with?



No, I wouldn't say that's correct at all, having paid big dollars to join.

My problem with the concept is losing all my money.  Sure, lost / wasted big chunks before and likely will again.  But when this model was really tore into and broken down, it's no wonder the money disappeared, and odd that it hadn't happened sooner, and to more clubs in general.


----------



## TarheelTraveler

NeilGoBlue said:


> CRD,
> 
> AK does not make money on the transferring of home from the developmental company to the member owned club, it does make money three ways:
> 
> a certain percent appreciation of club assets
> 10-15% of annual dues (can't remember exactly)
> 27.5% of the sale of a membership.



Why am I starting to feel like I'm in the kid's book, "If I give a mouse a cookie, then..." or perhaps the movie Groundhog Day?

I think the first is actually if the membership prices increase, and the selling member would make money with a resale of the membership, I believe 80% of any gain would go to the member and the balance to A&K.

The 27.5% commission has been reduced to around 10% I believe for so long as that promotion is running.

I know the club pays A&K for the trips on a wholesale basis.  Not sure about the villas.

A&K acquired some assets post acquisition but all were announced as part of the acquisition.  As I mentioned before, I think they tried to go too big at introduction and then we had the economic collapse.  Since then, they've been trying to scale back down to reflect the reality of the market and eliminate the A&K subsidy to the club.  The thought was why are we leasing assets when we don't need to be leasing assets, as we've got plenty of houses.  On top of that, we've got the A&K trips if you needed availability for a certain time period.  No assets have been sold or acquired, but the leases have been cut. 

CRD - So I assume you were a T&H member originally based on your post?  Just curious, are you one of the members that joined when A&K licensed its name to T&H and are you part of any of the litigation against A&K?


----------



## TarheelTraveler

http://www.marketwatch.com/story/re...-of-marketing-2010-03-15?reflink=MW_news_stmp

"Arthur oversaw the process for Frontier Airlines that led to the development of the airline's wildly successful "A whole different animal" branding campaign. He was also responsible for rebranding the Beaver Creek ski resort into one of the leading resorts in North America through the "Not Exactly Roughing it" campaign, and he developed the successful "There's no place like together" brand for Exclusive Resorts. He also served as director of Marketing for Nike, one of the most recognized brands in the world." 

I loved that ER marketing campaign.  Probably the best DC marketing out there in my view.


----------



## ClubsRDead

TarheelTraveler said:


> CRD - So I assume you were a T&H member originally based on your post?  Just curious, are you one of the members that joined when A&K licensed its name to T&H and are you part of any of the litigation against A&K?



Yes, originally T&H on the high side of things.  AK was loosely affiliated at the time, or so I thought, but I believe the relationship had terminated or was in wind down when my monies cleared from what I now know.  The option to take AK trips / journeys was a part of my "deal" and I actually did take a few.  At the time I think TH housed a AK travel person in their service center in Kansas City.  The marketing materials from the time I began to review the club until when I actually joined did change.

I'm not part of the branding / licensing suit.  Been asked many times and don't believe there is a basis there.  I was told upfront if it was my last dollars to not join the club.  I made the decision on my own accord, talked to numerous members at the time and all were more than happy (now we know why).

Some argue there is merit to the litigation.  I see it merely as pouring good money after bad.  I wish AK had been more proactive in resolving it, and I think they could have made offers at inception, certainly at least when Fortress got involved, and induced members over to their new club.  The economics would have been an issue to resolve but I don't believe an insurmountable one.

At the end of the day, I don't think most are mad about the money.  I think feeling swindled more accurately depicts it.  I consider myself fairly smart, have been economically successful (like many of the other members) and to make 6 and 7-figure mistakes isn't all that common...


----------



## Kagehitokiri2

ClubsRDead said:


> No, I wouldn't say that's correct at all, having paid big dollars to join.
> 
> My problem with the concept is losing all my money.  Sure, lost / wasted big chunks before and likely will again.  But when this model was really tore into and broken down, it's no wonder the money disappeared, and odd that it hadn't happened sooner, and to more clubs in general.





ClubsRDead said:


> That might have been a strategy that TH could have employed - freeze, or just lower prices.  Who knows what that might have done to the run on the bank that they had.
> 
> I would say that (despite being sometimes price prohibitive, and a root of many cash problems) that the services were better at TH than at UR.  And of course, there were more, and in my opinion, better homes.


im at a loss here. TH owned 67 properties for 874 members, used member deposits for venture capital (unrelated real estate developments etc) and had no limitations on their "rent on demand."

*PerryM* says rent http://tugbbs.com/forums/showpost.php?p=871788&postcount=28
my response http://tugbbs.com/forums/showpost.php?p=871790&postcount=29
*TarheelTraveler* response http://tugbbs.com/forums/showpost.php?p=871886&postcount=30
*AKTHUE* response http://tugbbs.com/forums/showpost.php?p=871895&postcount=31

*ClubsRDead* says rent http://tugbbs.com/forums/showpost.php?p=878252&postcount=71
my response http://tugbbs.com/forums/showpost.php?p=878276&postcount=72

*ClubsRDead* says rent again http://tugbbs.com/forums/showpost.php?p=879615&postcount=110
i point out that ive already responded http://tugbbs.com/forums/showpost.php?p=879616&postcount=111

*ClubsRDead* questions value(point/concept) of DCs http://tugbbs.com/forums/showpost.php?p=880629&postcount=128
my response http://tugbbs.com/forums/showpost.php?p=880648&postcount=129



ClubsRDead said:


> Yes, originally T&H on the high side of things.  AK was loosely affiliated at the time, or so I thought, but I believe the relationship had terminated or was in wind down when my monies cleared from what I now know.  The option to take AK trips / journeys was a part of my "deal" and I actually did take a few.  At the time I think TH housed a AK travel person in their service center in Kansas City.  The marketing materials from the time I began to review the club until when I actually joined did change.



in my post here i quoted "licensing agreement terminated in August 2005"
http://tugbbs.com/forums/showpost.php?p=879106&postcount=98
(although licensing fees earned $1.5MM in 2006)

re lost deposits >

yellowstone club world chapter 7 had 3 people seeking $1.5MM each

15 members of TH paid a $1.3MM deposit, then $80K > $160K in dues for legendary retreats before TH filed chapter 11 about a year later. including opp cost, thats ~$1.6MM for a max of 56 nights.

8 solstice sky members paid deposits up to $2.49MM


----------



## ClubsRDead

I don't understand the point of your post and re-quotes above.  That's okay, I don't have too.  Hopefully it wasn't just to rub in the pain.

No doubt I have said, ie the "club concept is dead," (evident by sales) that one is more likely to rent and pay as they go.

TH only sold like 52 properties to UR.  Some UR just didn't take at the last minute, but not sure that it was 15 of them.

I don't think anyone disputes that short-term rentals were a problem.

So too was unlimited travel days - not just in the rentals, but in the owned assets.  The rentals, for the most part, or long-term leases, were often nicer than the owned inventory.  I still say that UR's best assets, some of them now since the acquisition, were often TH's "worst," or put differently, least utilized.

At the LR level, it turned out we didn't own any homes.  There was some weird arrangement on a couple with some equity-split, etc but I have no idea how that turned out.  That' why LR members have become "Platinum" members at UR / UE.  And now booking travel in what used to be DR and PR level homes at TH.  Not that exciting...


----------



## Kagehitokiri2

you were legendary? ouch.  hope you used a bunch of nights.


ClubsRDead said:


> At the LR level, it turned out we didn't own any homes.  There was some weird arrangement on a couple with some equity-split, etc but I have no idea how that turned out.


sounds like they might have been doing some lusso-style arrangements with property owners.

IIRC i got the both numbers from an article on bankruptcy filing.


ClubsRDead said:


> No doubt I have said, ie the "club concept is dead," (evident by sales) that one is more likely to rent and pay as they go.


thats not what you said... you repeatedly said 'why would anyone join instead of renting?' (in other words 'DCs are worthless' & 'people who would join are stupid') and you ignored any responses to these statements/"questions."

* for those who want to rent, there are DC trials

* DCs can provide things rentals cannot

re unlimited use, i could post details on the main fractional system


----------



## ClubsRDead

Kagehitokiri2 said:


> thats not what you said... you repeatedly said 'why would anyone join instead of renting?' (in other words 'DCs are worthless' & 'people who would join are stupid') and you ignored any responses to these statements/"questions."



No, we had a whole thread on this, where you challenged "everyone is an idiot," and I said - but there's plenty.

I'm not sure if this is intended to be a useful board and trade of information, or just a few out there wanting to pick everyone's comments apart?


----------



## Kagehitokiri2

how about explaining your repeated positions that DCs can never offer anything of value, and rentals are always better?

also, statements that imply all DCs have the same exact financial structure are pretty ridiculous.



ClubsRDead said:


> I'm not sure if this is intended to be a useful board and trade of information, or just a few out there wanting to pick everyone's comments apart?





ClubsRDead said:


> It's uncanny how many of the DC4MS folks moved over here.  As with the prior forum, *nothing gets nor can be resolved here*.


depends on how you define resolved. but its not about resolution, its about information. (as you now agree )


----------



## ClubsRDead

What DC do you belong to again?


----------



## PerryM

*Wikipedia*

Do a search for "Destination Club" in Google and the Wikipedia definition is 4th from the top - http://en.wikipedia.org/wiki/Destination_club 

I'd suggest that any DC member who cares about DCs update the definition and supply a list of current DCs and some stats for each.  Anyone can add their knowledge of DCs for the rest of the world to read.

That would be a lot more help than you guys playing catch with knives.....


----------



## Kagehitokiri2

TH owned 67 properties for 874 members (13:1)

ive said this was ridiculolus in the past.

however, just remembered this re EE's plan and debt cap. >

ratio 


> Equity Estates has a 10:1 member to home ratio for "Purchased" homes and they have a 7:1 member to home ratio for total homes



lease (~30%) 


> we expect to have invested over $100 million into 30 to 35 residences and we will lease 13 to 15 residences. We intend to have 43 to 50 vacation residences



debt 


> The maximum allowable debt is 23% of total assets or 30% of net assets.



(if TH owned figure was 70% then 30% lease, total ratio would be 9:1)

***

*SciFrog*, looks like 3 contracts at FS vail were canceled, and prices (at least on top units) have been dropped
http://residences.fourseasons.com/private_residences/vail/your_private_residence/ownership_overview/
FS = 1 vail rd

http://www.vaildaily.com/article/20100320/EDITS/100319453/1021&ParentProfile=1065
owners start moving into solaris next month
solaris = 141 e meadow dr


----------



## travelguy

Kagehitokiri2 said:


> TH owned 67 properties for 874 members (13:1)
> 
> ive said this was ridiculolus in the past.
> 
> however, just remembered this *re EE's plan and debt cap*. >



As we've discussed ad nauseum on DC4MS, I believe there are serious questions about not only the EE biz plan but also the statements from the EE Execs themselves!  The EE execs were caught up several times in their contradictory statements about how their finances were applied to their biz plans.  IMO, EE has benefited greatly from the demise of the info posted on DC4MS.


----------



## Kagehitokiri2

*travelguy*,

for me, the "unanswered question" is what is tied to interest payments.



> i think my calculation was something like 7.5% over 10 years, and i got ~$10K per member per year
> 
> thats in addition to mgmt fee of ~$3K per member per year



although i guess there is no reason they cant still have debt at sale time, and just deduct it from distribution.

changing 10 years to 30 years would drop it 40%? that would be ~$6K per member per year.


----------



## travelguy

Kagehitokiri2 said:


> for me, the "unanswered question" is what is tied to interest payments.
> 
> 
> 
> although i guess there is no reason they cant still have debt at sale time, and just deduct it from distribution.
> 
> changing 10 years to 30 years would drop it 40%? that would be ~$6K per member per year.



I also don't believe the EE execs various answers for the source of the "operating costs".  We are to believe that the lower than "market" (or what's left of the market) membership costs will support their current and future overhead in addition to providing equity in the properties?

One thing that EE has is momentum in new membership income and true believers that continue to fund the club while defending it's fuzzy numbers.  This scenario seems very familiar to me .....  

Really wish we had the cached pages of DC4MS to quote from.


----------



## ClubsRDead

Kagehitokiri2 said:


> TH owned 67 properties for 874 members (13:1)
> 
> ive said this was ridiculolus in the past.



This is really a mute point since it's all long gone.  But their member to home ratio was not 13-1 when you count also the short term rentals, longer term rentals - and long term leases.  Plus, you had maybe 15-20 other homes in the mix of things that came thru various (and odd) member deals.  Availability was never an issue at TH (thus a big part of their downfall).

McGrath had some wacky formula that for every 6 you should buy (wasn't followed at the end, and certainly not after AK separation), plus you bring on a long term lease and something like bring on a rental for every 12.  I can't remember how he explained or justified it, it didn't work.  But you could pretty much book where you wanted, when you wanted.  And LR members could book downwards too, meaning take a DR or PR level home if it was in a place you wanted and available within a certain time frame.

I do know this, there were not 67 properties sold to UR.  It was 52 or 54.  Some of the properties you refer to from quoting BK figures must include the empty lots, Carnegie Abby (not bought by UR), and some other fractional interests.  They were considered properties or interests, but didn't go forward into UR / UE.


----------



## Kagehitokiri2

just looking at (current) dues, they really arent _that_ different once you break them down. (i compared with AK.)

hideaways is ~$500/nt as well.

m private residences is ~$500>$800, and is allowing resales again. 

OTOH, if lack of transparency wasnt silly to begin with, surely the state of the industry/etc has made it so.

looking at rocksure again, definitely resembles luxus. fund B has 1.5 units left. not sure where they stand on capital fund. theyve started marketing that to corporate market. theyve also started exchange between funds now, although it involves cash.


----------



## ClubsRDead

I ask what I asked above, again - what club do you belong to?


----------



## travelguy

ClubsRDead said:


> I ask what I asked above, again - what club do you belong to?



Club Kage!  

Maybe Kage is too smart to join a DC at this point?

Personally, I think it's a benefit that Kage does not belong to a club (that I'm aware of) and can be an impartial skeptic, as am I.


----------



## PerryM

travelguy said:


> Club Kage!
> 
> Maybe Kage is too smart to join a DC at this point?
> 
> Personally, I think it's a benefit that Kage does not belong to a club (that I'm aware of) and can be an impartial skeptic, as am I.



Well. does that include me too?


----------



## Kagehitokiri2

*travelguy*,



Kagehitokiri2 said:


> im "impartial" because i feel extremely strongly about trying to be that way. i wouldnt act differently if i was a member of a club, or a club employee. i would just have more information. (assuming no NDA etc)


----------



## ClubsRDead

In light of the DCMS board being "gone," I had heard this one offered certain levels informative insight into the various clubs, offerings, what was happening with each, legal issues, redemptions, etc.  That hasn't exactly proved to be the case, although those inside of AK have offered what I feel to be good information and opinions.  Apparently no one from ER has anything to say, or cares, and few if any from UR/UE have much to say other than hurry and travel while it lasts, which I agree with.  I didn't really participate in the prior board, rather read numerous postings when time permitted.

I don't have to waste my time, nor anyone else's here by posting.  And am not strongly compelled to do so if every time I post someone wants to start an argument, or a off-the-wall challenge.  That's fine if that's what gets the juices flowing for certain individuals, but if I want to add banter to each of my days I can just say something sh*tty to my wife in the morning and start it that way.

I believe, as I have said, that the club business is stagnant, at best.  The lack of sales from every club strongly support this.  I further have said that no sensible person that cares about their cash flow would join a DC at this time based on the unproven economics and the refund models that exist (i.e., 3-1, etc.)  I didn't say that I have the answers, nor do I.  I don't believe "everyone in the world" is an idiot, but I do believe there are plenty of them (I must be to some degree, I spent a small fortune of hard earned money to travel this way).  I do think AK has larger issues than some think, although members today are obviously traveling and apparently significantly happy.  My point to that is that I don't just think by saying "equity model" it solves all the DC problems.  You still need a good number of members paying equitable dues to maintain a club and add new, desirable inventory.  I don't think UE can forever pull rabbits out of a hat, nor do I think ER will crash and burn, but rather maybe look for a graceful exit - and as I have said, their cookie cutter inventory, to me, makes rational and profitable property liquidations look difficult, which in turn doesn't help their ever-increasing redemption list.

I am all for a "member driven" regulatory group, if it has any merit.  But I doubt in private enterprises where compliance isn't required and financials are loosely transparent, at best, that it would have any meaning.  Remembering that certain top executives of all the clubs we discuss here have been officers and / or a part of the prior DCA didn't make it any better or their financials any stronger.

In the end, I think some of the sales tactics that are being used today, even by my own club, are manipulative and deceitful.  Everyone bantered that TH should not have sold from a certain point forward, whenever it was they realized the ship was sinking and couldn't be saved, thus no likelihood of deposit refunds, full (as promised) or partial.  I think there is more than one club in the space today who has a similar problem, and in effect - uncertain of their futures and likely unable to meet their liabilities and obligations, are basically stealing from any new members that join.

That being said, I am open to ongoing, useful conversation about what can be done, if anything, to shore up this industry.  I'm not convinced it can be.  I'm certainly not convinced that anyone would join a 100% loss of deposit model, but it doesn't mean no one would - just that I wouldn't pay to do it.

I've always thought that those with "skin in the game" have more insight, and certainly more to lose.  Many of us have "lost" it all, to some degree.  That doesn't mean that outsiders (non-members, for lack of a better word) can't provide useful and helpful insight.  But if it's just of the agitative nature, I don't understand the purpose.  Anyone can cut and paste old financial data from club documents.  What I have found, being a member for a long time, is that most of it was BS to start with, full of numerous omissions and misrepresentations, overstatements, etc.  Therefore, I don't understand their relevance today and how it affects pretty much anything going forward, other than proving that people lie, continually.

So banter on, challenge, do whatever makes yourself happy.  I am happy to respond or communicate via this manner on useful, thought provoking topics, but not rants.

Just my two-cents for the day...


----------



## travelguy

PerryM said:


> Well. does that include me too?



Includes you as "skeptic" yes, "impartial" ... not so much.


----------



## PerryM

travelguy said:


> Includes you as "skeptic" yes, "impartial" ... not so much.



4+ years ago I stumbled upon High Country Club on this very website.  I was excited and spread the word for a few days and then dug into the company.  I warned folks that the "numbers didn't make sense" within days and began my warning in general that the DC industry was a "house of cards" and would implode.

The rest is history - I was the lone voice shouting the insanity of the DC industry back then, sounds like I'm still alone now.

Since then many DCs have come and gone and what's left is a remnant of the heyday years of 2005 - 2007.

My forecast has been and remains the crumbling of the DC industry - better to just create a new "vision" and hawk that.  I just can't believe those folks with $400k of "pocket change" want to be associated with a failed concept - the Destination Club.

But I like the idea of a DC, have taken the time to give a business plan away on PerryM.com on how to build the successor to DCs that are 100% equity, and 100% transparent.

Those of you here can ignore me but time will show me to be correct - DCs are dead.

Start over guys, convince your existing DCs to become 100% equity and 100% transparency and call it anything but a DC - anything would be fine.

Those that don't will notice the stench of rotting DCs becoming unbearable to everyone over the next year or so.

But, I'm just one guy with an opinion - take it for what you paid for it.


----------



## ClubsRDead

PerryM said:


> The rest is history - I was the lone voice shouting the insanity of the DC industry back then, sounds like I'm still alone now.
> 
> 
> Those of you here can ignore me but time will show me to be correct - DCs are dead.



I don't think you're alone in this.  In fact, I haven't read much of your stuff and did just briefly look at your DC Plan.  Interesting and intuitive.


----------



## Kagehitokiri2

http://destinationclubnews.com/News_Exclusive_Resorts_Seeks_To_Expand_Awareness_In_Latin_America.php

AK has an office in harrods


----------



## TarheelTraveler

New Susan Kime article discussing changes in luxury consumption and mentions ER and A&K:

http://www.luxist.com/2010/03/23/from-conspicuous-to-conscious-consumption-redesigning-the-meani/

"There are some companies -- both in vacation and in retail areas -- that get this, and have changed their marketing and sales messaging to reflect this growing awareness – one that has done this exceptionally well is Exclusive Resorts, the largest and best- known Destination Club now in existence, with -- as mentioned in an earlier Luxist column ----a 2B Real estate portfolio and over 3000 members. Their online and print advertising define luxury, not as acquisition of stuff, but through the scarcity, of time. Time with children before they grow up, time with grandparents so children will remember, time that can be crafted into significant memories. These ideas define new meanings of luxury, especially from a human development perspective.

Abercrombie & Kent Residence Club, a dimension of the famed tour operator Abercrombie & Kent, also has the ability to carry their members to places that will create eco -sensitive, educational memories. Other companies, Exquisite Safaris being the major one, takes their clients to areas in Africa where they can come to know the villagers on a personal level, and create a strong understanding of their needs, allowing new forms of philanthropy to ensue."

Geoffrey Kent CEO CNBC interview about an uptick in travel:

http://www.cnbc.com/id/15840232?play=1&video=1443453977

(seems much more optimistic than in this interview from 2009: http://www.cnbc.com/id/15840232?video=1130799726&play=1)

SmartMoney article on timeshares, fractionals and destination clubs:

http://www.smartmoney.com/Spending/Travel/Vacation-Homes-For-One-Buck/

Ritz-Carlton Destination Club and Annika Sorenstam announce a partnership:

http://www.marketwire.com/press-rel...orenstam-Announce-New-Partnership-1136494.htm


----------



## PerryM

*Every strip mall has one....*

From Smart Money:

"Destination Clubs

For Steve Safigan, the reasons for choosing a destination club over other partial-ownership options were clear: His family could visit a range of destinations and have entire luxury homes to themselves — and an army of concierges at their beck and call. But after the Rome, Ga.*based retiree signed up for a trial membership with High Country Club, it liquidated under Chapter 7 bankruptcy last year, taking his $20,000 membership deposit with it.

Safigan is far from the only destination-club survivor with a tale of financial woe. These clubs — which, for a $200,000 to $300,000 membership, plus annual dues, allow members to stay in any one of a collection of multimillion-dollar homes — have a short but checkered history. Tanner & Haley, the club credited with creating the industry, left more than 800 members as unsecured creditors when it filed for Chapter 11 in 2006, and several smaller bankruptcies followed. Critics claim the club model encourages companies to become overleveraged while providing members with little security.

But while many destination clubs continue to struggle, recent changes suggest the industry may be addressing some of its problems. Clubs like Equity Estates and Abercrombie & Kent Residence Club use an equity model, in which members own the club's actual property and management must conform to strict debt limits. The Ritz-Carlton Destination Club now lets members use points to stay in any of the company's network of fractional or hotel properties. Financial transparency, too, is improving; last year, Ultimate Escapes created a member board of advisers, which is privy to many of the company's financial records and future plans. And the shift in the industry seems to be making at least a few converts — Safigan says he's now a satisfied member of yet another destination club."

This will dog the DC industry for the rest of time - DC losers.

Who really wants to be associated with being taken to the cleaners?


----------



## Kagehitokiri2

yeah just saw sorenstam mentioned here >
http://destinationclubnews.com/News...rs_With_The_Ritz_Carlton_Destination_Club.php

wonder what the details are... too bad they dont break down their financials more.


----------



## ClubsRDead

Perry,

If a guy only lost $20k in a deposit, he's on the lucky side.

Not sure that I would call UR / UE exactly "transparent."  Being a member, I can tell you that getting data, accurate at that, is like pulling teeth.

I've never noted any real success in these clubs tying their name to a celebrity or sports figure.  We have Doc Rivers, yippee.  We also have some movie director, can't remember his name but after the Oscars UE flooded us with e-mails about them being a member.  Who cares?

In reviewing your DC Model Concept on your site, I have trouble understanding in theory how it's really a destination club?  Appears to me that you've created more of a fractional model (with points based usage) only with no liquidity?  Help me understand.

The allure of your concept of course, which is thereby limiting to the membership base, is that you need to bring an asset.  That is very much akin to the fractional concept moreso than the DC side where people come with some cash, but no assets.

Am I missing something?


----------



## PerryM

*In a nutshell...*



ClubsRDead said:


> Perry,
> 
> If a guy only lost $20k in a deposit, he's on the lucky side.
> 
> Not sure that I would call UR / UE exactly "transparent."  Being a member, I can tell you that getting data, accurate at that, is like pulling teeth.
> 
> I've never noted any real success in these clubs tying their name to a celebrity or sports figure.  We have Doc Rivers, yippee.  We also have some movie director, can't remember his name but after the Oscars UE flooded us with e-mails about them being a member.  Who cares?
> 
> In reviewing your DC Model Concept on your site, I have trouble understanding in theory how it's really a destination club?  Appears to me that you've created more of a fractional model (with points based usage) only with no liquidity?  Help me understand.
> 
> The allure of your concept of course, which is thereby limiting to the membership base, is that you need to bring an asset.  That is very much akin to the fractional concept moreso than the DC side where people come with some cash, but no assets.
> 
> Am I missing something?



Ahhh, just what is a DC?  Fractional usage is the answer.

DCs at the prime of 2007 were the following:

"8 guys get together and buy a rich guy a condo and then pay him rent to use it"  - I said that 4+ years ago.

That model has never made any sense to me - buy someone else (a club) a condo and then pay rent to use it?

A DC should be 100% equity ownership with the founders making their money by putting it together and managing the DC.  DC founders were just too greedy and wanted other folks to pony up money for their ownership and take 0, zero, zip, risk.

My Points DC starts by allowing anyone, you, your neighbor, anyone, to put up money and get Points that then can be sold to anyone else or used themselves.  All deeds are held in a master trust that have NO liens or other attachments except to the Point holders.

The beauty of this approach is that the Point holders run the club - they are the HOA and hire the management team to run the place.  Then the Points can be sold at any point by turning them over to the DC to be interlaced with all Points being sold - no waiting for something to happen - as soon as Points are sold the folks wanting to get out get some money.  Points can be sold on eBay if the owner wants.

100% transparency, 100% equity ownership and the villas can be bought and sold to meet the needs of the DC.

That's an overview, hope it helped.


----------



## Kagehitokiri2

http://www.elanprc.com/FAQ/



> Owner-Members may also stay at other properties within The Élan Collection on an available, flex-time basis.
> 
> Twice a year, Owner-Members will submit a priority time reservation request for their vacation residence. If they would like to stay at another property within The Élan Collection, they may exchange their guaranteed use rights for flex time. They will also benefit from unlimited additional access whenever space is available in their own residence, as well as the other residences within the portfolio, subject to the policies of The Élan Collection Reservation System.



hmm...


----------



## TarheelTraveler

PerryM said:


> Ahhh, just what is a DC?  Fractional usage is the answer.
> 
> DCs at the prime of 2007 were the following:
> 
> "8 guys get together and buy a rich guy a condo and then pay him rent to use it"  - I said that 4+ years ago.
> 
> That model has never made any sense to me - buy someone else (a club) a condo and then pay rent to use it?
> 
> A DC should be 100% equity ownership with the founders making their money by putting it together and managing the DC.  DC founders were just too greedy and wanted other folks to pony up money for their ownership and take 0, zero, zip, risk.
> 
> My Points DC starts by allowing anyone, you, your neighbor, anyone, to put up money and get Points that then can be sold to anyone else or used themselves.  All deeds are held in a master trust that have NO liens or other attachments except to the Point holders.
> 
> The beauty of this approach is that the Point holders run the club - they are the HOA and hire the management team to run the place.  Then the Points can be sold at any point by turning them over to the DC to be interlaced with all Points being sold - no waiting for something to happen - as soon as Points are sold the folks wanting to get out get some money.  Points can be sold on eBay if the owner wants.
> 
> 100% transparency, 100% equity ownership and the villas can be bought and sold to meet the needs of the DC.
> 
> That's an overview, hope it helped.



Based on your overview, isn't this like the Ritz-Carlton Destination Club, except I am assuming that you are locked in with RC versus being able to hire and fire management (I've never reviewed their legal docs. so I don't know for sure)?

And isn't this similar to the A&K Residence Club, except A&K has a nights based system instead of a points based system?  For example, the members can fire management if desired (although admittedly the contractual periods are pretty long in between votes).

And isn't this like M Private Residences, where the members did fire management and run the club themselves, although again a nights based system instead of a points based system?

There are a number of other clubs as well, but those are the larger ones.


----------



## TarheelTraveler

ClubsRDead said:


> I've never noted any real success in these clubs tying their name to a celebrity or sports figure.  We have Doc Rivers, yippee.  We also have some movie director, can't remember his name but after the Oscars UE flooded us with e-mails about them being a member.  Who cares?



I've never understood this approach, but maybe they've had some marketing success with it given the number of clubs with sports figure tie-ins (ER, UE, Hideaways, and now RC).  I could see people wanting to be a member of a country club, because maybe you could spend some time on the golf course or in the club with these folks.  But with a DC, it's not like you're spending time with other members, other than for the few clubs that have annual meetings or large member events, and even then, I suspect those people aren't showing up unless they're getting paid or received a free membership.  Maybe it gives people some comfort in making their decision to join a club (never mind the fact that sports figures particularly have made terrible business decisions traditionally).  Or maybe it's so you can tell your neighbor that hey I'm in the same club as such and such and people get some satisfaction in that.


----------



## PerryM

*NO!*



TarheelTraveler said:


> Based on your overview, isn't this like the Ritz-Carlton Destination Club, except I am assuming that you are locked in with RC versus being able to hire and fire management (I've never reviewed their legal docs. so I don't know for sure)?
> 
> And isn't this similar to the A&K Residence Club, except A&K has a nights based system instead of a points based system?  For example, the members can fire management if desired (although admittedly the contractual periods are pretty long in between votes).
> 
> And isn't this like M Private Residences, where the members did fire management and run the club themselves, although again a nights based system instead of a points based system?
> 
> There are a number of other clubs as well, but those are the larger ones.



NO!

Mine is a DC co-op where the management team takes its orders from the owners and not the other way around!

Also, mine has ownership attached to each point from the instant it is created throughout its lifespan until the villa is sold and money returned to the owners.

DCs still believe that risk is to be shared by members and management gets fat dumb and happy.  My approach has management in its place - making a nice salary for 40 hours of work a week.

The DC industry tried the "management is the king" approach and it doesn't work.  Now its time to try "The owners are the king" approach.

My approach blurs the distinction of "the club" and "the member" - they are one in the same.  Under my approach anyone can become an investor/owner and profit from real estate appreciation not the fat cat founders who want to keep everything a secret.

I believe my approach, or something like it, is the future for DCs - the old way of fast talking con-men just isn't a viable approach to DCs.


----------



## AKTHUE

*Management is King*



PerryM said:


> Mine is a DC co-op where the management team takes its orders from the owners and not the other way around!
> 
> DCs still believe that risk is to be shared by members and management gets fat dumb and happy.  My approach has management in its place - making a nice salary for 40 hours of work a week.
> 
> The DC industry tried the "management is the king" approach and it doesn't work.  Now its time to try "The owners are the king" approach.



Guys like Rob McGrath, Christian Kirschner and Jim Tousignant certainly behave like they are royalty, pay themselves extremely well, and have absolute control over how all the money collected from the members is spent.


----------



## Kagehitokiri2

TarheelTraveler said:


> There are a number of other clubs as well, but those are the larger ones.



dont think RC fractionals _really_ count because there is no deposit into DC from them, and they can only exchange up to 2 weeks into DC points. btw have we heard how that works? dont recall.

AK and m have ~150 members. 
hideaways has ~125 members.
luxus, rocksure, EE have ~100 members.

re celebrities, the only real aspect i see is when you have enclaves. 





> I met a new ER member on my last vacation at Grand Cayman...He never would have expected that his teenage kids would be playing with Miley Cyrus on vacation and take photos with her, race her in a golf cart and have bragging rights when they get back home.


 (i put this under heading of "access" i mentioned earlier.)


----------



## TarheelTraveler

PerryM said:


> NO!
> 
> Mine is a DC co-op where the management team takes its orders from the owners and not the other way around!
> 
> Also, mine has ownership attached to each point from the instant it is created throughout its lifespan until the villa is sold and money returned to the owners.
> 
> DCs still believe that risk is to be shared by members and management gets fat dumb and happy.  My approach has management in its place - making a nice salary for 40 hours of work a week.
> 
> The DC industry tried the "management is the king" approach and it doesn't work.  Now its time to try "The owners are the king" approach.
> 
> My approach blurs the distinction of "the club" and "the member" - they are one in the same.  Under my approach anyone can become an investor/owner and profit from real estate appreciation not the fat cat founders who want to keep everything a secret.
> 
> I believe my approach, or something like it, is the future for DCs - the old way of fast talking con-men just isn't a viable approach to DCs.



OK, so I still don't see the distinction, despite these emphatic comments.

As I mentioned, from what I understand, the members of M Private Residences run the club after they fired the management.  Wouldn't this be an example of "where the management team takes its orders from the owners?"  Isn't the club [M] and the members one and the same?  Furthermore, since the members own the club which owns the real estate, that means they would also benefit from the appreciation (rather than some separate owners), right?

While not quite the same, the A&K example is not that far off either.  While A&K RC has a management contract with A&K, they've got the right to fire A&K, so is that so different either?  They do a great job, but if they didn't, why wouldn't the members fire them?

I can't compare RC's DC, as I don't know enough about the legal structure, but maybe you do.

Don't get me wrong.  I've never been a defender of the non-equity DC, despite catching massive amounts of flak about it up until recently when it became publicly clear what had been going on.  Furthermore, I've agreed with you, PerryM, on those related issues both here and on DC4MS, but let's not stereotype every DC and every DC's structure as one and the same.  It's like me saying every timeshare company is a scam, run by a bunch of crooks, treat their owners lousily, pay themselves too much money for running them, etc.  While it'd be easy for me to throw that around, it wouldn't be true as to the entire industry.


----------



## Kagehitokiri2

AK discount ends mar 31 http://destinationclubnews.com/News...esidence_Club_Wraps_Up_Discounted_Pricing.php


> we have done approximately the same number of two year trial memberships and equity memberships during the first two months of 2010 as in all of 2009


...

rocksure's first 2 funds only had 6 properties each
their 3rd capital fund will have 10 properties 

luxus is planning 30 properties

hideaways seems to be planning 100 properties  
i believe FAQ has been updated >


> The Property Company does have some borrowings but the borrowings are only negotiated effectively to purchase properties ahead of Members joining, which of course the existing Members benefit from in terms of usage and asset growth. When all the shares are sold, the Property Company will be debt free. At the end of 2008 the financial statements, audited by Deloittes, showed that the Property Company was 80% equity financed.
> ...
> 90% of a Member’s subscription goes into the property Fund and is used to acquire properties. The remaining *10%* goes into the Club to cover the costs of sourcing, negotiating and preparing the Fund’s properties for use and of course the set up costs for the Fund.
> ...
> When a Member joins they pay a placement fee, *£10k* at the time of writing, which covers the costs of sales and marketing in the Club. This includes any introductory commissions to our partners, the cost of PR and advertising, sales team commissions and any other marketing costs. It is *included* in the cost of membership...The placement fee is only payable once, when you first join the Club.


10% - 10K 
122,500 > 12,250 - 10,000 (8.2%) = £2,250 (1.8%) (new plan i think?)
160,000 > 16,000 - 10,000 (6.3%) = £6,000 (3.7%) 
235,000 > 23,500 - 10,000 (4.3%) = £13,500 (5.7%)


> Tax efficient. Ability to use offshore monies, buy through companies or trusts. Can be used for inheritance tax planning. Consult your financial advisor.


is this just because theyre referring to it as an investment?

...

EE is planning 30-35 owned and 13-15 leased, for total of 43-50

...

AK


> 72.5% to the capital account for purchasing Club assets
> 12.5% for membership sales and marketing expenses
> 5% for general and administrative expenses
> 10% return or profit to A&K manager



luxus


> over 91% of the investment goes towards the capital account and buys the homes and furnishings



EE allocates 20% to sales/etc


> 20% of new capital contributions are specified for use to help grow the fund, aka as being allocated to the “Operating Account”. The previous reference to “growing fund participation, office space, accounting, salaries, etc” addresses “growing the fund participation”—more specifically I was referring to the administrative and other costs related to supporting investor relations professionals like myself. We watch our expenses very carefully. When we travel for business development purposes, conduct events, utilize office space at headquarters and the related overhead thereto, it is paid from this Operating Account.



m


> 93% of new members' deposits goes towards the purchase of new properties



AFAIK weve only seen AK dues breakdown. that was enough for me to compare with EE. both of these were not THAT different >
1. (AK minus management minus reserve) vs EE
2. (AK minus reserve) vs (EE plus upcoming management)
earlier i mentioned specific numbers re EE's upcoming management fee, as well as max debt costs.


----------



## PerryM

TarheelTraveler said:


> OK, so I still don't see the distinction, despite these emphatic comments.
> 
> As I mentioned, from what I understand, the members of M Private Residences run the club after they fired the management.  Wouldn't this be an example of "where the management team takes its orders from the owners?"  Isn't the club [M] and the members one and the same?  Furthermore, since the members own the club which owns the real estate, that means they would also benefit from the appreciation (rather than some separate owners), right?
> 
> While not quite the same, the A&K example is not that far off either.  While A&K RC has a management contract with A&K, they've got the right to fire A&K, so is that so different either?  They do a great job, but if they didn't, why wouldn't the members fire them?
> 
> I can't compare RC's DC, as I don't know enough about the legal structure, but maybe you do.
> 
> Don't get me wrong.  I've never been a defender of the non-equity DC, despite catching massive amounts of flak about it up until recently when it became publicly clear what had been going on.  Furthermore, I've agreed with you, PerryM, on those related issues both here and on DC4MS, but let's not stereotype every DC and every DC's structure as one and the same.  It's like me saying every timeshare company is a scam, run by a bunch of crooks, treat their owners lousily, pay themselves too much money for running them, etc.  While it'd be easy for me to throw that around, it wouldn't be true as to the entire industry.



Any of these existing DCs allow their members to sell their membership on eBay for a price they are willing to accept?

Well mine does...

Mine has no stupid rule of "3 new sales before an existing member may exit" - anyone believing that the existing DCs are close to mine just don't want to face reality - the existing DCs are a house of cards waiting for that last bump to crumble.


----------



## TarheelTraveler

PerryM said:


> Any of these existing DCs allow their members to sell their membership on eBay for a price they are willing to accept?
> 
> Well mine does...
> 
> Mine has no stupid rule of "3 new sales before an existing member may exit" - anyone believing that the existing DCs are close to mine just don't want to face reality - the existing DCs are a house of cards waiting for that last bump to crumble.



M does allow private resales currently.  I assume RC does as well, based on prior offerings and EBay postings that people put on DC4MS.

Not sure if A&K allows private resales, but management switched to a 1 in: 1 out (versus the 3 in: 1 out rule that you cite).  I assume (but could be wrong) that if you brought your buyer, you could sell to that buyer.

I actually both agree and disagree that the 3 in: 1 out rule is stupid.  If I was a member wanting liquidity and the ability to get out, I'd want a 1 in: 1 out rule.  If I'm a member staying on with a club, I'd prefer that a club had 3 in: 1 out rule, so that the club could continue to grow and continually add houses and locations.  I guess my overall preference is that in economic times like this, you need a 1 in: 1 out to give people liquidity, but normally, I might prefer a 3 in: 1 out.


----------



## Kagehitokiri2

luxus is 2:1 right now.
AK is 1:1 for everyone now? nice. (temporarily)

...

luxus / rocksure - barebones

hideaways - little to no debt, 2 DC partnerships 

AK - 5% debt cap, few leases, fewer hotels, AK partnership

m private residences - high debt cap (leases = ?)

EE - high debt cap, leases, 1 DC partnership


----------



## PerryM

*Dinosaurs at warp speed..*



TarheelTraveler said:


> M does allow private resales currently.  I assume RC does as well, based on prior offerings and EBay postings that people put on DC4MS.
> 
> Not sure if A&K allows private resales, but management switched to a 1 in: 1 out (versus the 3 in: 1 out rule that you cite).  I assume (but could be wrong) that if you brought your buyer, you could sell to that buyer.
> 
> I actually both agree and disagree that the 3 in: 1 out rule is stupid.  If I was a member wanting liquidity and the ability to get out, I'd want a 1 in: 1 out rule.  If I'm a member staying on with a club, I'd prefer that a club had 3 in: 1 out rule, so that the club could continue to grow and continually add houses and locations.  I guess my overall preference is that in economic times like this, you need a 1 in: 1 out to give people liquidity, but normally, I might prefer a 3 in: 1 out.



Is there a handy-dandy chart of this for ALL DC's out there?

With a Points DC ALL members who want to sell their memberships immediately start to get a check as Points are sold.

e.g.
I own 20,000 Points which I paid $10 for a few years ago and a divorce court requires immediate selling of 10,000 Points.  

5 other members need to sell Points too and so does the DC.

1 Point sells for $7 now (after decrease of the value of the yearly appraisal).

Another member want's to buy 7,000 more Points.

Out of those 7,000 Points I get to liquidate 1,000 Points (7 of us selling at the same time)  and a check is cut for $7,000 to me minus a small processing fee.  The other 5 members get $7,000 checks too as does the DC.

This is instant liquidation of memberships as each new sale is made.

I put the remaining 6,000 Points up on eBay and sell 4,000 at $5 each or $20,000 in my pocket and have 2,000 that the DC can still sell.

This is but one example of the dinosaur DC concepts used now and what could be used if the members wanted a change into the 21st century.


----------



## NeilGoBlue

Kagehitokiri2 said:


> luxus is 2:1 right now.
> AK is 1:1 for everyone now? nice.



To be straight...it's only temporary.. i'm hoping it will be permanent... but not sure..

I think all clubs should go to it.. it solves the members concerns and solves the 'run on the bank' concern that management has...


----------



## TarheelTraveler

NeilGoBlue said:


> To be straight...it's only temporary.. i'm hoping it will be permanent... but not sure..
> 
> I think all clubs should go to it.. it solves the members concerns and solves the 'run on the bank' concern that management has...



It'll be interesting to see if it stays that way.  I know the idea was to keep the resignation list at 0 or close to it.

Frankly, I think the reason a lot of clubs haven't gone to that arrangement is they need the cash flow from existing members (i.e., can't afford to let them out) and need the money from new deposits (i.e., don't want to pay all of the new deposits out to the resigning members).  This is particularly the case with clubs that have no guidelines on what can be done with new deposits.  I have no way of knowing this, but I'm cynical enough now to believe it.


----------



## Kagehitokiri2

which could be avoided by allowing members to sell DIRECTLY. which im not sure DHH did, thinking back. or m private residences...?

(hideaways club seems clear that when you find a buyer, that buyer is going to pay the current price, and you simply avoid the 5% "marketing" fee.)

and if you allow that, you could make it nonrefundable as well. that forces people to resell themselves though, while not ensuring members are committed.

thinking about it, if *PerryM* etc want ability to resell directly, it either has to be nonrefundable in that event, or nonrefundable all the time. DHH still gave you 80% current, so that must mean that the new person coming in was paying the current price..

thats how it is with RC DC. fractionals/home = deeded. portfolio = "deeded." and neither is refundable. you have to sell yourself, and RC has ROFR. 

speaking of which, how does gaming ROFR work? marriott does it for timeshares, so im sure its the exact same setup for RC DC.

***

of course OTOH most of the clubs with caps (not sure if that includes Q) go to 1:1 when full. and lusso even had a time guarantee when full. (18 months or something?)


----------



## SciFrog

Q is 3:1 but they reset the resignation list for new members... *If* they enforce the cap, it will be 1:1, the club if way over halfway mark to be capped (800 full Q5 members or 1,000 member, whichever comes first).


----------



## Kagehitokiri2

SciFrog said:


> Q is 3:1 but they reset the resignation list for new members... *If* they enforce the cap, it will be 1:1, the club if way over halfway mark to be capped (800 full Q5 members or 1,000 member, whichever comes first).



seem to recall another club talking about resetting resignation list for new members as well.

interesting from sherpa >
http://www.sherpareport.com/destination-clubs/3-largest-destination-clubs-20310.html.html


> Quintess sells memberships equivalent to 225 nights per homes


that would be 5 Q6. article also gives holiday pricing for Q2 > Q7.


----------



## TarheelTraveler

PerryM said:


> Is there a handy-dandy chart of this for ALL DC's out there?
> 
> With a Points DC ALL members who want to sell their memberships immediately start to get a check as Points are sold.
> 
> e.g.
> I own 20,000 Points which I paid $10 for a few years ago and a divorce court requires immediate selling of 10,000 Points.
> 
> 5 other members need to sell Points too and so does the DC.
> 
> 1 Point sells for $7 now (after decrease of the value of the yearly appraisal).
> 
> Another member want's to buy 7,000 more Points.
> 
> Out of those 7,000 Points I get to liquidate 1,000 Points (7 of us selling at the same time)  and a check is cut for $7,000 to me minus a small processing fee.  The other 5 members get $7,000 checks too as does the DC.
> 
> This is instant liquidation of memberships as each new sale is made.
> 
> I put the remaining 6,000 Points up on eBay and sell 4,000 at $5 each or $20,000 in my pocket and have 2,000 that the DC can still sell.
> 
> This is but one example of the dinosaur DC concepts used now and what could be used if the members wanted a change into the 21st century.



Now there is finally a difference.  Thanks, PerryM.  Not sure that it is earth-shattering, but it is a difference.  I've heard of membership nights being divided for two incoming buyers, but I've not heard of a membership being sliced and diced that many ways.  Points systems are definitely more complicated, but I guess for the right situation that could come in handy.  I could see that as appealing to some and not for others.


----------



## PerryM

TarheelTraveler said:


> Now there is finally a difference.  Thanks, PerryM.  Not sure that it is earth-shattering, but it is a difference.  I've heard of membership nights being divided for two incoming buyers, but I've not heard of a membership being sliced and diced that many ways.  *Points systems are definitely more complicated, but I guess for the right situation that could come in handy.*  I could see that as appealing to some and not for others.



We all use Points all day long - just open your wallet and you will find Federal Reserve Points - nobody seems to be overwhelmed with Points in commerce.

Timeshares are similar to DCs except a step below.  Disney sells timeshares - they are Points and Disney is the #1 timeshare on the planet.  Even as other timeshares have lost 50% of their worth Disney hangs in there.

DC's were born from the minds of hucksters who had very little background as to how a DC should really be run - Points.


A simple chart, on a website, tells you how many points are needed to reserve a DC villa - lets say you want to visit Maui for 10 days and the total comes up to 10,000 Points - that's what you buy.

If you don't use all your Points this year they roll forward 1 year automatically; you don't lose them.

If you are short some Points you can borrow them from next year's usage.

MFs are charged per Point.

I can sell my unused Point this year to someone else who needs them and make a few bucks.  The website has a place to buy and sell permanent Points and to buy/sell Points from just this year's usage.

It really doesn't get much simpler than that.

The more "management" keeps out of things the more the owners control their own destiny at the DC.

Reservations are done via a website too - no human needed to answer a phone call - just a calendar which shows the number of Points needed to reserve a day at each villa and a mouse click to make the reservation.

Keys are old news - each villa has the Kaba lock and a 6-digit number opens the door and only during the reservation stay.  http://www.kabakeylesslocks.com/keyless-entry/products/oracode-660k.aspx  I use this on our rental units and my renters just love it - no keycard to lose no keycard to get demagnetized if you put it in your pocket with your cell phone.

There is so much the DC industry could do if they just grew up....


----------



## Kagehitokiri2

i think *PerryM* is bring up concepts from disney / worldmark. IIRC disney had ROFR as well. and both also had renting of points.

i think this was my best re points vs nights >


> points are better for people who want more travel time - lower season, cheaper accommodation, or both.
> 
> no points are better for people who want more expensive stuff - holidays, expensive accommodation, or both.


used to say points meant you couldnt do unlimited free, but there is no reason you couldnt have unlimited free short term space available. now, long term space available, not sure about that..

most DCs with points have a set average property price. but points / quasi-points allow a scale of pricing levels. which is again a trade off between those who want more time vs more expensive.


----------



## PerryM

*In a nutshell*



Kagehitokiri2 said:


> i think *PerryM* is bring up concepts from disney / worldmark. IIRC disney had ROFR as well. and both also had renting of points.
> 
> i think this was my best re points vs nights >
> 
> used to say points meant you couldnt do unlimited free, but there is no reason you couldnt have unlimited free short term space available. now, long term space available, not sure about that..
> 
> most DCs with points have a set average property price. but points / quasi-points allow a scale of pricing levels. which is again a trade off between those who want more time vs more expensive.




Points are sold based upon the total worth of the DC's deeds - an annual appraisal is simple to do.  Let's say 25 villas average $4M each or $100M. This is a large number so lets say 1 Point is worth $10 equity or 10,000,000 Points are generated.

If we use 10 members per villa that means each member should buy 40,000 Points for 4 weeks of usage leaving 12 weeks unused (52-40) which allow for cleaning and slack for operations.

Lets say that each villa's rent averages $7,000 per week with holiday rent $14,000 and mud season $1,000 per week.  $7,000 * 4 weeks = $28,000 which must be used by the 40,000 Points or each Point is worth 70 cents of rent.

The rent, per day, is easy to determine and calendars are created with the number of Points per day per villa.  e.g. New Year's week at a ski resort is 14,000 Points or 2,000 per day so a 10 day vacation is 20,000 Points.

Reservations open 6 months before the beginning of a month so December reservations open July 1.  During the month of July ANY member can request any number of days in December (and overflowing into Jan).  On August 1 the computer takes Points away and issues reservations.

If more than 1 member wants the same reservation and eMail is sent to all members wanting the reservation stating that they must submit a sealed bid in addition to the normal Points - the highest bid wins and in the case of a tie the computer randomly picks a winner.  (There are a few more subtle rules which I won't bore you with)

Those members who did not win get their Points back PLUS split the Premium Bid the winner put up as a consolation prize.  Those pro-rated Points can be used anyway the member wants, next holiday they have more points for their premium bid.

That's how holidays are settled - the Capitalistic way with Points.

Granted this is more complicated than simply clicking a mouse - a judgment must be made as to how much a reservation is worth to the member.  

Anyway that's my simple DC in a nutshell - can be totally explained on 1 piece of paper.  100% transparent, 100% equity, 100% Points oriented.


----------



## TarheelTraveler

*Different strokes for different folks. It's that simple.  There is not one best answer for everyone.*

Kage's summary:

 points are better for people who want more travel time - lower season, cheaper accommodation, or both.

no points are better for people who want more expensive stuff - holidays, expensive accommodation, or both. 

is still the best explanation of the debate of points vs. nights.  Better for some and worse for others.

The beauty of a DC with nights is you simply go online and book it.  I don't need to worry about spending more of my points to book this or that or having to bid the most points to get this or that.

While some would relish the idea of being able to get a "great deal" to spend a lot less points (money) on a ski location during the mud season, I would be annoyed about having to pay quadruple points for taking my family to the Turks and Caicos for Spring Break.  That transforms the beautiful travel simplicity of booking in minutes to hours.

As I've said on DC4MS, I've been in both systems and for me personally after having experienced the nights system, I've changed my opinion and prefer the nights system.  Crescendo was a relatively simple points based system.  1/2 points for low season, regular points for high season, double or triple points for holidays depending on the holiday.  Invariably, I never wanted to spend double or triple points to get a holiday, and I didn't want to spend mud season in a ski resort no matter how cheap it was, so we just did high season non-holiday travel.  With a nights based system now, I actually get at least one or two holidays every year, which is great when you have school aged children.

Of course, if you were a CR member with lots of money to burn on holidays or wanted double the nights to travel off season, you'd prefer sticking with the points system.

Just shoot me if I had to go through the RC DC analysis of booking a vacation, with points varying depending on location, number of bedrooms, holiday or non-holiday, higher some days and lower other days, demand, etc.  I remember there being multiple threads of people saying that system is just ridiculously complicated at DC4MS.

Nonetheless, I can see why PerryM would love that system as someone with kids out of the house, lots of free time to travel, the ability to travel not around the holidays, and lots of time to book travel.

I can also see the merits of a points based system for timeshares, because every week or close to every week is sold with a timeshare, unlike 65-70% with a DC.  With the tight availability of timeshares and the varying levels of accomodations, and if you want the flexibility to vary from "your week," a points system seems like a necessity.


----------



## PerryM

*DC - just get out of the way...*



TarheelTraveler said:


> *Different strokes for different folks. It's that simple.  There is not one best answer for everyone.*
> 
> Kage's summary:
> 
> points are better for people who want more travel time - lower season, cheaper accommodation, or both.
> 
> no points are better for people who want more expensive stuff - holidays, expensive accommodation, or both.
> 
> is still the best explanation of the debate of points vs. nights.  Better for some and worse for others.
> 
> The beauty of a DC with nights is you simply go online and book it.  I don't need to worry about spending more of my points to book this or that or having to bid the most points to get this or that.
> 
> While some would relish the idea of being able to get a "great deal" to spend a lot less points (money) on a ski location during the mud season, I would be annoyed about having to pay quadruple points for taking my family to the Turks and Caicos for Spring Break.  That transforms the beautiful travel simplicity of booking in minutes to hours.
> 
> As I've said on DC4MS, I've been in both systems and for me personally after having experienced the nights system, I've changed my opinion and prefer the nights system.  Crescendo was a relatively simple points based system.  1/2 points for low season, regular points for high season, double or triple points for holidays depending on the holiday.  Invariably, I never wanted to spend double or triple points to get a holiday, and I didn't want to spend mud season in a ski resort no matter how cheap it was, so we just did high season non-holiday travel.  With a nights based system now, I actually get at least one or two holidays every year, which is great when you have school aged children.
> 
> Of course, if you were a CR member with lots of money to burn on holidays or wanted double the nights to travel off season, you'd prefer sticking with the points system.
> 
> Just shoot me if I had to go through the RC DC analysis of booking a vacation, with points varying depending on location, number of bedrooms, holiday or non-holiday, higher some days and lower other days, demand, etc.  I remember there being multiple threads of people saying that system is just ridiculously complicated at DC4MS.
> 
> Nonetheless, I can see why PerryM would love that system as someone with kids out of the house, lots of free time to travel, the ability to travel not around the holidays, and lots of time to book travel.
> 
> I can also see the merits of a points based system for timeshares, because every week or close to every week is sold with a timeshare, unlike 65-70% with a DC.  With the tight availability of timeshares and the varying levels of accomodations, and if you want the flexibility to vary from "your week," a points system seems like a necessity.



What makes my DC the most "fair" system anywhere is that the members and management have no say as to what things are "worth".

When a new villa is to be added the number of points is not arbitrary - the market tells everyone what its worth.  E.g. a new villa is to be bought and can be purchased for $5 M and the total of the existing villas is $100 M (from an appraisal) with 10,000,000 million points thus each Point is worth $10 or the new villa generates 500,000 Points.

Same with reservations - rental rates gotten from an outside source determine how much each day is worth in Points.  The members simply open their wallets (actually account on the DC's web page) and go shopping.

There really is no such thing as "holidays" to worry about - whenever 2 or more requested reservations overlap (for any day) the computer awards the member who spent the most Points their reservation - ties require either a Premium bid or the computer just randomly picking a winner.

Net net - the more "management" keeps out of the members way the better the system runs.  (Don't you wish that were true of a lot of things?)ir


----------



## Kagehitokiri2

its not about fair, its about value.

for holidays, if you can occasionally get one of the resorts i mentioned earlier, youre getting *insane* value. when i gave values for trial, they were high season. when i gave values for club in general, they included XMAS/NYE as well. > http://tugbbs.com/forums/showpost.php?p=880648&postcount=129 and re access in terms of holidays - at raffles canouan and banyan tree seychelles, base room rates are $1,500 over XMAS/NYE. at RC grand cayman over XMAS/NYE, base room rates are $1,200 and 3BR resort view is $6,750. (ER has 4BR pool villas.) there are also often min stays - la samanna is 10 nts.

thinking about when properties are same value, points would most likely lead to "over utilization" of shoulder season. everyone would want the discount outside low season. only people with limited use would just stick with their primary choices.

i dont recall if this issue has been brought up in the context of nights vs points, but it seems to me that point values can be more easily changed. with nights its purely a matter of dues.

when you look at the hideousness that is RCDC points system, you can see the potential for overcomplexity, poor value, and subsidies that will likely result in huge dues increases much sooner than any of the other DC increases occurred. 

re ER


Kagehitokiri2 said:


> 3259 members
> one third empty nesters


----------



## TarheelTraveler

http://www.realestatechannel.com/in...tate-bubble-monaco-real-estate-sales-2255.php

"...Last year global prices for luxury housing fell by an average 5.5%, while prices for leisure properties decreased by 13.9%. In contrast, prices for urban real estate, in 2009 even increased - by 0.4%.

Prices for luxury housing decreased in 75% of the 56 regions included in the international price index of Knight Frank. The most intensive drops observed in Dubai (-45%) and Dublin (-25%), while the fall in the "traditional luxury regions" such as Paris and Monaco amounted to - 15%. Prices for the Caribbean elite property decreased by10%, while Courchevel - 12.4%.

Surprisingly, by the Asian region was not affected by the crisis: prices for luxury real estate in Shanghai has spiked 52%, in Beijing - 47%, while in Hong Kong - by 40.5%...."


----------



## Kagehitokiri2

removed...


----------



## Chicagomark

*Don't think that article applies to US DC's....*

Dubai, Dublin, Paris, & Monaco? Huh? NYC, Chicago, La Jolla, Sonoma, Tuscon, Scottsdale, Naples aren't down 15% to 50%.......


----------



## PerryM

Kagehitokiri2 said:


> its not about fair, its about value.
> 
> for holidays, if you can occasionally get one of the resorts i mentioned earlier, youre getting *insane* value. when i gave values for trial, they were high season. when i gave values for club in general, they included XMAS/NYE as well. > http://tugbbs.com/forums/showpost.php?p=880648&postcount=129 and re access in terms of holidays - at raffles canouan and banyan tree seychelles, base room rates are $1,500 over XMAS/NYE. at RC grand cayman over XMAS/NYE, base room rates are $1,200 and 3BR resort view is $6,750. (ER has 4BR pool villas.) there are also often min stays - la samanna is 10 nts.
> 
> thinking about when properties are same value, points would most likely lead to "over utilization" of shoulder season. everyone would want the discount outside low season. only people with limited use would just stick with their primary choices.
> 
> i dont recall if this issue has been brought up in the context of nights vs points, but it seems to me that point values can be more easily changed. with nights its purely a matter of dues.
> 
> when you look at the hideousness that is RCDC points system, you can see the potential for overcomplexity, poor value, and subsidies that will likely result in huge dues increases much sooner than any of the other DC increases occurred.
> 
> re ER



DC's should be simply a way to equitably offer vacation ownership to their members and fair usage.

Replace my Point with a $ and you have exactly the same system - they are interchangeable.  I know of no DC that does that now.

It would be a TRUE replacement for a number of second homes.  

Usage is key here - there is NO more fair method of valuing each day than what folks pay for rental rates for similar lodging.  New Year's day is going to rent for a lot more than Halloween at a ski resort.  Points simply defers what any day of the year to a 3rd party - a renter's desire to pay cash to rent something similar.

I don't know who cooks up what New Year's eve and day are worth in the existing DCs - probably a slick salesrep who has no idea what they are talking about is my guess.

Who decides the rules for holidays at all these DCs?  My system doesn't pretend to be that smart and simply allows members to use Points to decide who get's what.

My system is based 100% on Capitalism where Points decide everything, and management should be busy arranging toilets to be cleaned and good service to the owners.

Who knows, maybe the successor to the DC will take up some of my ideas since I don't see the current DCs ever getting free from the quagmire they are now in.

But don't get me wrong, if you like your DC I'm happy for you.  I just don't see DCs ever cloning themselves in the future.  All those folks with $400k of "Pocket Change" are rethinking what to do with that pocket change.


----------



## TarheelTraveler

PerryM said:


> Replace my Point with a $ and you have exactly the same system - they are interchangeable.  I know of no DC that does that now..



I thought Ritz-Carlton was exactly the type of point system that you propose.



PerryM said:


> Who decides the rules for holidays at all these DCs?  My system doesn't pretend to be that smart and simply allows members to use Points to decide who get's what.



I think ER has fastest finger, but most have some sort of holiday drawing.  In ours, we rank the holiday and house in lottery.  It works shockingly well.  IIRC, I think UE has a very sophisticated holiday drawing system that takes into account past success.  Quintess has a drawing system similar to A&K again IIRC.  The lottery systems all seem to be fair and equitable.

Again, personally I don't want to compete with other members to see how much money I can shell out for that Spring Break in the Turks and Caicos.  I understand that bidding your points is capitalism at its finest, but I'm trying to get great accomodations at a reasonable price, not outbid the guy who flies everywhere in his private jet and could care less about what he is paying.


----------



## Kagehitokiri2

*PerryM*, im giving hotel rates for hotel villas...

*TarheelTraveler*, AFAIK *PerryM* is discussing a "normal" seasonal points sytem. RCDC's is just plain ****ed. 365 values per accommodation.

*Chicagomark*, of those probably only la jolla did ok the whole time. my problem with the quote highlighted by *TarheelTraveler* is that 99% of the time "luxury" is defined way too broadly.


----------



## PerryM

TarheelTraveler said:


> I thought Ritz-Carlton was exactly the type of point system that you propose.
> 
> 
> 
> I think ER has fastest finger, but most have some sort of holiday drawing.  In ours, we rank the holiday and house in lottery.  It works shockingly well.  IIRC, I think UE has a very sophisticated holiday drawing system that takes into account past success.  Quintess has a drawing system similar to A&K again IIRC.  The lottery systems all seem to be fair and equitable.
> 
> Again, personally I don't want to compete with other members to see how much money I can shell out for that Spring Break in the Turks and Caicos.  I understand that bidding your points is capitalism at its finest, but I'm trying to get great accomodations at a reasonable price, not outbid the guy who flies everywhere in his private jet and could care less about what he is paying.



When RC initially came out I looked at them and they have a Point system but there were all kinds of problems with it.  I'd have to review them again but I'm not going to since I have no interest in them now.

I will admit that in my system the person who has the most Points has more power - just like in real life with money.  I can't sit up front in the airline unless I fly 1st class - costs more money - I live with it and the money I save I spend on other things.

Rules are created to control people - I'm a free market kind of guy and believe we are all served better with a free market rather than some guy cooking up rules to control us.

In my example the guy who decides to book 15 days at the end of the year to stay at a villa will get that reservation if other members want less days during any day that is over booked.  If that's why he bought enough Points to do this each year well that's what he gets to do each year until someone puts up more Points.

The person putting up the most Points always wins - that's life.

Lotteries or squirrelly rules are a poor substitution to market forces.  Some folks believe its the other way around - I can't change anyone's mind on this topic.


----------



## PerryM

Kagehitokiri2 said:


> *PerryM*, im giving hotel rates for hotel villas...
> 
> *TarheelTraveler*, AFAIK *PerryM* is discussing a "normal" seasonal points sytem. RCDC's is just plain ****ed. 365 values per accommodation.
> 
> *Chicagomark*, of those probably only la jolla did ok the whole time. my problem with the quote highlighted by *TarheelTraveler* is that 99% of the time "luxury" is defined way too broadly.



With my rental units I have 5 rates that cover every day of the year:

Holiday
High season
Middle season
Low season
Firesale

Any DC demanding more than that is insane.


----------



## Kagehitokiri2

yeah, i think its fewer than that for any DCs with points. (excluding RC )

for example >
http://www.thehideawaysclub.com/membership-destination-points.php

DHH (winding down) had quasi points, by varying number of nights required for a week. 

luxus doesnt have it described online.


----------



## SciFrog

Points are horrible and overly complicated for DC. It only works for people like PerryM who want to spend countless hours playing games with the system.

IMHO DC fail miserably on holidays. I want to choose my destinations for holidays... This is why I have a non holiday plan, I do what I want...


----------



## Kagehitokiri2

seems like more info >
http://www.luxist.com/2010/03/24/annika-sorenstam-takes-her-brand-to-the-ritz/

back to old fashioned exchange >
http://www.luxehomeswap.com/


----------



## TarheelTraveler

*Ultimate Escapes/Private Escapes*

Another lawsuit was filed against Private Escapes/Ultimate Escapes/Rich Keith:

http://dockets.justia.com/docket/court-codce/case_no-1:2010cv00685/case_id-118468/

Member had a PE preview membership and says his deposit was not refunded, and was supposedly told PE does not have the money to refund his deposit.  Case is very similar to others.

The only interesting piece IMHO is the email attached as Exhibit 3.  Member asks what the refund procedure is as the documentation is unclear.   PE response is that they crafted the clarifying language after the member joined as the redemption language was not clear.  Says that they'll put the language in their file and member should do the same.  Provides that after 12 months, you can resign, and must be refunded within 90 days of written request.  Does that make it part of the contract?  I would be willing to bet that one of the defenses will be that it is not part of the contract.

Also interesting is it states that the merger is for real this time (acknowledges that member had heard that before), saying merger documents were being signed in two days per email from CEO (April 1, 2008).


----------



## PerryM

SciFrog said:


> Points are horrible and overly complicated for DC. It only works for people like PerryM who want to spend countless hours playing games with the system.
> 
> IMHO DC fail miserably on holidays. I want to choose my destinations for holidays... This is why I have a non holiday plan, I do what I want...



Granted Points are the extreme in flexibility and some folks don't like that - the current crop of DCs are then a viable alternative.

Going to be busy making money for a while - catch you guys later...


----------



## ClubsRDead

TarheelTraveler said:


> Another lawsuit was filed against Private Escapes/Ultimate Escapes/Rich Keith:



While I suspect the money isn't just freely available to make automatic refunds, it's a little insane that someone would actually tell him that.

I didn't note when he joined.

This is indicative of something Keith / PE did frequently, "special redemption rights," ie - get your money back by XX time (I've heard about it being as low as 3-5 days).  These types of clauses were just sales gimmicks to help relieve any angst a potential member might have about the refund process, and was often promised to folks as a way they could bypass the 3-in, 1-out provisions.

Keith copied this dumb idea from McGrath, like many others.


----------



## Desties

ClubsRDead said:


> These types of clauses were just sales gimmicks to help relieve any angst a potential member might have about the refund process, and was often promised to folks as a way they could bypass the 3-in, 1-out provisions.



As someone who first joined PE through the preview membership plan, it was never subject to the 3-to-1 clause. It was just a half-priced plan that offered 14 nights a year with a few restrictions along the way (such as no metropolitan properties). I think mine may have stipulated being paid back in 6 months instead of 3 months, but a year later I simply upgraded to the full membership. It was supposed to be a one-year preview plan, but the prospective member could have simply continue to renew on a year-to-year basis.


----------



## wilkes591

*Did any of the non document signers*

ever get anything out of PE? So basically it was sign the merger docs and become UE or bye bye. I thought about not signing, that would have been a big mistake.


----------



## ClubsRDead

I'm interested as well as to how it turned out for the "non signers?"  UR had the holdouts on the assessment last spring but it turned out well for them in the end.  I've never seen the PE documents but suspect they didn't really have the ability to just take your money and kick you out for not signing, did they?


----------



## wilkes591

I think they are still in the "PE" that "UE" did not acquire. Which would be what, I do not know. There were some properties that did not come over to UE, what happened to them, your guess is as good as mine. They(JT and RK) basically did say good bye, if you did not sign the documents. I guess each PE member that did not sign must litigate and prove that UE has their deposits. I believe in one case UE was removed from a PE member's complaint. Once again throwing good money after bad.  As we all know what is at the end of the road, it is just a question of how long that road is.


----------



## TarheelTraveler

*Ultimate Escapes*

Just as an FYI, UE filed a form extending the period of time to file the financials by 15 days (could not be completed on a timely basis without unreasonable effort or expense due to the business combination in October 2009):

http://www.sec.gov/Archives/edgar/data/1402364/000114420410017115/v179549_nt10k.htm


----------



## UnhappyInCT

TarheelTraveler said:


> Just as an FYI, UE filed a form extending the period of time to file the financials by 15 days (could not be completed on a timely basis without unreasonable effort or expense due to the business combination in October 2009):



Brace yourselves for bad news!


----------



## wilkes591

UnhappyInCT said:


> Brace yourselves for bad news!



What would be the Bad News? Anything new? Or the same old same old, no cash?


----------



## UnhappyInCT

wilkes591 said:


> What would be the Bad News? Anything new? Or the same old same old, no cash?



There is a lot of disclosure required in the 10-K.  In addition to no cash, look for comments about how the lenders are tightening the noose.  Also, look for disclosure as to how many reinstated suspendeds (like me) refused to pay their 2010 dues in December.

Of course, if the delay in filing is due to a dire financial situation then prior to the filing don't be surprised if a gun is put to the heads of the membership for another cash call.


----------



## UnhappyInCT

TarheelTraveler said:


> Just as an FYI, UE filed a form extending the period of time to file the financials by 15 days (could not be completed on a timely basis without unreasonable effort or expense due to the business combination in October 2009):



TT - do you have any idea how they could answer the question in Part IV(3) in the negative?  
_(Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof ?)_

2009 will look nothing like the result from 2008 (which was for Secure America)


----------



## Kagehitokiri2

they did release "full" financials for UE, UR, and then PE.

breakdowns are where it gets trickier. and they could break down even less...


----------



## wilkes591

UnhappyInCT said:


> There is a lot of disclosure required in the 10-K.  In addition to no cash, look for comments about how the lenders are tightening the noose.  Also, look for disclosure as to how many reinstated suspendeds (like me) refused to pay their 2010 dues in December.
> 
> Of course, if the delay in filing is due to a dire financial situation then prior to the filing don't be surprised if a gun is put to the heads of the membership for another cash call.



Does this have anything to due with JT meeting with a private equity firm today?

Can you say Rabbit?


----------



## ClubsRDead

wilkes591 said:


> Does this have anything to due with JT meeting with a private equity firm today?
> 
> Can you say Rabbit?



Who'd he meet with?

And, is there a firm that is so flush right now that they'd pour good money after bad?  Can't see what JT has to offer them at this point, I think his own shares are restricted.


----------



## TarheelTraveler

UnhappyInCT said:


> TT - do you have any idea how they could answer the question in Part IV(3) in the negative?
> _(Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof ?)_
> 
> 2009 will look nothing like the result from 2008 (which was for Secure America)



It does seem like the question would be answered yes for the reasons that you noted, and then perhaps you'd explain that the financial statements for the separate companies were released as part of previous filings as Kage notes and that you don't expect a significant change from those.


----------



## TarheelTraveler

http://www.sherpareport.com/prc/fractional-ragatz-2009.html

"The annual North America survey by Ragatz Associates showed a significant drop of 44% across all shared property types, including fractionals, private residence clubs and destination clubs. 

...

The sales split by property types were:

    Fractional Interests $150m 
    Private Residence Clubs $515m 
    Destination Clubs $195m 

Last year the total sales were $1.525m, with fractional and private residence club sales at $1,176m and destination club sales of $349m.

Despite all these lower sales the research notes the widely held feeling in the resort industry that shared property will rebound faster than whole ownership as the overall economy turns around. The reasons for buying fractional and shared property hasn't changed and include: 


1.personal use rather than investment speculation. 
2.ability to purchase just the amount of time you need, compared to underutilized wholly owned homes. 
3.lowered household spending habits, which match the lower costs of sharing.
4.the hassle free nature, so that owners just show up and enjoy their shared property.
5.the flexibility and variety offered by trading and exchange programs, which let members visit many other locations." 

That's a heck of a drop in sales.  No wonder so many DCs, PRCs and timeshares struggled.  Furthermore, I'm actually a little skeptical that the DC industry sold $195M in memberships last year. Didn't ER go from selling 50-100 memberships a month to about 5-10 or so many months?  I got the impression that type of drop in sales was pretty consistent across the industry.  On top of that, there was a lot more discounting and trial memberships being sold.


----------



## Kagehitokiri2

how do they define sales?

ER and EE numbers >
http://tugbbs.com/forums/showpost.php?p=879619&postcount=112

hideaways >
http://destinationclubnews.com/News_The_Hideaways_Club_Confirms_Price_Increase.php


> "The fund's audited accounts for 2009 will show an increase in the number of shareholders of 85%, up to 120 total members,"


 120 / 1.85 = 65 (so 55 in 2009?)

EE members, is this accurate?
http://www.ibtimes.com/contents/20100402/equity-estates-luxury-residence-fund-worldly-investment.htm


> Annual dues range in price from $9,250 to $24,750 with capital contribution rates ranging from $197,500 to $549,000. With the Executive Membership Interest Plan, members can travel 15 nights per year; the Elite Membership Interest Plan includes 30 nights per year; and with the Advantage Membership Interest Plan, members are afforded 45 nights per year at any of the luxury residences.



http://twitter.com/AKResClub

AK discount extended through june, increase after that still a lot less than original pricing. must annoy people who joined before this... have there been any partial refunds? then again jan/feb 2010 = 2009 sales, and discount started mid december.

http://destinationclubnews.com/News...esidence_Club_Wraps_Up_Discounted_Pricing.php
http://www.fraxfinder.com/blog/Savi...ip-in-the-Abercrombie-Kent-Resident-Club.html
http://www.akresidenceclub.com/#membership-and-equity/membership-levels/chart

interesting/amusing article on frax 
http://www.fraxfinder.com/archives/233-despite-lackluster-sales-fractional-conferences-persist.html


----------



## Kagehitokiri2

Kagehitokiri2 said:


> banyan tree private collection
> 2009 - 23? / $1.3MM



AK >
http://www.sherpareport.com/destination-clubs/a-k-residence-club-member-survey.html


> nearly one third of the members recently upgraded
> 
> we expect many two-year trial members to convert before the deadline
> 
> more than a dozen prospects in the final stages of joining


----------



## TarheelTraveler

Thanks for posting the A&K SherpaReport link, Kage.

I thought the following was also interesting: "In the annual member survey, 97% of the membership reported complete satisfaction with Club offerings and service, including their personal Global Experience Manager and on-site Destination Hosts."  To me, that number is pretty remarkable in the travel industry, where satisfaction rates are often mired in the same range as cable TV providers. 

Other DC stuff I came across today:

Ultimate Escapes has filed an 8-K stating that *241,301 *shares were issued as part of the redemption value conversion program.

http://www.sec.gov/Archives/edgar/data/1402364/000114420410019138/v180507_8k.htm

What's odd is the Form D filed by UE on the same date (http://www.sec.gov/Archives/edgar/data/1402364/000140236410000003/xslFormDX01/primary_doc.xml) states: "Pursuant to the Issuer's redemption value exchange program, the Issuer issued a total of *1,128,806 *shares of its common stock to certain of its club members who elected to convert all or portion of their redemption value into shares of common stock."

131 investors invested in offering per this form.

http://sf.blockshopper.com/news/sto...nce_club_founder_lists_Belvedere_4BD_for_5_2M

"Graham V. Kos and Shay A. Kos have listed for sale a four-bedroom, 4.5-bath home at 219 Beach Road in Belvedere for $5.2 million.

The Koses paid $4.0215 million for the property in June 2000. 

The 3,558-square-foot house, built in 1900, is in Belvedere Bayside. 

...
Mr. Kos is the founder of Solstice, a leading second-home destination club. 

Prior to founding Solstice, he was an options trader at the Chicago Board Options Exchange and was affiliated with Boulder Concepts Restaurant Group, a collection of restaurants in Denver and San Francisco."

Equity Estates SherpaReport link:

http://www.sherpareport.com/destination-clubs/dennis-rasmussen-equity-estates-0410.html

"The former Major League Baseball pitcher Dennis Rasmussen has signed on with luxury residence fund Equity Estates. Based out of Orlando, Florida, Rasmussen will leverage his involvement with the MLB Players Association alumni arm as well as other professional athlete organizations to expand Equity Estates’ reach in those markets...."

LuxLife link (new Asian club):

http://www.destinationclubnews.com/News_LUXLife_Unveils_Equity_Shares_Villa_Memberships.php

"LUXLife has announced that they have introduced their first phase of "Equity Shares Villa Memberships." These equity shares will be available at the club's oceanfront villa at the St. Regis Resort & Villas residences in Nusa Dua, Bali and the pool villa at Andara Resort & Villas in Phuket, Thailand. 

Equity Shares Villa Members receive "ownership plus a full VIP LUXLife Membership." Phase I shares are available in 1/12th increments and are priced between HK$2.9 to HK$3.9 million, depending on the villa selected. Based on today's currency conversion, this equates to roughly $375,000 and $500,000 respectively. Financing is available to qualified and approved owners, members, and applicants...."


----------



## Kagehitokiri2

odd. st regis residences must not have usage limits. thought i read that they did.

so perhaps LUXLife is like elan. (fractional with potentially DC-style use) (and at least some ridiculous markups)

OTOH karma's belvedere is full ownership of a unit with limited use, but owners use is DC-style at any property. and its unique in that its a hotel residence that you get rental income from.

re the EE hire, someone reminded me of this > http://findarticles.com/p/articles/mi_m0EIN/is_2004_June_8/ai_n6058462/


----------



## TarheelTraveler

TarheelTraveler said:


> Interesting case.  Thanks for pointing that out CM.
> 
> Amended complaint is linked here.
> 
> http://webaccess.sftc.org/Scripts/M...,-AEXCLUSIVE RESORTS CLUB MANAGEMENT\, LLC,-A
> 
> Probably the best written plaintiff's complaint that I've seen in a suit against a DC.  ER is trying to get this into arbitration.  If successful, we probably won't find out the result.  Again, the lesson to be learned from this case is be careful what you sign (I actually find it interesting that a lawyer signed it, particularly one this good (although in fairness, she says ER wouldn't negotiate the contractual terms)).
> 
> IMO, you can basically boil it down to can dues be raised above the cap that is specifically provided or can ER unilaterally amend the contract, disregarding the specific cap that is provided. Typically, the specific trumps the general in a contract, but I've clearly not looked at the law on that point.
> 
> I thought this part of the complaint was interesting:
> 
> "11.	Prior to the execution of the Agreement, Exclusive Resorts discussed its business plan with Plaintiff Priest. Defendants represented that Exclusive Resorts' business would be operated on a "for-profit" basis, that Exclusive Resorts was soliciting Membership Fees with the intention of using those fees to invest in and develop a portfolio of high-end vacation properties, and that Exclusive Resorts' business model would assure its ability to repay Plaintiffs' Membership Deposit. Exclusive Resorts further stated that it expected Plaintiffs' annual dues, along with the higher annual dues of Club members who were subsequently to join, to cover the physical operating costs of such properties. Defendants specifically told Plaintiff Priest that neither Membership Fees nor dues were to be used to pay property taxes or investment expenses, which costs were to be covered by the long-term investment returns."
> 
> I've not heard that depiction of the model yet.



Interesting ruling in this case.  "MOTION [to compel arbitration] IS DENIED, 2003 AND 2010 CLAUSES UNENFORCEABLE, BECAUSE UNCONSCIONABLE"

Here is the whole report that is posted.  ER will need to file a response within 15 days of April 1 (unless extended).

LAW AND MOTION 302, DEFENDANT EXCLUSIVE RESORTS CLUB MANAGEMENT, LLC MOTION TO COMPEL ARBITRATION AND TO STAY PROCEEDINGS. ARGUED AND THE COURT ADOPTED ITS TENTATIVE RULING AS FOLLOWS: MOTION IS DENIED, 2003 AND 2010 CLAUSES UNENFORCEABLE, BECAUSE UNCONSCIONABLE. THE COURT IS STILL DETERMINING IF THE 2010 CLAUSE IS STILL APPLICABLE, THIS ISSUE IS STILL UNDECIDED. ALSO, THE COURT RULES THAT DEFENDANT HAS 15 DAYS TO RESPOND TO COMPLAINT. (PREVAILING PARTY TO PREPARE A FORM OF ORDER.) JUDGE: PAUL H. ALVARADO; COURT REPORTER: KENT GUBBINE, CSR #5797


----------



## NeilGoBlue

I'm seriously asking this question...

Is 'UNCONSCIONABLE' a legal term?

Or is this a total slam of ER?

Seems like a very strong word for a judge to use unless it's some legal term that I hadn't heard of..


----------



## TarheelTraveler

NeilGoBlue said:


> I'm seriously asking this question...
> 
> Is 'UNCONSCIONABLE' a legal term?
> 
> Or is this a total slam of ER?
> 
> Seems like a very strong word for a judge to use unless it's some legal term that I hadn't heard of..



It's really both.  It is a legal term but it is used pretty sparingly in contract law, particularly by judges in actual rulings (versus one side's lawyer throwing it out there as another argument).  What's also unusual is that arbitration clauses in contracts are typically valid, so I suspect the judge is not at all a fan of ER's contracts, which doesn't bode well IMHO for the likely argument that they could change the contract at their discretion.  I could see a lot of courts being reticent to enforce what is in many ways a one-way contract. Binding against the member, but not against the Club, because the Club can change many terms.


----------



## ClubsRDead

Yes, the term is actually often used in legal proceedings in contract law issues.  However, it typically implies that one party took advantage of another who didn't have the mental capacity to understand the terms they were entering into.  I think most ER (or any DC club members) would have a hard time fitting into that box.

I think everyone knew that the ER contract issues were going to come to a head one of these days.  All they will be looking for is a precedent, so if they can stave off one or two, the rest won't get anywhere either.  I think this is pretty similar to what is going to happen with the TH / AK suits.  The clubs just want one or two to go there way, the members, of course, want the same thing.


----------



## TarheelTraveler

I think we're actually saying the same thing in different ways.  Lawyers very often like to throw out the argument that a contract was unconscionable.  It actually comes up a lot in cases with people that have impaired judgment as CRD points out (essentially the person was taken advantage of by a contract that is so clearly one-sided it is unconscionable).

However, what makes this case so unusual IMHO is that a judge apparently felt that a clause was unconscionable as to a person who presumably was not impaired (and actually was an attorney) when she signed the contract.  Furthermore, it deals with an arbitration clause which is routine, and routinely upheld because the parties agreed to it.  On top of that, IMO, most of the time, judges like to enforce those clauses because frankly, they then have the justification to boot a case reducing their heavy workloads.

I personally think ER should prevail on that issue, but it's California so nothing surprises me.  If I were ER, I'd much prefer to get this into arbitration, so that the results wouldn't be public.  If this ER member wins and it is public, it could open up the floodgates with respect to the earlier ER members.  To me, the issue that should be much more controversial (again IMHO) is whether the specific dues cap prevails over the general ER contract amendment clause.  I guess the lesson is be careful as to what you sign and never assume that something is not going to be used against you in the future.

Just my two cents.  Not providing legal advice.


----------



## TarheelTraveler

http://www.steamboatpilot.com/news/2010/apr/11/big-3-luxury-ski-area-base-condo-developers-reach-/

"Burden said his company has negotiated a bulk sale of 10 whole-ownership condominiums with an outside destination club his company has done business with in the past. They will defer the purchase of five of those units indefinitely, but he expects two or three sales to close soon and the rest of the first five to sell this year."

Is this ER?  By the way, not being critical if it is, as it's the prudent thing to do.


----------



## Kagehitokiri2

yes.

other pending = viceroy anguilla and vdara las vegas

seems like viceroy might be worth dumping.


----------



## TarheelTraveler

Looks like UE financial results will be out by the extended deadline today.

http://www.marketwatch.com/story/ul...april-15-2010-2010-04-14?reflink=MW_news_stmp

Also have a conf. call to discuss the results.

Press release: "Ultimate Escapes, Inc. (OTCBB: ULEI and ULEI-W) (the "Company"), one of the world's largest luxury destination clubs, today announced that it will report its fourth quarter and full year 2009 results on Thursday, April 15, 2010. 

The company will hold a conference call with investors and analysts at 4:00 PM EDT on that day to discuss the results. The dial-in number for the conference call is (888) 516-2447 -- please dial the number 10 minutes prior to the scheduled start time. A live webcast of the conference call will also be available on Ultimate Escapes' website at www.ultimateescapes.com. 

A replay of the call will be available two hours following the end of the call through midnight EDT on Thursday, April 22 at www.transact-tech.com and by telephone at (888) 203-1112; passcode 2924116."


----------



## Kagehitokiri2

so, did ER sell the montage villa, or are they getting the rental income?
http://www.montageresidences.com/lagunabeach/residential-rentals.php
http://www.montageresidences.com/lagunabeach/seven-stickley.php
then again while i seem to recall hearing they owned at montage, not positive they arent/werent leases?

dont recall if any DCs have properties at villas del mar or espiritu del mar?
http://www.elitetraveler.com/news_d...piritu-be-mexicos-finest-private-fitness-club

http://ir.ultimateescapes.com/releasedetail.cfm?ReleaseID=460456


> $3.75 million in member assessment fees earned in the fourth quarter of 2009 that were not earned in the prior-year quarter
> 
> Net loss for 2009 was $13.0 million


http://ir.ultimateescapes.com/secfiling.cfm?filingID=1144204-10-20598


> All of the properties owned by us are subject to one or more mortgages.
> 
> We do not intend to levy an assessment fee in 2010 unless the majority of members vote in favor of any proposed assessment. We intend to seek to raise more equity in 2010...We have plans to spread out the collection of annual dues more evenly throughout the year.
> 
> at December 31, 2009 and 2008, there were 46 and 11 members, respectively, who had resigned.


$5,037,000 - Membership deposits to be refunded 
seem to recall the PE resignation figure being ~60
dont know how many TH and reactivated have walked (no option to resign, right?)

1214 members 
104 owned ($152.6mm value) (8 held for sale) + 37 leased (2 leased from keith)

$20,680,763 non-recurring revenue in 2009 (56% of $37,011,000 revenue) (EBITDA = $6,702,000) 	 
$12,144,000 - assessment revenue in 2009 
$5,719,763 - revenue from SAAC transaction


> Other revenue was $2,817,000 in 2009...due to the cross reservation program fees in 2009 charged to Private Escapes for allowing their members to stay at our properties.  This cross-reservation program ended effective September 15, 2009, when we acquired Private Escapes.



$123mm debt
$99mm capitalsource (secured)
$13.6mm various mortgages (from PE, incl one from keith)
$10mm shareholder note (secured)
$700k non-mortgage notes

comp
JT $316k (contract = $450k, increase 10% per year, $25K car, benefits)
RK $334k (contract = $375k, benefits)
CFO $261k (contract = $375k, benefits)
seem to recall details on benefits in original SAAC docs, and they really added up. paid vacation is 20 days. 
board members $11k > $96k

UE owns 15% of "Villa Bugambilia, LLC, an entity which owns a property located in Mexico on which a condominium is being constructed"

re conference call - 16 minutes and 1 caller


----------



## ClubsRDead

Was it just me, or did the one and only person asking questions seem like a "plant" so JT could propel a rosy outlook of the industry?


----------



## UnhappyInCT

Note 3 to the financial statements summarizes how close UE is to going under (or to putting another gun to the head of the members)...

*NOTE 3 – LIQUIDITY*

Our consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to
a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. As shown in the
accompanying consolidated financial statements, the Company incurred net losses of $12,965 and $23,222 during the years ended December 31,
2009, and 2008, respectively. As of December 31, 2009 and December 31, 2008, the Company's current liabilities exceed its current assets by
approximately $33 million and $9 million, respectively. In addition, although we have completed the refinancing of our CapitalSource revolving
loan facility (Note 2), *we may not be able to meet certain covenants under the revolving loan agreement in the future *(see Note 7). *We have also
experienced a decrease in new membership sales and existing member upgrades over the last six months of 2008 and throughout 2009.*The above factors, among others, indicate that we may encounter a liquidity event which *may cause us to be in default of our loan covenants*.

Our management has taken steps to increase cash flow in order to cover 2010 operational expenses through, if necessary, the sale of selected
club properties, and closely monitoring and reducing operating expenses. In addition, the Company is actively seeking to raise additional
working capital.

The items discussed above *raise substantial doubts about our ability to continue as a going concern.* The financial statements do not include any
adjustments relating to the recoverability and reclassification of recorded asset amounts or the amounts and classification of liabilities that might
be necessary, should we be unable to continue as a going concern.


----------



## wilkes591

*Is this new info?*

We all know this. What has changed nothing. So they got your money, my money, and other's members money. You made a choice to write them off and walk away from your deposit, I just made a different choice. 

I would rather use them until the end with as little of my addition capital as possible. If you did not notice UE did just raise in March over $5 Million from members who volunteered to pay an extra year in dues for additional reservation days and other benefits. I was not one, however it will keep the company afloat. 

I think you are under estimating how foolish some member's are with money or how much some member's enjoy the life style and are willing to pay for it or how some member's have so much capital that this is just a drop in a bucket to them.

So be unhappy in CT and a player hater, while I am happy travel with my friends and family until the end.

I hope some thing else can make you happy, other then me and all the other member lose our deposits and travel opportunities we pay for. Yes, JT benefits from my travels, so what. I got bigger fish to fry.


----------



## Kagehitokiri2

im at a loss re the deposit > stock conversion. shouldnt it be dropping their deposit liabilities?

will be interesting to see exact number for new non-recurring in Q1. (and %)


----------



## wilkes591

*All that matter's*

is CASHFLOW to UE. They need capital and need to reduce expenses. I would say they have enough until the end of July or August, base on the burn rate and the additional capital from the members in March. 

How did they get $7 million in new deposits in 2009? How stupid and blind can people be?


----------



## Desties

*The Call*

The 16 minute conference call was one of the shortest that I've heard in a long time. 

No, I don't think the lone analyst asking a question was a plant. It's just that you're not exactly going to have Morgan Stanley or Piper Jaffray covering a company as tiny as Ultimate Escapes. 

During the call it was mentioned that just $3 million and change of its debt matures this year, so unless I'm missing something I don't see default risk until next year (and I'll naively cross my fingers, hoping for general industry improvement by then). So I think the litigation risk is a bigger threat than its debt coverage. 

And the warning is pretty standard boilerplate EXCEPT for the "going concern" remark. That's no fun. 

Still, there will be a members call next week, so hopefully we'll have more questions answered then.


----------



## wilkes591

*CapSource is going to lose alot more money then me!*

Except for payments required on the sale of a mortgaged property, no principal payments are due until maturity on April 30,
2011, except required cash payments of $2 million on December 31, 2009, $3 million prior to June 30, 2010 (which have both been paid as of
March 31, 2010) and $5 million prior to December 31, 2010. As described above, we are currently in negotiations with CapitalSource which
may require us to increase the repayment obligations due by June 30, 2010 and December 31, 2010. If we exercise one or both of the extension
options, cash payments are required of $5 million on each of June 30, 2011, December 31, 2011, June 30, 2012 and December 31, 2012

Is that $5 Mill on 12/31/2010 for interest?

How do you raise $9 million and pay $4 million in fees? 

I hope you are right!


----------



## Kagehitokiri2

perhaps its a matter of the real estate market. as long as it stays down, capsource probably doesnt really want to take ownership and have to sell/etc.


----------



## AKTHUE

*Capsource fees and control*



Kagehitokiri2 said:


> capsource probably doesnt really want to take ownership and have to sell/etc.



As long as Capsource gets another fee for every modification and for waiver of every convenant violation, and as long as they can convince an appraiser or auditor that they have enough security for their loan, they can keep playing the modification and waiver game.

However at some point the music will stop, and Capsource will take control, and at that point Capsource will have to make the decisions based on the highest recovery for their loan balance - whether they are better off operating a club or selling property. They will likely be better off selling property. JT's last maneuver could be to file for BK the day before Capsource forecloses, but then the BK court or trustee will control. 

We will probably all get to see this kabuki theater later this year.


----------



## wilkes591

*You think CapSource wants to Foreclosure?*

I can tell you one thing I am witnessing first hand. The Real Estate market will be hit hard in the next few months. We are processing more foreclosures now for clients then ever before. The wave is coming and it is a big one. I doubt Capsource will be able to get $50 million through forced sales of Real Estate in vacation markets.  

I hope Capsource realizes the market conditions and continue soaking up the payments until the market turns and who knows by then UE might have a chance.


----------



## Kagehitokiri2

when do we get Q1?



wilkes591 said:


> How did they get $7 million in new deposits in 2009?


2009
$7,052,000 membership fees 
$60,000 upgrade fees

2008
$3,650,000 membership fees
$409,000 upgrade fees

http://viavid.net/vvdce/U298432/E000073CE.asx
"our sales pipeline, mark, is probably the  highest its been in the last 18 months" (oct 15 2008 > apr 15 2010)
(mark argentino @ craig hamilton capital )


wilkes591 said:


> UE did just raise in March over $5 Million from members who volunteered to pay an extra year in dues for additional reservation days and other benefits.


so instead of having to "upgrade" for more nights


----------



## AKTHUE

*UE 2009 Membership fees could be misleading*



Kagehitokiri2 said:


> 2009
> $7,052,000 membership fees
> $60,000 upgrade fees
> 
> 2008
> $3,650,000 membership fees
> $409,000 upgrade fees



I found the $7 million in membership fees to be surprising, too.

Then I realized - this is not the cash flow, it is accrual accounting. UE states that it recognizes the non-refundable portion of membership fees over 18 months, and the refundable balance over 10 years. Further, UE trumpeted their growth in homes, members and revenues as a result of the PE merger. So... the difference in the 2009 and 2008 numbers is not so much how many new members they sold each year, but how much of the member deposit they recognized as revenue, and how many new members they got from PE from which to recognize revenue. It doesn't really indicate any large number of new membership sales.

Member intiation fees not yet recognized and overall deposits also went up due to counting the PE members.

A cautionary note in the 10K filing:

On the balance sheet, the amount of membership receivables went from 639,000 to 3,264,000 -- UE reinstated all the suspended members and invoiced them - and maybe recognized that as revenue. How many of them are actually paying? Members are supposed to prepay the membership fee, so why is there such a big receivable?


----------



## Kagehitokiri2

indeed, lots of fun stuff.

i broke out non-recurring in my first post. (56% in 2009.) i think that sums it up, without having to figure out how they break down recurring.

im most confused by deposit liability. i thought the point of stock conversion was to reduce it. i didnt really get that from the docs.

re paying - big question is how many TH and reactivated walked. (because they cant resign, right?) they did say renewal rate dropped in 2009 (for 2010?) in the call. dont remember numbers. and when they say "resigned" what does that mean - added to list, or cleared the list?

(and of course sales, which they are trying very hard to make sure it cant be figured out via other data.)


----------



## AKTHUE

*Deposit Liability*



Kagehitokiri2 said:


> im most confused by deposit liability. i thought the point of stock conversion was to reduce it. i didnt really get that from the docs.
> 
> (and of course sales, which they are trying very hard to make sure it cant be figured out via other data.)



Maybe the deposit liability went up because they added deposits owed to members that came in via the PE merger. It seems dishonest to claim all this revenue and member growth due the PE merger, when that merger was signed in 2007 and it was really just a delay in closing.

I am cofused about one other point. UE recognizes the REFUNDABLE part of the member deposit as revenue over 10 years, meanng 10% per year. And they mention a membership redemption assurance program, which reduces the amount of the membership to be refunded until it is reduced to zero after 10 years, to justify recognizing the revenue, I think. But aren't members entitled to a refund of the membership (or 80%) forever? Does the refund right really go away after 10 years? Or does it just change from a refund to a resale of the membership? This feels like an accounting gimmick.


----------



## Kagehitokiri2

pretty sure it does go away 10 years after member joined. IIRC its stated in membership docs and financials. 

IIRC *EndofDays*, *TarheelTraveler*, etc discussed this accounting issue, but dont recall the conclusions.


----------



## TarheelTraveler

AKTHUE said:


> I found the $7 million in membership fees to be surprising, too.
> 
> Then I realized - this is not the cash flow, it is accrual accounting. UE states that it recognizes the non-refundable portion of membership fees over 18 months, and the refundable balance over 10 years. Further, UE trumpeted their growth in homes, members and revenues as a result of the PE merger. So... the difference in the 2009 and 2008 numbers is not so much how many new members they sold each year, but how much of the member deposit they recognized as revenue, and how many new members they got from PE from which to recognize revenue. It doesn't really indicate any large number of new membership sales.
> 
> Member intiation fees not yet recognized and overall deposits also went up due to counting the PE members.
> 
> A cautionary note in the 10K filing:
> 
> On the balance sheet, the amount of membership receivables went from 639,000 to 3,264,000 -- UE reinstated all the suspended members and invoiced them - and maybe recognized that as revenue. How many of them are actually paying? Members are supposed to prepay the membership fee, so why is there such a big receivable?



Lots of good points/questions are being raised.

It would be interesting to know what portion of the $7M relates to new membership sales versus the recognition of revenue from the existing deposits (I suspect now mostly from the PE side), which we all know is not cash flow, just removing a liability from the books.  I certainly didn't read every word of the 10-K, but I didn't see anything that breaks down member sales or member number changes.  Seems like it would be a good question to ask about on the member call.  It seems like prior filings (maybe they were in connection with the offerings) were more informative.

Also would be worth asking about the increase in membership receivables.  AKTHUE's explanation seems the most logical, but if so, I wonder how much of that "asset" is actually collectible.

In reference to AKTHUE's question, IIRC, didn't the membership redemption assurance program reduce the amount the member was entitled to on liquidation (rather than a resale of the membership)?  In other words, the deposit return is amortized down to zero over 10 years if the club is liquidated.


----------



## Kagehitokiri2

btw IIRC this is another thing they broke down more in past financials.. (deposits etc)



TarheelTraveler said:


> In reference to AKTHUE's question, IIRC, didn't the membership redemption assurance program reduce the amount the member was entitled to on liquidation (rather than a resale of the membership)?  In other words, the deposit return is amortized down to zero over 10 years if the club is liquidated.


huh. guess i dont remember at all.


----------



## TarheelTraveler

A couple of additional questions/thoughts:

1. Loan Covenants - "We incurred net losses of *$13.0 million *and $23.2 million during the year ended *December 31, 2009 *and the year ended December 31, 2008, respectively." 

"Covenants in the revolving credit facility include obligations to maintain either a restricted cash balance of not less than six months of debt service or a debt service coverage ratio of 1.25 to 1, to maintain a leverage ratio between debt and consolidated net worth of no more than 3.5 to 1, to comply with specified ratios of number of club properties to club members, *to have a net loss of no more than $10 million in fiscal 2009*  and $5 million in fiscal 2010, and to have net income in each year thereafter (as adjusted in each year for the non-refundable portion of new member initiation fees not yet recognized in income and, in 2009, for non-cash stock-based compensation), and to maintain a consolidated debt ratio of no more than 80%. "

Is CapitalSource waiving these covenants or is there something that I'm missing?  I assume that they're better off waiving the loan covenants.

2. I don't think I understood the bolded part before in the discussions on DC4MS (or if I did, I forgot): "Club members who resign may receive a partial redemption of their membership fee. We provide assistance to club members who resign by using commercially reasonable efforts to resell a resigned club members’ membership, and upon such resale, the resigning club member generally receives 80% of the proceeds of sale and we retain the remainder as a transfer fee. *In the event we are unable to resell a resigning club members’ membership after an agreed period of time, we have certain arrangements with such club members to provide a partial redemption of their membership fee (excluding the initiation fee), based on a sliding scale that declines to zero over a 10 year period*."

Looks like that comes into play in either liquidation or if they are unable to resell the membership.

3.  I was trying to get a rough idea of the cash flow based on the 10-K.  Assuming 2010 is like 2009 (which, of course, is a big assumption but I'm not sure what else you do), the Club has inflows of 14.9M in dues and 98K in interest income.  Although not entirely clear, the 10-K suggests another 2.8M in revenue in 2009 mostly came from PE from the cross-reservation program which ended.  So not including another assessment (12.1M last year) and based on a stable membership, there would be about 15M coming in plus an inflation adjustment to dues, so maybe that gets you to 16M.  I did not include sales revenue, as it's not clearly deliniated in the 10-K (between new monies and recognition of deposits on the books), and I'm not sure how much you can count on it in this environment.

On the cost side, there were $11M in property operating costs less some for the PE cross-reservation program (the 10-K says there was a 1.1M increase primarily from this program on the expense side).  3.5M in lease costs.  3.0M in salaries (excluding non-cash compensation). 3.5M in general administration.  10M in interest expense.  There was also 1.2M in advertising and 479K in sales commissions, but let's take that off the table and assume that sales cover those expenses.

Accordingly, based on this rough math, the costs of running the portfolio and club are probably in the 27-31M range, and incoming dues are something like 16M.  For those who are more financially adept, what am I missing?

Based on the 10-K, cash typically comes from one of the following sources: equity capital, member sales (new deposits and upgrades), dues and borrowing.  Borrowing obviously just adds to the debt, and while it may be a short-term solution, it seems like it would just add to a long-term problem IMHO.  Member sales are starting to kick in across the industry, but not at anywhere near pre-2008 levels, so I'm not sure that is a good source right now, and to the extent that you take those deposits to spend on operating shortfalls (rather than real estate or the pay down of principal on debt), you again just add to a long-term problem IMHO.  Equity capital is tough to find these days based on the prior UE offerings and in general.

An obvious source of revenue is from the members again, but do the UE members on here think that it is a viable source, given the 2009 assessment and RAP conversion program that brought in a good amount of dollars from members but didn't go so well from a stock price standpoint?

It would be nice if UE could refinance the debt at a lower rate or get some debt forgiven from CapSource.  Are those likely possibilities based on what you're hearing?

Obviously, expenses could likely be cut some more, which would help some.

I've got to give JT credit for always being creative, so I wouldn't be surprised by anything, but what other options am I missing?


----------



## Kagehitokiri2

TarheelTraveler said:


> incoming dues are something like *16M*


i got the same thing ($16,330,237) by breaking out non-recurring >


Kagehitokiri2 said:


> $20,680,763 non-recurring revenue in 2009 (56% of $37,011,000 revenue)
> $12,144,000 - assessment revenue in 2009
> $5,719,763 - revenue from SAAC transaction
> 
> 
> 
> Other revenue was $2,817,000 in 2009...due to the cross reservation program fees in 2009 charged to Private Escapes for allowing their members to stay at our properties. This cross-reservation program ended effective September 15, 2009, when we acquired Private Escapes.
Click to expand...




TarheelTraveler said:


> An obvious source of revenue is from the members again, but do the UE members on here think that it is a viable source, given the 2009 assessment and RAP conversion program that brought in a good amount of dollars from members but didn't go so well from a stock price standpoint?





Kagehitokiri2 said:


> We do not intend to levy an assessment fee in 2010 unless the majority of members vote in favor of any proposed assessment. We intend to seek to raise more equity in 2010...We have plans to spread out the collection of annual dues more evenly throughout the year.





wilkes591 said:


> UE did just raise in March over $5 Million from members who volunteered to pay an extra year in dues for additional reservation days and other benefits.



comp
2009 $5,149,000 + $6,604,000 stock
2008 $7,250,000 + $2,169,000 stock


----------



## TarheelTraveler

Three additional news items:

http://www.marketwatch.com/story/ul...-destinations-2010-04-20?reflink=MW_news_stmp

UE "announced the addition of the new five-star Waldorf Astoria Orlando to the Club's growing portfolio of spectacular vacation destinations. The partnership will allow members of Ultimate Escapes to vacation at Waldorf Astoria Orlando as part of their destination club membership...."

http://www.sherpareport.com/destination-clubs/quintess-tour-club-0410.html

"The luxury destination club Quintess, LRW has has entered a reciprocal agreement with its newly launched sister club THE TOUR CLUB. Quintess, LRW members will have access to new destinations that include: 

The Resort at Pelican Hill, Newport Coast, California
Sage Valley Golf Club, Graniteville, South Carolina
Atlanta National Golf Club, Atlanta, Georgia
TPC Jasna Polana, Princeton, New Jersey

At the Resort at Pelican Hill, rated by Golf Magazine as a "Premier Resorts 2010 Top Newcomer," members stay in richly appointed two-bedroom villas. Sage Valley, ranked as #6 of America's greatest golf retreats by Golf Digest, offers members four-bedroom cottages that epitomize Southern charm and luxury. At Atlanta National, one of Georgia's most respected private clubs offering world-class golf, members stay in either a four-bedroom lodge overlooking the 8th or 12th hole, or the five-bedroom villa overlooking the 17th green. Nestled in the beautiful hills of Princeton, NJ, TPC Jasna Polana offers the opportunity to stay in one of the two former private residences on the estate...."


http://www.luxist.com/2010/04/13/the-design-of-the-villa-vacation-part-1/

""The Villa vacation experience is a good value, because it can create the best memories," said Charlie Stephenson, Director of A&K Villas Europe, " and a great way of seeing Europe in a leisurely, elegant and often in a multi-generational way. Yes, we had a standstill in 2009, but we did not deflate. But this year, 2010, we are up dramatically! Since January 2010, our volume has increased about 25%."
...
"Both the American and our European Villa guests often travel in groups: with nannies, grandparents, in-laws, and children's friends -- so they are always are very appreciative of the expansive nature of our Villas,"comments Charlie."If a family stays with us once, they will never want to stay in a hotel again. We have child friendly properties, professional child care people and nannies, child friendly touring ideas and holidays. And no child is confined to a hotel room and with us, they can make all the noise they want to! Some of our villas have Nanny apartments also."

""But our services move beyond children! We can of course hire private chefs, sail and yacht charters. A&K is, after all, a high end travel company so from these Greek villas, or from any of our villas, we can put together one day to five day tours of areas fairly close by. For example, if you are staying in a Villa in Venice, we can arrange a trip to Dubrovnik, which is right across the Adriatic. or, if you stay at one of our Villas at St. Emilon, we can do a vineyards/wine cave tour, no problem. This differentiates us from many other high end villa rental companies, and probably one of the reasons for our continued success."

Another variable for the continued villa rental success may be the deflation of many of the high end destination clubs that bankrupted in the past few years: Solstice, The Lusso Collection, High Country Club, to name a few. Members of those clubs sampled the life of high end residences and villas, and became acclimated to exceptional space, location and amenity."


----------



## Desties

*UE - Waldorf in Orlando*

I hate to look a gift Waldorf-Astoria in the mouth, but I just checked the rates on the "deluxe rooms" that are being made available through the program and they can be booked directly for as little as $161. That's a bad deal, even if were made available to the PE Legacy members. 

I see the allure, especially for UE folks who have a lot of unused nights or want to gift them to a relative, but it's still not a very compelling value proposition.


----------



## Kagehitokiri2

removed...


----------



## TarheelTraveler

Desties said:


> I hate to look a gift Waldorf-Astoria in the mouth, but I just checked the rates on the "deluxe rooms" that are being made available through the program and they can be booked directly for as little as $161. That's a bad deal, even if were made available to the PE Legacy members.
> 
> I see the allure, especially for UE folks who have a lot of unused nights or want to gift them to a relative, but it's still not a very compelling value proposition.



http://www.sherpareport.com/destination-clubs/waldorf-astoria-orlando-ultimate-escapes-0410.html

"The hotel will be part of the Ultimate Collection, a selection of over 130 luxury hotels around the world. Ultimate Escapes members can use up to 7 nights per year to stay in suites at the Waldorf Astoria or other hotels in the collection.

Ultimate Escapes already has a large 4 bedroom, 4 bathroom home in Orlando. Robin Spindell of Ultimate Escapes told SherpaReport "We are booked solid in our Orlando home so this should help members have much more access to this popular destination.""

Desties' post and the quote above made me wonder about this program.  Do you get a suite as noted by the SherpaReport or a deluxe room at the Waldorf Astoria as noted by Desties? 

I'm not a big fan of the hotel programs (including my own club's), but I guess if you've got extra nights to burn, it's another option.


----------



## Desties

*Well*

The press release has it as "deluxe rooms and suites" that will be available:

http://finance.yahoo.com/news/Ultimate-Escapes-Adds-New-prnews-1225778276.html?x=0&.v=1

I'm guessing the club level may determine the actual exchange, though the "deluxe suites" can be booked for as little as $200-ish. The primo Waldorf Astoria Suite was as cheap as $675. 

The home is in Reunion -- and it's a Signature-level property and very nice. Orlando is a hub of cheap property rentals, but it's important to have a presence there given how popular it is.


----------



## Kagehitokiri2

http://destinationclubnews.com/News_Exclusive_Resorts_Adds_Ten_Residences_In_Las_Vegas.php
unfortunately they dont seem to be duplex 
(perhaps they wouldnt do bulk discount on those?)
value is not great, but not horrible, and ER didnt have to pay that much
vdara is the closest condohotel to the strip, and probably the nicest condohotel units other than palms place penthouses
(MO residences were unfortunately not an option due to 6 month min lease)

that just leaves viceroy anguilla, which as i said might be worth dropping


----------



## TarheelTraveler

Desties said:


> The press release has it as "deluxe rooms and suites" that will be available:
> 
> http://finance.yahoo.com/news/Ultimate-Escapes-Adds-New-prnews-1225778276.html?x=0&.v=1
> 
> I'm guessing the club level may determine the actual exchange, though the "deluxe suites" can be booked for as little as $200-ish. The primo Waldorf Astoria Suite was as cheap as $675.
> 
> The home is in Reunion -- and it's a Signature-level property and very nice. Orlando is a hub of cheap property rentals, but it's important to have a presence there given how popular it is.



Thanks for the clarification, Desties.  Anything interesting in the member conf. call?


----------



## Kagehitokiri2

2009 


TarheelTraveler said:


> Destination Clubs $195m


150 ER
55? hideaways 
30 EE
40 BT PC
(275)

http://media.corporate-ir.net/media_files/irol/20/200797/AR2009_lowres.pdf


> memberships sold (40 versus 28 equivalent memberships in 2008)



http://tugbbs.com/forums/showpost.php?p=890997&postcount=264
http://tugbbs.com/forums/showpost.php?p=892218&postcount=265


----------



## Desties

TarheelTraveler said:


> Thanks for the clarification, Desties.  Anything interesting in the member conf. call?



I only caught the second hour live, and the replay was made available today.

Since every slide was tagged as "Confidential" I won't take too deep a dive. There were no bombshells. It was a generally upbeat call -- including the Q&A. The thorny questions posed weren't as thorny as they were a year ago.

None of the Q1 financials were discussed because they had yet to file. 

The one thing that the club did do, which it had yet to do in any call, is specifically single out the properties it is trying to phase out in the rebalancing. I won't single them out, but they are the obvious low-occupancy, high-maintenance properties. The club also announced a new destination with 3 new properties set to open next quarter that isi n the final stages of negotiations. It also identified new markets it is exploring for new properties as well as existing high-demand markets where it is looking to tack on additional properties. 

It was another thorough call (nearly two hours) with half for the presentation and the other half for member Q&A.


----------



## Kagehitokiri2

from 10K >

8 held for sale

signature
- bahamas (1 other owned, which = ?)
- candlewood
- carlsbad
- chicago
- scottsdale (1 other owned, 1 other leased, which = ?)

premiere
- carlsbad
- lake tahoe (2 other owned, which = ?)
- steamboat springs


----------



## wilkes591

*That's old News Kage*

Some have sold in the 1st Qtr or they are pending and gone from the member's only site. 

The call was good and JT took some good questions. Looks like UE will make it through the year with out hitting up the member's for additional cash per JT.  One of the questions. Looking forward to traveling with out worrying about UE at least until 2011!

Happy Traveling!


----------



## SciFrog

Raffles in Canouan isn't accepting online reservations anymore...


----------



## TarheelTraveler

wilkes591 said:


> Some have sold in the 1st Qtr or they are pending and gone from the member's only site.
> 
> The call was good and JT took some good questions. Looks like UE will make it through the year with out hitting up the member's for additional cash per JT.  One of the questions. Looking forward to traveling with out worrying about UE at least until 2011!
> 
> Happy Traveling!



That's good to hear and also good for the industry as a whole.

That's odd about Raffles.  Are they (or is that property) being sold?  SciFrog - so what do you think about the Tour Club-Quintess exchange?


----------



## Kagehitokiri2

what the heck? so they have dropped raffles a 2nd time? i guess because la samanna has higher occupancy?

http://destinationclubnews.com/News_Exclusive_Resorts_Announces_2011_Once_in_a_Lifetime_Journeys.php


> Patagonia: Authentic Andean Villa Retreats


now thats kind of interesting


----------



## SciFrog

I do not know the status of the Q homes, just that the Raffles HOTEL isn't accepting reservations anymore. Isn't Raffles being sold off soon?


----------



## Kagehitokiri2

http://www.bloomberg.com/apps/news?pid=20601104&sid=aBp3U7czxkQg
http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_511970.html

kingdom, colony, OMERS sold 40% stake in management company for $467mm and raffles singapore for $275mm

deal value being used also includes penalty of $105MM if a certain number of new management contracts have not been sourced by the new shareholder within 5 years

http://www.tripadvisor.com/ShowUser...cent_and_the_Grenadines.html#CHECK_RATES_CONT



> I received an email on Saturday (April 23rd...two weeks before my honeymoon) saying that "We regret that certain disruptive maintenance works have been scheduled during the period of your reservation and we are therefore unable to honor your reservation." Evidently, the hotel is going back to private ownership in the next few weeks and that is why they are canceling our reservation.
> 
> Needless to say we are very very displeased with our Raffles Canouan experience and would recommend anyone looking at booking to stay far far away (we booked over 5 months ago).



raffles canouan etc (1200 acres of northern canouan island) is leased through 2089 by Canouan Resorts Development (Antonio Saladino)

reservations shut down last friday (23rd) raffles reservations has no information - apparently their system goes to waitlist

http://www.elitetraveler.com/news_d...king-newsraffles-end-management-canouan-may-6



> April 29, 2010 - New York, NY - Elite Traveler has learned Raffles Hotels and Resorts will end its management of Raffles Canouan in the Grenadines on May 6.
> 
> During the property's approximately five years of association with Raffles it won numerous awards, including several inclusions on Elite Traveler's 101 Top Suites list.
> 
> As recently as last year the resort had expanded its airstrip to increase its accessibility for private jets. Representatives for the owner, Italian businessman Antonio Saladino, could not be reached for comment. In addition to the resort, the complex included a golf course plus extensive real estate development and a spa also operated by Raffles. Prior to Raffles management of the resort, it had been managed for a short period by Rosewood.


http://www.travelagentcentral.com/beach-resorts/canouan-island-resort-change-management-21159


> Canouan Resorts Development Ltd (CRD) has announced that, after a five-year partnership, Raffles/Fairmont Resorts will no longer manage Canouan Island Resort in St. Vincent and the Grenadines. The resort will revert back to ownership operation as Carenage Bay Resort beginning *May 20*, when it will resume taking reservations.
> 
> "In keeping with the serious reduction in business to the Caribbean, it has been decided that the business model of the Resort product in Canouan will therefore be undergoing changes within the coming months," wrote Achille Pastor-Ris, president of CEO of CRD, in a statement. "Canouan Resorts Development Ltd's real estate division The Grenadines Estate and construction company CCA Ltd have and continue to successfully develop the private residences, which now include 30 homes with over 100 bedrooms. It is anticipated that a Villa Rental program will be introduced during 2011. It is the intention of the ownership, CRD Ltd as Carenage Bay to continue to provide first class services to home owners and their guests which will include, for the time being, a reduced hotel services operation."


----------



## TarheelTraveler

*A&K Residence Club*

A&K had its member call yesterday.  A lot of information.  Very detailed.  From my notes, which are hopefully accurate:

Geoffrey Kent did the introductions.  Glad to talk to members any time.  Just call his cell phone or email him.

A&K N.A. President, Scott Wiseman, talked about last year.  They thought that the Residence Club and A&K as a whole were well prepared and adjusted appropriately for the downturn.  They merged the RC into the existing A&K structure to reduce costs and improve delivery.  Received $2.3M in new capital contributions and an additional 1.2M in dues.

The RC avoided any assessments to its membership and 30% of members upgraded their memberships.

98% satisfied with "great experience manager," 95% with destination hosts and 95% with residences. 

The Stein hotels declared bankruptcy, so they wrote the value of the bond from them down to zero, and put in a claim with the bankruptcy court to hopefully recover assets.  Replaced Stein hotels program with a few European boutique hotels. 

22 new European villas will be added to the villa program, and the in house chef prepared breakfast program was added to all Latin American houses.  Should be announcing some new Florida and New York travel options soon.

Brett Fichte spoke about the finances.  Decreased value of the overall portfolio by 15%, because of the real estate market and Stein bankruptcy.  Ended the year with an additional $1M in cash (3.7M).  Sold more memberships in the 1st Q of 2010 than all of 2009.  Audited financials by KPMG.  Clean audit opinion.

Darin Gilson talked about marketing efforts.  Experienced growth last year (albeit small) unlike most in the industry.  Some very detailed stats released like 11K+ on Residence Club prospect list, 4K + unique monthly visitors to the Residence Club website, 80K-120K/mo. on A&K's websites, emails and magazine that receive info. on Residence Club.  Active on Facebook and Twitter now.

New Sentient Jet Partnership was discussed - 

Details from website:
"Club members can live the lifestyle of a true jetsetter, thanks to an exclusive opportunity with Sentient Jet. Sentient pioneered the jet membership* model for private jet travel more than 10 years ago, and now Club members who purchase a $50,000 Jet Membership Plus** trial membership receive a $3,500 A&K travel credit. The credit can be used toward payment of annual Club dues or applied to your next A&K journey.This is your opportunity to fly by private jet with your family and friends and see if membership is for you.  If you’re planning a last minute getaway, Sentient can guarantee availability for your flight plan in as few as 10 hours and will provide discounts on qualifying round-trip travel to maximize your trial payment. The offer is available through July 31, 2010; the A&K travel credit can be applied through July 31, 2011.

Benefits of the $50,000 Jet Membership Plus trial include: 

Guaranteed availability in as little as 10 hours, 365 days a year 
Flexibility of two years to use funds on the card 
Choice of three popular jet models (Citation X, Citation Excel, Hawker 400XP) or four size categories for each trip 
Hourly rates (before taxes and fuel) on one-way travel range from $3,555 - $10,755 depending on category or model 
Discounts provided on qualifying round-trip travel 
Sentient Client Management Consultants available 24/7 to assist with any service need"

Stephanie Papionnou talked about 6% increase in member satisfaction, replaced underperforming destination hosts, A&K travel with credits is up.  Renovations or upgrades performed in 2009 on NYC, La Quinta, Puerto Aventuras, Tahoe, and DR.  Detailed items done and money spent on them.


----------



## Kagehitokiri2

TarheelTraveler said:


> Geoffrey Kent did the introductions.  Glad to talk to members any time.  Just call his cell phone or email him.
> 
> last year...Received $2.3M in new capital contributions
> 
> 30% of members upgraded their memberships.
> 
> The Stein hotels declared bankruptcy, so they wrote the value of the bond from them down to zero, and put in a claim with the bankruptcy court to hopefully recover assets.
> 
> Should be announcing some new Florida and New York travel options soon.
> 
> Sold more memberships in the 1st Q of 2010 than all of 2009.



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


> we have done approximately the same number of two year trial memberships and equity memberships during the first two months of 2010 as in all of 2009



apr 6 >
http://www.sherpareport.com/destination-clubs/a-k-residence-club-member-survey.html


> we expect many two-year trial members to convert before the deadline
> 
> more than a dozen prospects in the final stages of joining


----------



## travelguy

TT - Thanks for the update.  Good info!


----------



## SciFrog

It looks like Canouan management want to focus on homes and not on the hotel. Fine as long as they provide the great services they were, food there was really good and staff very friendly and professional.


----------



## TarheelTraveler

Very interesting article on sales in one high-end development (Peninsula Papagayo where ER has numerous properties):

http://www.internationalpropertyjou...er-costa-rica-project-sees-jump-in-sales.html

Makes some very interesting observations, including how the name of a product can effect sales.

"We started to see a turnaround in the market beginning in December of 2009, towards the end of the month. That was the first normal high season in terms of occupancy since the recession began. Customers began returning to consider property. Fewer “bottom feeders” and more serious customers began to take property tours with us. In December, we put out two contracts worth over $2 million each on Four Seasons private villas. That was the start of the 2010 high season. We are now up to 14 contracts on the year with sales ranging from $800,000 up to over $2 million."

"To our surprise, we are still selling lots. The buyer has changed. We no longer see speculative buying. The people who are now buying actually plan to live here or spend a significant amount of time here. We had several “luxury property consultants or experts” tell us that we would no longer be able to sell undeveloped properties.  It turns out that they were incorrect. I currently have six lots in escrow."

"What is still a challenge for me to sell are our condos. For some reason, one of the most affected products for us is completed condos. Personally, I believe that the word “condo” has become a bad word associated with financial loss as a result of the U.S. real estate market bubble burst. I have “villas” that continue to sell. I cannot fully describe the difference between a “villa,” a “condo” or a “townhome,” but I can tell you which one will sell and which will not, based on the name. I feel that our next set of condo type properties will likely be called villas, cottages or something of that nature. I actually do have two condos in escrow right now. The prices of the condos have come down by such a significant manner that they are extremely attractive. I would associate the term “condo” with “time share.” It has become sort of a bad word. Now, we need to come up with our term similar to “fractional ownership.”"

"It depends on the product. Our Four Seasons branded product is fully maintaining its pre-recession values. We continue to sell branded product for prices that compare to 2005 and 2006. Villas in the Four Seasons Costa Rica have sold between $1.9 million and $3.5 million. We have Four Seasons Private Villas which are 3-bedroom, 4-bathroom units with a small pool. I currently have two on the market in the $2.5 to $2.65 range. These are re-sale units. The owners should not have to take a loss on their units. There is a pretty steady demand for them. There is also a very high demand for the larger estate homes in the Four Seasons. Unfortunately, I do not have any available at this time.  Those homes in this market would sell in the $6 to $8 million range."

"Our lots have been reduced in price by about 30 percent across the board to realign ourselves with the world market. I have found that buyers will not consider you seriously if you cannot show that you have responded to the recession. Our condos have been reduced by about 40 percent from the pre-recession high."

"The buyer is different. There are no longer buyers with speculative interest keeping demand high.  Buyers can no longer be rushed, squeezed or coerced in any way. Your sales team must be extremely service oriented to sell in this market. You must treat the customer extremely well and spend quite a bit of time with them or they will simply go elsewhere."


----------



## Kagehitokiri2

you dont really get any higher end than amanresorts and four seasons

so far only a couple contracts have canceled at FS mauritius (opened right after lehman, and is about closed out) vail, marrakech

elysian chicago was about sold out and is closing well i believe (hotel residences, they canceled condohotel)


----------



## AKTHUE

*Cash for UE?*



wilkes591 said:


> Looks like UE will make it through the year with out hitting up the member's for additional cash per JT.



I don't think so. UE still burns cash, and it has some principal payments on their loans due on July 1. That may be why they are selling homes, to raise some cash to make principal payments, but it has to start hurting availability for members. UE is offering hotels you can book for $300-400 per night to offer days that cost ~$1000/night in dues. 

UE needs to keep raising cash. They are not selling any significant number of new members. They can't get equity investment. They are selling some properties in a distressed market, to pay some loans and lower operating costs. They have made several offers to get members to pay dues early, including giving those members the right to more advance reservations to leapfrog other members who are waiting for closer-in reservations. Eventually they will be left to make another assessment or Capital Source will take over.


----------



## Kagehitokiri2

interesting, from elite traveler re http://www.bougainvilleahouse.com/ (near former FS exuma)



> The Villa was opened in 2003 with a contract to provide deluxe accommodation for members of Exclusive Resorts Corporation.


----------



## TarheelTraveler

TarheelTraveler said:


> A&K had its member call yesterday.  A lot of information.  Very detailed.  From my notes, which are hopefully accurate:
> 
> Geoffrey Kent did the introductions.  Glad to talk to members any time.  Just call his cell phone or email him.



Today, the members got a followup email from Geoffrey Kent, with a survey for providing feedback on the member call.  He provided his email, office phone and cell phone and again made himself available to members and prospects for any suggestions, comments, etc.  That's pretty impressive IMHO for the head of any DC, much less the head of an organization with thousands of employees, dozens of offices, etc. and head of a worldwide travel organization.  I definitely give him some kudos for that.


----------



## Kagehitokiri2

TarheelTraveler said:


> Today, the members got a followup email from Geoffrey Kent, with a *survey** for providing feedback on the member call*.  He provided his email, office phone and cell phone and again made himself available



dont recall hearing about other clubs doing this. will be interesting to see if they refer to results in the future. 

agree re contact info too, as youve mentioned before.


----------



## wilkes591

AKTHUE said:


> I don't think so. UE still burns cash, and it has some principal payments on their loans due on July 1.  They are not selling any significant number of new members. They can't get equity investment.  Eventually they will be left to make another assessment or Capital Source will take over.



You are certainly entitled to your opinion, however the same people like you have been saying UE is going under "any day now" since the assessment and they were wrong. They just have big egos and can not admit to being wrong. No principal payment are due until 12/31/2010 refer to the recently filed F/S. I know, "they are lying". As for not selling any significant number of new members, if you take a look at the current earning announcements of the travel and leisure industry, it had the largest up side surprise. Maybe we are turning the corner. I did not think UE would sell any memberships in 2009, but they did. Fools like you and me are born everyday and are joining DCs. They can't get equity investment? They just went public. If you are talking about a secondary, UE will try again and some fool will pour money into it and then someone can post "I feel so bad for that person who made that investment". "another assessment" maybe, most members would probably pay, they like the lifestyle. Look at how many just prepaid a years dues, after just paying annual dues. As for Capital Source, if they are dumb enough to "take over" they get what they deserve a HUGE LOSS, there is no way the properties will sell for very much through foreclosure in already depressed markets. 

I do agree UE still has trouble on the horizon with Capital Source, however the members that call for the imminent demise have been wrong so far. Most likely they will eventual be right, until then I will travel.


----------



## TarheelTraveler

*The Tour Club*

http://www.newsobserver.com/2010/05/04/467890/charlotte-golf-tournaments-future.html


"...An initiative called The Tour Club was recently launched and, for golf-oriented people who want to experience the best, it offers impressive amenities.

It's being called the first national sports entertainment club for corporations and individuals. The Tour Club provides luxury residences, access to high-end courses, VIP experiences at PGA Tour events and other special touches.

Members will have access to all TPC courses as well as luxury homes in places such as Newport Beach, Calif., Las Vegas, Los Cabos, Mexico, Ponte Vedra Beach, Fla., and others.

"The PGA Tour called and wanted to create the best golf destination club on the planet and we spent a year designing it," said Ben Addoms, founder and chief marketing officer of The Tour Club.

"Along with backstage passes to the best golf in the world, we're giving them once-in-a-lifetime experiences. This is experience driven. We want to allow people to do things that most people only dream of doing."

The club launched in January and already has *25 members*, Addoms said. It's not for everyone. Corporate memberships are $200,000 and individual memberships are $125,000 with annual dues for both. For more information, visit www.pgatourclub.com...."


----------



## Kagehitokiri2

from Markers Motion for Summary Judgment (incl multiple depositions - thats a first for DC case docs IIRC)



> The Markers company is a generic name for the company itself, but basically it's a grouping of homes that individuals that own those homes that aren't using those homes put into a portfolio and allow the members of Markers to use and The Markers pays an expense to use those homes.
> 
> ...
> 
> I believe that Michael actually owns in his family trust some of the homes that are used in The Markers


sigh...


----------



## TarheelTraveler

Just as an FYI, A&K announced 22 additional European villas that can be booked using member nights.

"Members can exchange nights for credit toward stays at 22 additional A&K villas in Italy and France, as well as an A&K journey to nearly any global destination. Reservations at this new collection of European villas can be used for stays beginning in 2011. Select from 12 villas in France and 10 in Italy, located in extraordinary destinations such as the Cote d’Azur, Tuscany, and Provence."

Additional info:
http://www.akresidenceclub.com/a-and-k-european-villas.aspx


----------



## TarheelTraveler

More info. on the A&K villa program, which has some very cool options:

http://www.sherpareport.com/destination-clubs/ak-residence-club-european-villas.html

"Ten of the villas are in Italy and twelve in France and include:

Villa Siepi, Tuscany (5 bedrooms, sleeps 10)
Built in the 1500's this charming castle, Villa Le Siepi, is located in the typical Tuscan village of Panzano in Chianti. The Italian gardens, stunning views, private swimming pool and tennis court make it a perfect place in which to enjoy a relaxing family villa vacation. The main piazza of the village with its colourful Sunday market and the typical "trattorias" can be reached by an easy walk from this family villa.

Villa La Terme, Tuscany (5 bedrooms, sleeps 10)
Fully-renovated farmhouse with views over the Chianti hills, near the medieval village of San Gimignano. This luxury villa retains its original charm while being tastefully furnished with modern amenities, including satellite TV, luxury spa, steam room, infinity pool and summer bar. The shaded outdoor terrace is a perfect place to relax. 

La Fornace, Tuscany (5 bedrooms, sleeps 10)
This newly-renovated farmhouse -- with spectacular views over the Tuscan countryside -- is a peaceful retreat, centrally located for daytrips to Florence, Arezzo, Siena and Perugia. Fully-equipped for active families with bicycles, a heated swimming pool, soccer field, volleyball court, pool table, sauna and steam bath. Ideal for multi-generational families with two separate wings, each with a fully-equipped kitchen. 

Cabasson, Cote d'Azur (6 bedrooms, sleeps 8)
A modern villa, fully equipped and furnished in contemporary French style, set amidst vineyards with enchanting sea views of the Porquerolles Islands and direct beach access. 

L'Hameau des Bourgues, Provence (4 bedrooms, sleeps 8)
This spectacular hamlet dating back to 1422 is set in 15 acres of fruit and olive orchards, with stunning views over the Luberon Valley and mountains. This French provincial home with contemporary furnishings offers peace and tranquility with outdoor stone terraces for al fresco dining."

"... A&K also prides itself on providing "insider access", so members could take a VIP tour of one of the oldest Tuscan pasta makers in Lari, learn how pecorino and ricotta cheese are made in a Tuscan farmhouse located in the heart of Val d’Orcia, or embark on a private, underground tour of medieval Siena.

Earlier this year A&K Residence Club had 5 European villas available through this program, and last year had about a dozen European villas. All of these villas are managed through sister company A&K Villas."

ER Luxist Susan Kime Vdara residences article:

http://www.luxist.com/2010/05/06/viva-vdara-exclusive-resorts-adds-ten-new-residences-in-las-v/

"ER Members can experience shopping and dining at City Center, in the Crystals retail and entertainment district, exceptional gaming at the new ARIA Resort & Casino, and the new Cirque du Soleil production "Viva Elvis." They will also enjoy signing privileges at all Las Vegas MGM MIRAGE properties including The Mirage, Mandalay Bay, MGM Grand and the Bellagio, all connected by an indoor walkway."


----------



## TarheelTraveler

Forgot to post that ER has appealed the order in a Ca. court that its arbitration provision in its 2003 Agreement and 2010 Amendment are both procedurally and substantively unconscionable, and therefore unenforceable.


----------



## TarheelTraveler

*Ultimate Escapes Q1 earnings*

http://www.marketwatch.com/story/ul...y-may-13-2010-2010-05-10?reflink=MW_news_stmp

"Ultimate Escapes, Inc. (OTCBB: ULEI and ULEI-W) (the "Company"), one of the world's largest luxury destination clubs, today announced that it will report its first quarter 2010 results after the market closes on Thursday, May 13, 2010. 

The company will hold a conference call with investors and analysts at 4:30 PM EDT on that day to discuss the results. The dial-in number for the conference call is (888) 466-4587 -- please dial the number 10 minutes prior to the scheduled start time. A live webcast of the conference call will also be available on Ultimate Escapes' website at www.ultimateescapes.com. 

A replay of the call will be available two hours following the end of the call through midnight EDT on Thursday, May 20 at www.ultimateescapes.com and by telephone at (888) 203-1112; passcode 1064200...."


----------



## Chicagomark

*More PE/UE litigation goes away.....*

LaBella Vs PE/UE et al was dismissed with prejudice last week.......


----------



## Kagehitokiri2

Chicagomark said:


> LaBella Vs PE/UE et al was dismissed with prejudice last week.......



leaving maher and norris? wonder where the others are, like the new ER one.


----------



## TarheelTraveler

Chicagomark said:


> LaBella Vs PE/UE et al was dismissed with prejudice last week.......



Thanks for the update, CM.  I think it's great to clear some of the outstanding litigation.

BTW, if you look at the document prior to the dismissal, you'll note that the plaintiff and defendants settled the case and jointly agreed to dismiss it (rather than the court dismissing the case on its merits).  Anyone know anything about the settlement terms?

So it looks like LaBella and Sypris were both settled.  Danielson, Maher, Cheigh and Norring are all out there best that I can tell.

CM - have you ever checked for state court cases against PE, UE or any of the other clubs (other than the ones that you've noted like the ER and Quintess cases)?  I typically only check for federal cases, because it's easy and free.


----------



## Kagehitokiri2

wilkes591 said:


> If you did not notice UE did just raise in March over $5 Million from members who volunteered to pay an *extra year in dues* for additional reservation days and other benefits.



ah, by doing it this way they can avoid breaking out non-recurring income. 

Q1 GAAP >

$7,315,000 revenue incl $1,499,000 "other revenue"
($1,183,000) EBITDA 
($6,472,000) net

adjusted non-GAAP >

$8,289,000 revenue
($156,000) EBITDA
($5,498,000) net 



> Membership Deposits To Be Refunded – Members may resign from the club after 18 months and receive a partial refund of their membership fee subject to the redemption procedures identified in the Club Membership Agreements. At March 31, 2010, December 31, 2009 and 2008, the Company had 1,229, 1,214 and 922 active members, respectively.  In addition, at March 31, 2010 and December 31, 2009, there were 52 and 46 members, respectively, who had resigned.  The redemption assurance obligation (as described below) to these resigned members at March 31, 2010 and December 31, 2009 was $5,084 and $5,037, respectively, and is refundable to the respective members within the next 12-18 months in accordance with their Club Membership Agreements.





> As of March 31, 2010 and December 31, 2009, we operated a total of 135 and 141 club properties, respectively, located in various resort destinations. Of these properties, 103 and 104, respectively, are owned, and 32 and 37 are leased.



conference call - 10 minutes, no callers

previously >


Kagehitokiri2 said:


> conference call - 16 minutes and 1 caller


----------



## wilkes591

*SAD!*

Fighting for survival, while burning cash like a drunken sailor on leave! How can G&A and Salaries and Contract Labor increase? 

Looks like Capital Source is going to let UE "wind down". Collect what ever cash it can from UE, while demanding property sales to pay down the debt. Smart approach considering the alternative, Capital Source will minimize it's loss over the next year or two. The outcome is obvious, it is a matter of when. 12/31/2010 look like the next line in the sand with a $5 million payment due to Capital Source. Will Capital Source modify the loan again as on 04/19/2010? Who knows? 

What JT pulls out of a hat this time, I can only guess. Something will have to happen by October/November, either a member assessment/equity attempt or a secondary after a 10 for 1 reverse split, or UE sells enough Real Estate by 12/31/2010 to satisfy Capital Source. UE is trying to sell over $6 million in RE, so it is most likely Capital Source just continues the "wind down" and UE will lease more properties. One thing is for sure UE is spending every dollar that comes through the door. 

We will see how long it last, good luck to all!


----------



## Desties

*Steve Young*

Steve Young to the rescue?

http://www.ultimateescapes.com/syoung/

Obviously Steve Young is being compensated/comped for his endorsement in this very tricky time, but it's still good to see. This guy is carving out a sweet reputation -- in real estate investing no less -- and he is pretty public (one of the hosts during ESPN's draft coverage last month).


----------



## EOD

You have to give the clubs some credit, they have managed to stave off the inevitable for much longer than any of us predicted.


----------



## SciFrog

Welcome back EOD. Still resigning?


----------



## TarheelTraveler

wilkes591 said:


> How can G&A and Salaries and Contract Labor increase?



Isn't that because of the addition of PE employees?  In other words, higher revenue (if you exclude the assessment of last year) from the addition of PE members, but also higher property and staffing costs.  I wonder how it all balances out (i.e., whether it's a net positive or negative).  I assume positive otherwise they wouldn't have done the deal I would think.

I guess one way to look at it on a rough basis would be to say what is the additional revenue (which is primarily from the addition of PE members).  I guesstimated 1.831M of additional revenue from the financials.  And it looks like costs may have gone up $2.030M (property operating costs, lease costs, salaries and G&A)(I assume also primarily from the PE additions).  However, I assume over time, you can tweak the cost side down as you continue to merge functions and reduce staffing.


----------



## Kagehitokiri2

TarheelTraveler said:


> Received $2.3M in new capital contributions
> 
> 30% of members upgraded


unclear whether upgrades are included

also curious


Kagehitokiri2 said:


> AK discount extended through june, increase after that still a lot less than original pricing. must annoy people who joined before this...have there been any partial refunds?...discount started mid december.


----------



## wilkes591

UE is not merging functions, PE still runs out of CO and UR runs out of FL with the same functions. An accounting office in KC. Two high paid CEOs in JT and RK and a high paid CFO. Very TOP heavy with executives, COO, Chief Sales and Marketing Officer with no marketing budget, Senior VP of Business Planning, Chief Technology Office, and very heavy on executive salaries. Then UE added Directors, look at McMillian's sweet deal. Not exactly a company cutting salaries back to stay alive.

I guess the way to look at it now is what ever cash UE leaves laying around, Capital Source will want it, so just spend it. This company could make it, it is just not trying to make it. The Cash flow is the place to focus on, look at the burn rate and the cash on hand. UE will make it through the 2nd QTR and the 3rd QTR. UE will be forced to do something around October/November.

Capital Source will sit back collect the interest and fees and just let UE sell the homes and pay down the debt while UE maintains the homes and collects from the members. Depending on how UE manages the members and cash flow determines how long this can continue. 

The unbelievable part is UE is still getting new members with the PUBLIC financial statements. Clearly, the new members are not reviewing the financials. If this increases and only slightly perhaps UE will make it through the year with out a problem in October/November. Anyone resigning can forget about getting a deposit back, clearly UE does not have the money to give back. I would love to resign and get my money back, but let's be realistic.

Do any other member's see a different angle?


----------



## EOD

SciFrog said:


> Welcome back EOD. Still resigning?



Yup, Nothing changing on that front.  Of course, the act of resigning does not mean I'm ever getting out.  They really seem to be trying some innovative ideas as of late, i'll give them credit for that.


----------



## SciFrog

Yup, the company looks solid, they cull the soso homes and bring on nicer ones, communication is good, finances look good...

I have a big decision to make soon, upgrade to holidays or quit...


----------



## Kagehitokiri2

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



> The highlight of the two day event may come on the afternoon of September 1 in an event titled "Luxury Destination Clubs - Survival of the Fittest?" The brief overview describes this portion of the summit quite succinctly. "Representatives from the five remaining Destination Clubs talk openly and honestly about the outlook and challenges they face within the market."



presumably - ER UE Q AK EE 

canadian - m private residences, luxus
european - hideaways, rocksure, oyster


----------



## 3DH

Fractional Summit event website


----------



## Desties

wilkes591 said:


> I would love to resign and get my money back, but let's be realistic.
> 
> Do any other member's see a different angle?



It is a Catch-22. It would be great to resign and get our money back -- but the club would have to be healthy and actively recruiting for that to happen. And, well, if that were happening, then there wouldn't be this sole-nibbling desire to get out before it's too late.

Coming from the PE side of the merger, my plan at the time was to enjoy the club for several years but to make sure I got on the resignation list ahead of when the T&H majority could get out with money due back. 

I guess we're all in limbo now, but at least the vacations are still spectacular. The upside is that the economy does appear to be showing signs of life. The downside is that the financials are iffy and this push to go public has been a disaster. The stock hasn't traded since last Monday -- and then it was for a measly 100 shares (yep, just $185 worth of stock). The RAP Conversion plan that was supposed to take advantage of the stock has burned its participants, so the club can't tap that well again. However, the club needs to do something to get back on the investing radar. An acquisition wouldn't be enough, but it would at least be a start. Organic growth, or lack thereof, isn't going to be enough to get the shares going again.


----------



## Kagehitokiri2

*3DH*, how has EE travel been going?


----------



## 3DH

Kagehitokiri2 said:


> *3DH*, how has EE travel been going?



So far, we are very pleased... great residences, excellent service and open line of communication with everyone involved with the company! We like the new affiliation with Hideaways Club, but have yet to take advantage of any of their properties due to existing travel plans... hopefully next spring!


----------



## TarheelTraveler

Kagehitokiri2 said:


> unclear whether upgrades are included
> 
> also curious



On Kage's earlier A&K questions, I don't think member upgrades were included in the figure.  The upgrades for 30% of members consisted of higher dues (same dues as new members) for additional benefits (same benefits as new members), but not increased deposits.  The 2.3M of capital contributions would be from new members for the most part.

There was some grumbling initially at the pricing, but I think most people recognize that the buyers expect pretty significant discounts in today's real estate market.  It helped at least with me that A&K was lowering its commission as part of the effort.  I would have been happier with 30% and said the same, which is pretty much where they are going in July. As far as extending the pricing through June, there were no complaints/questions about it during the annual member meeting.

Gotcha, Wilkes.  I would've assumed that once the PE merger was done, there would be some major cost cutting.  Hopefully, that is coming.

EOD, SciFrog -  Good to hear that management is coming up with some innovative ideas.  I assume you are talking about the good PGA affiliation? So what do you think of Quintess/Tour Club exchange program?


----------



## Kagehitokiri2

glad to hear it *3DH*.



TarheelTraveler said:


> I don't think member upgrades were included in the figure. The upgrades for 30% of members consisted of higher dues (same dues as new members) for additional benefits (same benefits as new members), but not increased deposits.
> 
> A&K was lowering its commission as part of the effort. I would have been happier with 30% and said the same, which is pretty much where they are going in July. As far as extending the pricing through June, there were no complaints/questions about it during the annual member meeting.


good info.

regardless of extensions, after it ends, the price increase is minimal, and much lower than originally. ah, so moving to 30% off original.

:thumbsup: re lowered commission - just the profit?


> 12.5% for membership sales and marketing expenses
> 5% for general and administrative expenses
> 10% return or profit to A&K manager


----------



## twelve1208

*Equity Clubs*

I am currently doing some due diligence on equity based clubs.

Could someone tell me the Pro's and Con's of the various equity based models out there?


----------



## Kagehitokiri2

http://tugbbs.com/forums/showpost.php?p=886398&postcount=222
http://tugbbs.com/forums/showpost.php?p=886362&postcount=219

http://tugbbs.com/forums/showpost.php?p=883904&postcount=194
http://tugbbs.com/forums/showpost.php?p=883743&postcount=192


----------



## Kagehitokiri2

http://destinationclubnews.com/News_Destination_Club_Resales_Available_For_Steep_Discounts.php


----------



## Kagehitokiri2

http://destinationclubnews.com/News_The_Markers_Club_Africa_Poised_To_Launch.php
http://www.themarkersclubafrica.com/
"..."

ER is ending the amex plat/cent discounts.

http://www.luxist.com/2010/05/18/homewaters-club-designing-the-link-between-flyfishing-and-relig/


----------



## Kagehitokiri2

http://www.sherpareport.com/destination-clubs/sentient-ak-club-offer-0510.html



> For a one-time payment of $55,000, you will receive 10 nights in the Abercrombie & Kent Residence Club along with a $50,000 Sentient Jet Membership Plus Card.
> 
> For up to thirty days after this trial membership travel experience, a credit of $8,000 can be applied toward the price of a full Equity Membership in the A&K Residence Club.
> 
> As an example the hourly cost for a Hawker 400XP is $4,595 plus fuel surcharges and taxes. It provides seating for a remommended 5 passengers and has a range of about 1,400 miles.


(10 nights plus $3K)



TarheelTraveler said:


> New Sentient Jet Partnership was discussed -
> 
> Details from website:
> "Club members can live the lifestyle of a true jetsetter, thanks to an exclusive opportunity with Sentient Jet. Sentient pioneered the jet membership* model for private jet travel more than 10 years ago, and now Club members who purchase a $50,000 Jet Membership Plus** trial membership receive a $3,500 A&K travel credit. The credit can be used toward payment of annual Club dues or applied to your next A&K journey.This is your opportunity to fly by private jet with your family and friends and see if membership is for you.  If you’re planning a last minute getaway, Sentient can guarantee availability for your flight plan in as few as 10 hours and will provide discounts on qualifying round-trip travel to maximize your trial payment. The offer is available through July 31, 2010; the A&K travel credit can be applied through July 31, 2011.
> 
> Benefits of the $50,000 Jet Membership Plus trial include:
> 
> Guaranteed availability in as little as 10 hours, 365 days a year
> Flexibility of two years to use funds on the card
> Choice of three popular jet models (Citation X, Citation Excel, Hawker 400XP) or four size categories for each trip
> Hourly rates (before taxes and fuel) on one-way travel range from *$3,555* - $10,755 depending on category or model
> *Discounts* provided on qualifying round-trip travel
> Sentient Client Management Consultants available 24/7 to assist with any service need"


($3.5K)


----------



## TarheelTraveler

*Hideaways*

http://www.fractionallife.com/news_...h_shangrila_hotels_and_etihad_airways1129.asp


"Members of The Hideaways Club now have access to exclusive rates at Shangri-La’s luxury hotels in Singapore, Hong Kong, Bangkok, Dubai and Abu Dhabi, as well as Penang and Kuala Lumpur in Malaysia. These hotels have been specifically selected as stop-over or twin centre destinations to the properties offered by The Hideaways Club. Benefits enjoyed by the members include special discounted rates for the Shangri-La’s Horizon Club rooms, which offer a higher level of accommodation, enhanced levels of service, Club Floor check-in and check-out, all day complimentary refreshments and a personal concierge.

As a result of a new partnership with Etihad Airways, members of The Hideaways Club will benefit from exclusive Etihad fares and services including private limousine transfers to Heathrow and Manchester airports, bespoke business class fares, use of spa facilities and fine dining options at airport lounges, and automatic entry to Etihad’s frequent flyer programme, Etihad Guest."

A&K Villas is now doing villa rentals in the U.S., using the part of the RC portfolio not owned by the member's club (i.e., the ones owned by A&K versus the 10 or 11 houses owned by the members).  Rates and availability are available only upon request (presumably from the RC).  Seems like a trial in another form.

http://www.breakingtravelnews.com/news/article/abercrombie-kent-villas-launches-the-americas/


http://www.gadling.com/2010/05/22/abercrombie-and-kent-five-cinema-cations-around-the-world/

"You may not have that look that Hollywood craves, but you still want to get close to the action, right? You want to touch the greatness that comes with being splashed across screens from coast to coast. Thanks to the latest concept from luxury travel company Abercrombie & Kent, you don't need talent. The latest "cinema-cation" packages send you to the locations where some of the hottest movies of the last year or so have been shot. There are enough options that you'll definitely find something to match your personal style.

1. Sex and the City 2
After seeing this movie opening night on May 27, 2010, dash off to Morocco. A&K Group Managing Director George Morgan-Grenville was actually over there while movie was being filmed at the Amanjena Hotel and in the Djema el-Fna Square souks. The interiors and pool scenes, he says, were shot at the soon-to-open Mandarin Oriental Jnan Rahma and Palmeraie over in the foothills of the Atlas Mountains. Suggests Morgan Grenvile: "Take a camel ride at sunset and spend the night under the stars in a Bedouin-style tented camp surrounded by the largest sand dunes in the world.""


----------



## TarheelTraveler

*Exclusive Resorts*

ER's chairman Steve Case invests in internet wine website:

http://www.bizjournals.com/washington/stories/2010/05/24/daily24.html


"The AOL co-founder's Revolution LLC has taken a stake in San Francisco-based Vinfolio, an online resource that connects hard-to-find wines with buyers and sellers. Financial terms of Revolution’s investment weren’t disclosed."

...

Revolution, launched by Case in 2005, owns consumer health care company Revolution Health, credit card company Revolution Money, luxury resort and spa time-share company Exclusive Resorts and Zipcar."


----------



## TarheelTraveler

*Fractional, timeshare, destination club research study*

http://www.fraxfinder.com/archives/...-private-residence-and-destination-clubs.html

"The potential market for vacation homes, including full ownership and private residence and destination clubs, has declined substantially from 2007 levels, reflecting losses in net worth and a negative 12-month outlook for the economy and personal income among the wealthiest 10% of US households surveyed in March 2009 by The American Affluence Research Center.

...

Only 4.1% of the respondents indicated serious consideration of the acquisition of a wholly-owned second home during the next 12 months versus 9.8% in 2007. Intent to consider a time share or a private residence or destination club totals less than 1% and is essentially unchanged from 2007.

...For the destination club concept, familiarity is about 40% among the same 2 segments.

...
Among those indicating familiarity with the destination club concept, 82% did not name a brand with which they are familiar. As some brands/companies were named incorrectly, this indicates some confusion about the concept. Exclusive Resorts was the most frequently and correctly named brand, but by fewer than one in five of those naming a brand.
...

Among those indicating familiarity with the destination club concept, over half did check at least one of the listed brands as one they had heard of. This was a slight improvement over the 2007 survey. Those checking one or more brands averaged 1.6 brands, with Exclusive Resorts checked by almost two-thirds of the respondents. This is relatively consistent with Spring 2007 results. Ultimate Escapes did not have the recognition of its predecessor Private Escapes.

...

The survey respondents indicated a negative 12 month outlook for business conditions and personal household income. They also reported declines in their net worth, as a result of substantial declines in the value of their primary home and their investments/savings during the past two years. Together, these factors have contributed to a general attitude toward reducing or deferring expenditures in all areas.

The intentions to acquire a new vacation home are consistent with the overall mood of the affluent market. Over 80% of the survey respondents reported that they had made a general effort to reduce or defer expenditures during the past 12 months, would make a conscious effort to do so during the next 12 months, or had both done so in the past and would continue to do so in the future...."


----------



## Kagehitokiri2

at whatever their (low) net worth / income thresholds are.

but still, no clue how to increase awareness. the DC model (exchange free) is a huge shift from timeshare/fractional.. OTOH, dont know how long it took for those to become well known.

guess its also largely related to the economy which then revealed that so many DC business models were a question of how big a "scam." OTOH, timeshare developer sales can be a ripoff too, in the vast majority of times being unrecoverable in resale...

sigh.

something ER members should inquire about (little dix is BVI)
http://www.elitetraveler.com/news_d...i-tourist-board-opens-vip-club-airport-lounge


----------



## TarheelTraveler

http://www.ftnnews.com/content/view/9524/26/

"Banyan Tree Private Collection, Asia's first asset-backed destination club offering perpetual and transferable membership, announced the addition of two new spectacular "Own Villa "inclusions 
- a three-bedroom jet pool villa at the Banyan Tree Lijiang, China; and a two-bedroom pool villa at the Banyan Tree Phuket - further expanding its current portfolio of luxury properties worldwide.


At Banyan Tree Lijiang, the three-bedroom jet pool villa is set in picturesque Yunnan, where the majestic Jade Dragon Snow Mountain is a sacred sanctuary which has protected the ethnic minorities and their unique cultures since ancient times. The villa reflects the rich fabric of this locale through the design and furnishings. 

Bordered by the golden sands and gentle waves of the Andaman Sea, Banyan Tree Phuket is an oasis of peace and tranquility. An award-winning tropical paradise of extraordinary natural beauty, this exotic hideaway boasts only the finest facilities and ambience...."


----------



## UnhappyInCT

Desties said:


> However, the club needs to do something to get back on the investing radar. An acquisition wouldn't be enough, but it would at least be a start. Organic growth, or lack thereof, isn't going to be enough to get the shares going again.



Can anyone figure out what is going on with the recently filed securities offering by UE?

As far as I can tell this generates no new cash for the club, but does allow JT to cash out a chunk of his common stock.  As usual, he is taking care of #1


----------



## wilkes591

UnhappyInCT said:


> Can anyone figure out what is going on with the recently filed securities offering by UE?
> 
> As far as I can tell this generates no new cash for the club, but does allow JT to cash out a chunk of his common stock.  As usual, he is taking care of #1



And you are taking care of who first? No crap, JT, RK and the rest are taking care of #1. By the way so am I, I am traveling as much as I can! As UE winds down, I will ride the UE donkey until the end and then we all lose the money we gave them.

Thanks for another worthless post, just like the UE stock, that JT is selling!

If you look in the mirror that is a L on your forehead, not a wrinkle.:hysterical:


----------



## TarheelTraveler

*Phoenix Club*

Phoenix Club prepares to launch

http://www.destinationclubnews.com/News_The_Phoenix_Club_Prepares_To_Launch.php

"...We have spoken with the club and have learned that they have already received "positive responses" from over 200 former High Country Club members and will begin accepting members upon launch. At that time, The Phoenix Club will also begin reaching out to non-High Country Club members...."


----------



## TarheelTraveler

*M Private Residences*

Interesting article on M Private Residences:

http://www.sherpareport.com/destination-clubs/lower-prices-free-travel-m-private-0610.html

...M Private owns 17 homes around the world with an average value of about Can$2m each. The 145 members of this equity destination club are also the shareholders of the company which both owns and manages the homes. 

Share Price Lower 
The club has beeen lowering its share prices for two to three years, largely reflecting the drop in the real estate market. At one stage, three years ago, the 60 nights a year "C" shares were C$485,000 and after this latest change are now down to C$295,000. These share prices are the amounts that members pay to join this equity destination club. Michele Beitel, VP Sales and Marketing at M Private, said the share price now reflects the net asset value in the club. 

Annual Dues Same 
M Private has held its annual dues steady since November 2008. These dues fully cover the clubs ongoing maintenance and operating expenses. New members to M Private can currently enjoy an annual dues holiday for their first 6 months of membership - effectively giving them free travel for these 6 months...

In a complete first for the destination club sector, M Private now allows members to sell their shares to anyone. For instance members could literally put an ad in the paper to sell their shares. Members of other destination clubs are required to have the club sell their membership or shares for them."


----------



## Kagehitokiri2

biggest news - unlimited complimentary 


> The club recently changed its reservation rules to effectively allow free travel within the 30 day space available window.



also interesting


> Members can also assign their membership to others for a period of time. For instance if a member knows they aren't going to travel for a year or two, they can assign their membership to a friend or relative for them to pay the dues and travel with the club.



180k > 147.5k
275k > 225k 
360k > 295k 
(-18%)


----------



## Kagehitokiri2

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


> For the first ten memberships, four of which have already been sold, half price annual fees for the first year of membership will be offered



http://www.sherpareport.com/single-family-homes/funding-fractional-0610.html
seriously?


----------



## travelguy

Kagehitokiri2 said:


> [url]http://www.sherpareport.com/single-family-homes/funding-fractional-0610.html
> seriously?



It's like pawning your investment portfolio for a vacation!  

Nothing better than leveraging up the vacation portfolio.


----------



## Kagehitokiri2

Kagehitokiri2 said:


> 180k > 147.5k
> 275k > 225k
> 360k > 295k
> (-18%)



http://destinationclubnews.com/News_M_Private_Residences_Decreases_Share_Prices.php


> discounted by roughly 18%, an amount which Beitel confirmed is the approximate decline the total property values have seen in recent years.
> 
> a new residence will be joining the portfolio, scheduled for August


----------



## TarheelTraveler

http://www.travolution.co.uk/articl...er-the-return-of-conspicuous-consumption.html

Interesting comments from Geoff Kent about A&K's Residence Club and travel business in general:

"...Its CEO Geoffrey Kent was in fine form at the recent WTTC summit in Beijing, noting that "business is surprisingly vibrant" with revenues up 20% over the last few months. 

Obviously some lines of business are doing better than others. According to Mr Kent his European Villa business is up a staggering 50% as wealthier clients look to book what he describes as a proper inter-generational holiday.

This chimes with my own experience - travellers want a quality place to visit where they can bring the kids and the grandparents and still get some good service without being stuck in a hotel.

The underlying story here is, I would suggest, a redefinition of the accommodation and hospitality model away from the standardised experience to something much more bespoke.

Business also seems to be booming in three other fascinating segments - occupancy on Abercrombie and Kent's brand new Antarctic cruises is close to 95%-98% at the moment, reminding us that wealthy travellers will pay for a unique experience that reconnects with wilderness and nature in a non-intrusive way.  

Business also remains strong in luxury safaris and camps where travellers get "out and about" and have personal experiences that range from a one-on-one guided tour through to micro-lighting over the Victoria Falls.

Crucially, Abercrombie and Kent is experiencing rapid growth in demand from wealthy travellers in the BRIC countries. Kent suggested that even planning for 20% capacity from countries such as Brazil and China is not going to be enough.

Demand for his companies new Yangtze cruises is booming, even with locals, and the Indian market is apparently lapping up luxury European villas.

Business is also brisk in new markets such as Syria and Lebanon as well as slightly more established destinations such as the Galapagos Islands. In fact all the places you'd expect to see featured in the FT Weekend How to Spend It magazine. 

Yet it was one last throwaway comment from Kent that I think gave the biggest insight into future luxury travel trends. Discussing the brand's new Destination Club, he suggested that the most exciting aspect of the service is the Global Experiences Manager.

The role is akin to the holistic financial planner or private wealth banker. The advisor works with the client over the long term to figure out a range of experiences.

It may be European villas while the kids are young but then Antarctic Cruises once the kids have flown the nest - holiday choices change over time and with personal experiences.

The key insight here is that many consumers are confused by the world of choice and want experts to help them navigate their complex life journey. 

What they need is an expert who can sit down with them and give them great advice and offer exclusive access to products.

This is of course exactly what our trusty local travel agent should be doing (and in some cases has been doing, with great success).

But I'd suggest that too many travel agents, like investment based IFA's or wealth advisers, have been captured by channel and product push. Too much time is spent funnelling product down the line whilst appearing to cater for the consumers' special needs.

Channel has trumped personal attention in the value relationship. What Abercrombie and Kent's model is suggesting is that high end customers will pay for proper, holistic planning where the consumers’ interests are paramount...."


----------



## TarheelTraveler

*Ultimate Escapes*

http://www.sec.gov/Archives/edgar/data/1402364/000114420410032786/v187930_rw.htm

Ultimate Escapes has officially withdrawn its registration from earlier this year (January 15) for the potential public offering for its stock.


----------



## UnhappyInCT

TarheelTraveler said:


> http://www.sec.gov/Archives/edgar/data/1402364/000114420410032786/v187930_rw.htm
> 
> Ultimate Escapes has officially withdrawn its registration from earlier this year (January 15) for the potential public offering for its stock.



I think this was an administrative formality so that the Jan 15 filing could be shut down to allow for the implementation of the recent filing made on June 4.


----------



## AKTHUE

*Ultimate Escapes June 4 S-1*



UnhappyInCT said:


> I think this was an administrative formality so that the Jan 15 filing could be shut down to allow for the implementation of the recent filing made on June 4.



Here is the June 4 filing:
http://www.sec.gov/Archives/edgar/data/1402364/000114420410031992/v187261_s1.htm

It does not appear to result in any cash being raised by the company, it just registers shares to be issued on conversion of warrants and the preferred stock held by JT

There is an amortization payment of $10.3 million due to CapitalSource on June 30. The loan was amended on April 19, 2010 with this amortization payment due, so CapitalSource won't be too happy or flexible if there is a default 75 days later. 

Any word of how UE will pay that or whether they have been able to buy another extension? They only had $4.7 million in cash as of 3/31, of which $2.9 million was restricted (Capital Source requires an interest reserve). There is no discussion in the S-1 as to how the June 30 amortization payment is to be made or any arrangements to extend the due date.

The revenue discussion on page 29 discloses that the increases in annual dues and membership fees in 2010 vs. 2009 are due to the fact that the Private Escapes merger only closed in Sept (so they did not recognize/consolidate the PE numbers in 2009). So they did not sell any new memberships.

Revenue in Q1'10 was $7.3 million, opex was $11 million, interest expense was $3 million, with a total net loss of $6.5 million.  $2.2 million of expense was depreciation and amortization, which is non-cash but eventually properties need to be maintained. This is not a stable business. 

$2.75 million of properties were sold in Q1'10.

JT was paid salary of $316,000 in 2009, Richard Keith $335,000 and Phil Callaghan $261,000. Oct 29, 2009 JT entered into an employment agreement providing for a new salary of $450,000 with an annual 10% increase, minimum bonus of 10% up to 100%, $25,000 car allowance, and essentially promises a 1-year severance payment if terminated. RK's new salary is $375,000, and Callaghan's is also $375,000. Nice to see management demonstrating leadership in managing costs to the employees and members to get the club through tight times.

The auditors have a qualified opinion _"raise substantial doubt about the Company’s ability to continue as a going concern"_


----------



## Kagehitokiri2

AKTHUE said:


> Any word of how UE will pay that or whether they have been able to buy another extension?
> 
> Revenue in Q1'10 was $7.3 million
> 
> net loss of $6.5 million
> 
> $2.75 million of properties were sold in Q1'10


at least one non-recurring so far this year >


wilkes591 said:


> If you did not notice UE did just raise in March over $5 Million from members who volunteered to pay an extra year in dues for additional reservation days and other benefits.


done via "dues" so you cant break it out

hope theyre able to sell those other properties theyve got listed


----------



## AKTHUE

Kagehitokiri2 said:


> at least one non-recurring so far this year >
> 
> done via "dues" so you cant break it out
> 
> hope theyre able to sell those other properties theyve got listed



If they raised the $5 million before the end of March, it is already counted in the 3/31 balance sheet, and won't help with the 6/30 amortization payment. They may have used some of it to pay a fee to CapitalSource for the 4/19 loan amendment. 

If JT wasn't able to sell properties, the well may be dry for making the 6/30 payment.


----------



## Kagehitokiri2

http://www.sherpareport.com/destination-clubs/destination-club-turks-caicos-0610.html
AK is only club to have villa in turks & caicos
they dropped the 2nd one?

speaking of turks & caicos
http://www.parrotcay.como.bz/villa-ownership-
updated with expansion offerings 
$2.25MM per acre for beachfront lots
$5MM 2BR beach house
$10MM 3BR villa on 1.5 acres

http://www.amanyaravillas.com/#/villa_plans
also updated, seems to be down to 3


----------



## TarheelTraveler

Kagehitokiri2 said:


> http://www.sherpareport.com/destination-clubs/destination-club-turks-caicos-0610.html
> AK is only club to have villa in turks & caicos
> they dropped the 2nd one?
> 
> speaking of turks & caicos
> http://www.parrotcay.como.bz/villa-ownership-
> updated with expansion offerings
> $2.25MM per acre for beachfront lots
> $5MM 2BR beach house
> $10MM 3BR villa on 1.5 acres
> 
> http://www.amanyaravillas.com/#/villa_plans
> also updated, seems to be down to 3



AK dropped the villa next door that was leased with an option to buy.  They kept the one they designed, with the exercise facility, and purchased.  Basically rationale was one of two villas was usually booked at any one time, but rarely both.  With demand picking up, it wouldn't surprise me if, however, they revisited this down the road or perhaps they'd try to add another Caribbean destination instead.  Based on member call, New York and Florida are destinations to be worked on next.

The Aman villas are very cool.  Thanks for the link.  From what I understand, the downside for a lot of folks is the remoteness of their location.  We've thought about going out there for dinner a few times, but didn't want to make the trek.


----------



## NeilGoBlue

I think it's worth the trek at least to check it out and have dinner..


----------



## TarheelTraveler

How's the food?


----------



## wilkes591

AKTHUE said:


> Here is the June 4 filing:
> http://www.sec.gov/Archives/edgar/data/1402364/000114420410031992/v187261_s1.htm
> 
> 
> There is an amortization payment of $10.3 million due to CapitalSource on June 30. The loan was amended on April 19, 2010 with this amortization payment due, so CapitalSource won't be too happy or flexible if there is a default 75 days later.
> 
> Any word of how UE will pay that or whether they have been able to buy another extension? They only had $4.7 million in cash as of 3/31, of which $2.9 million was restricted (Capital Source requires an interest reserve). There is no discussion in the S-1 as to how the June 30 amortization payment is to be made or any arrangements to extend the due date.



Here is the part you left out from the 10Q:

"However, the maximum loan amount was reduced to $95,093. In addition, revised minimum loan amortization amounts have been established that require cumulative amortization of $10,300 by June 30, 2010 and $17,800 by December 31, 2010, with the remaining balance due on April 30, 2011 if we do not elect an extension.  If we exercise the first one-year extension, then cumulative amortization must be $22,800 by June 30, 2011 and $25,300 by December 31, 2011, with the remaining balance due on April 30, 2012 if we do not exercise the second extension.  If we exercise the second one-year extension, then cumulative amortization must be $27,800 by June 30, 2012 and $30,300 by December 31, 2012, with the remaining balance due by April 30, 2013."

So, UE has extensions until 2013. CapitalSource will let them SELL the properties and wind down. If you are a member in good standing you know which ones are already pending. It is very sad, what management is taking as salary and benefits and not even trying to save the company. 

Keep on saying the end is near, eventually U will be right. As for 6/30/2010, please learn how to read a Financial Statement. This process will take a few years, CapitalSource is not going to sell these properties in FORECLOSURE. They will let the member's pay the dues, maintain the properties, and UE will eventually be a club of leased properties. Once Management and CapitalSource has squeezed everything out of the existing Real Estate, then you can say the end is near.

Until then safe travels!


----------



## AKTHUE

wilkes591 said:


> revised minimum loan amortization amounts have been established that require cumulative amortization of $10,300 by June 30, 2010 and $17,800 by December 31, 2010, with the remaining balance due on April 30, 2011 if we do not elect an extension.  If we exercise the first one-year extension, then cumulative amortization must be $22,800 by June 30, 2011 and $25,300 by December 31, 2011, with the remaining balance due on April 30, 2012 if we do not exercise the second extension.  If we exercise the second one-year extension, then cumulative amortization must be $27,800 by June 30, 2012 and $30,300 by December 31, 2012, with the remaining balance due by April 30, 2013.
> It is very sad, what management is taking as salary and benefits and not even trying to save the company.



I can read statements but I skipped the word cumulative.

Do you have any idea how much of the $10.3 million cumulatively due June 30 has been paid down? The S-1 only lists about 8 or so properties as held for sale.

Agree on what management is paying themselves.


----------



## travelguy

From UE E-mail today (6/16/10):

_MEMBERS ASKED. WE LISTENED. 
Our Members want more residence availability to vacation where they want, when they want. Ultimate Escapes has responded by adding access to 27 NEW RESIDENCES and TWO NEW DESTINATIONS to our already robust club residence portfolio. 

Members will see increased availability through an expanded selection of residences in the Premiere, Signature and Elite Clubs. New residences are located at classic ski resorts such as Telluride, Lake Tahoe and Beaver Creek, and at popular beach destinations including Turks & Caicos, Key West and St. Thomas. 

Members will also have the opportunity to vacation in two new exciting destinations: Clearwater Beach, Fla., and San Diego, Calif. Each of these additional destinations will meet the high-standards of luxury, amenities and service that Ultimate Escapes is committed to providing its Members. _


----------



## wilkes591

AKTHUE said:


> I can read statements but I skipped the word cumulative.
> 
> Do you have any idea how much of the $10.3 million cumulatively due June 30 has been paid down? The S-1 only lists about 8 or so properties as held for sale.
> 
> Agree on what management is paying themselves.




Nope, no more then any other member. I just know, like everyone else that UE is selling the properties and Capitalsource is getting the cash at closing. CapitalSource is happy to let UE do this and Management is happy doing this and collecting their salaries.  

Whatever it is UE has the extensions, which is what really matters and also skipped. Any way even if UE did not, what is CapitalSource going to do? The properties sold via FORCED sales would get pennies on the dollar. This is an orderly wind down with management cooperating with Capitalsource, if UE needs more time to sell the properties, they will get it.

It will take about two years to sell all the "good" properties, then when only the distressed property is left like Lake Las Vegas and others, the end will be near.


----------



## wilkes591

travelguy said:


> From UE E-mail today (6/16/10):
> 
> _MEMBERS ASKED. WE LISTENED.
> Our Members want more residence availability to vacation where they want, when they want. Ultimate Escapes has responded by adding access to 27 NEW RESIDENCES and TWO NEW DESTINATIONS to our already robust club residence portfolio.
> 
> Members will see increased availability through an expanded selection of residences in the Premiere, Signature and Elite Clubs. New residences are located at classic ski resorts such as Telluride, Lake Tahoe and Beaver Creek, and at popular beach destinations including Turks & Caicos, Key West and St. Thomas.
> _



This is the Financial Fantasy Island that management is living on! UE has just enough cash on hand to meet current obligations. Let's go out and hire more executive staff like a COO while we got two CEO's and many another execs. Now let's pretend we have a bunch of 4 month seasonal leases and let the member make reservations, *BRILLANT*. UE is taking reservations, but does not have the leased properties yet. They are all going to be short term leases increasing operating expense and decreasing cash flow. Perhaps the end is closer then I think.


----------



## NeilGoBlue

TarheelTraveler said:


> How's the food?



It was good. (not phenomenal) Very expensive.  But we were blown away by the architecture and the design of the resort.


----------



## AKTHUE

wilkes591 said:


> This is the Financial Fantasy Island that management is living on! UE has just enough cash on hand to meet current obligations. Let's go out and hire more executive staff like a COO while we got two CEO's and many another execs. Now let's pretend we have a bunch of 4 month seasonal leases and let the member make reservations, *BRILLANT*. UE is taking reservations, but does not have the leased properties yet. They are all going to be short term leases increasing operating expense and decreasing cash flow. Perhaps the end is closer then I think.



Perhaps the announcement is intended to encourage a batch of members to pay/renew dues, or buy more advance reservations and/or to distract from the reality of sales of owned properties.


----------



## UnhappyInCT

wilkes591 said:


> This is the Financial Fantasy Island that management is living on! UE has just enough cash on hand to meet current obligations. Let's go out and hire more executive staff like a COO while we got two CEO's and many another execs. Now let's pretend we have a bunch of 4 month seasonal leases and let the member make reservations, *BRILLANT*. UE is taking reservations, but does not have the leased properties yet. They are all going to be short term leases increasing operating expense and decreasing cash flow. Perhaps the end is closer then I think.



This is exactly what happened during Tanner & Haley's final days / months / years.  Unfortunately for me there were no publicly available financial statements and no bulletin boards like this one to scare me away from what turned out to be an investment in a ponzi scheme.


----------



## travelguy

UnhappyInCT said:


> This is exactly what happened during Tanner & Haley's final days / months / years.  Unfortunately for me there were no publicly available financial statements and *no bulletin boards like this one *to scare me away from what turned out to be an investment in a ponzi scheme.



Just imagine what the action would be like on DC4MS if it was still around!


----------



## TarheelTraveler

travelguy said:


> Just imagine what the action would be like on DC4MS if it was still around!



While the debates and dialogue got ridiculous at points, it was definitely a heck of a lot more interesting.  At least the UE comments keep things somewhat interesting for better or for worse.

Interesting article which makes some really good points:

http://www.travolution.co.uk/articl...s-fractional-ownership-the-new-timeshare.html

"Another alternative might start taking shape over the next few years, one which both tour operators and agents might want to think about engaging with. 

Last week in this column on I mentioned Geoffrey Kent of Abercrombie and Kent's successful Residence Club model. In passing I mentioned that business was brisk but I probably understated its importance - for Mr Kent this is a big part of his future. 

According to the Abercrombie and Kent founder, as people come out of this recession they are "analysing seriously their second homes" and opting for a pooled or fractional ownership model a la his destination Club. 

It is by far his "hottest and biggest" product, and apparently uptake of the $300,000-plus service in the first few months of 2010 has already exceeded the total for 2009.

This buzz is echoed by one of Mr Kent's former business partners, David Rogers at a company called Rocksure. 

The travel industry veteran is now pioneering a fascinating model which involves wealthy types such as accountants, lawyers and CFOs investing between £50,000 and £200,000 in a range of property syndicates that then buy into a pool of luxury, serviced villas around the world.

This equity based model is similar to The Hideaways Club but marketed at a slightly more humble crowd, and with a clearer syndicate ownership structure.  

Moving further down the wealth ladder we'll also see a profusion of fractional ownership structures emerge in the next few months. Some will be based on something approaching the old timeshare model, others the Rocksure ownership model, and yet more closer to the Holiday Property Bond model, where there's no direct link between the investment and the properties but the backing of a general insurance bond (business is booming here as well).

Middle class consumers want some choice in the range of properties they can access, as well as proper service when they get there, plus some sense that this is an investment in an expensive product which isn't entirely being flushed down the drain.

The fractional ownership sector is certainly limbering up to supply this demand, in part because the fears surrounding the old timeshare model are fast fading away but also because the real estate industry now has a glut of properties it is looking to shift using innovative new financial models.

The pitch is also increasingly simple - give us between £20,000 and £50,000 and we'll give you access to a range of serviced, well maintained properties in which you also have some investment potential.

The actual model might be a hotel club or the Rocksure full equity ownership model - both have a place but the missing ingredient is the channel. Who's going to sell this product? 

Step forward the existing travel industry chains and operators. Many were undoubtedly burnt by the time-share disasters of old but a huge opportunity awaits for those with the right brand, and the right product set.

Provide me with a model where my accommodation money is not seen as a wasted expenditure but a potential investment for the future, and give me excellent service and I'd suggest there are hundreds of thousands of potential customers out there, many flushed with cash from having sold their second homes...."

I tend to agree with the author that there is a serious need for an equity destination club from a major travel player in the timeshare/step up from timeshare segment ($20-100K rather than in the $200K-400K space).  Like HCC but with major backing and actual member ownership in the properties.

Intrawest had the potential and interest in doing this, but seemed to get waylayed by their own debt and financial issues.

UE has the three levels, which in my opinion makes a lot of sense.  Get people in the door at a lower price and then they'll likely upgrade once they realize how enjoyable the travel is, but obviously, UE is non-equity and has had some serious issues which would certainly discourage a member from plunking more money down.

Marriott seems to be moving in the equity DC direction with their supposedly soon-to-be-announced points based system and a trust ownership concept for the timeshares similar to the Ritz-Carlton DC model that they released last year.   Best part of that model for the traveler in my opinion is the ability to trade up or down based on need and type of vacation (from a hotel room at a Fairfield to a timeshare condo to a Ritz-Carlton hotel room or condo).  But it's also great for Marriott, as you're much more likely to use them for all of your lodging needs, instead of using a competitor like Hilton.  Of course, the devil will be in the details, and we'll see how it gets implemented for existing and future owners.


----------



## Kagehitokiri2

Q on the web >

http://twitter.com/quintessclub
http://www.flickr.com/photos/quintesslrw/
http://www.facebook.com/QuintessClub
http://www.youtube.com/user/QuintessLRW
http://quintess.com/membership/m910

 8K ft2 @ meadowood napa


----------



## Kagehitokiri2

*LTTravel* was always raving about avis chairman as ER benefit.

20 available for $1200 and lasts through july 2011 >
https://dailygetaways.discoveramerica.com/OfferDetails.aspx?pid=3dbb1B2b-2aa1-478b-bc36-5bbd838f5c88

also, 50% off $50/$100/$150 alamo rental
https://dailygetaways.discoveramerica.com/OfferDetails.aspx?pid=33f12042-607a-4927-a9e6-545fca5dc0c8

https://dailygetaways.discoveramerica.com/Default.aspx
https://dailygetaways.discoveramerica.com/OffersList.aspx


----------



## TarheelTraveler

TarheelTraveler said:


> Marriott seems to be moving in the equity DC direction with their supposedly soon-to-be-announced points based system and a trust ownership concept for the timeshares similar to the Ritz-Carlton DC model that they released last year.   Best part of that model for the traveler in my opinion is the ability to trade up or down based on need and type of vacation (from a hotel room at a Fairfield to a timeshare condo to a Ritz-Carlton hotel room or condo).  But it's also great for Marriott, as you're much more likely to use them for all of your lodging needs, instead of using a competitor like Hilton.  Of course, the devil will be in the details, and we'll see how it gets implemented for existing and future owners.



Anyone read enough of the Marriott threads to know whether under their new points program, you can get into the Ritz-Carltons from the timeshares, or conversely from the RC DC into the timeshares?


----------



## Kagehitokiri2

regardless of anything else, that would kill RC sales, and marriott is not that stupid (moving to points etc)


----------



## TarheelTraveler

Kagehitokiri2 said:


> regardless of anything else, that would kill RC sales, and marriott is not that stupid (moving to points etc)



I'm not sure that I follow you.  So long as the pricing of the points is correct, it seems like you could allow that flexibility (for example, you might have to trade in 3 weeks at a Marriott timeshare to get the Maui RC for 1 week, but it seems like you could make it work).  I know that I wouldn't mind having the flexibility in staying on occasion at a Marriott instead of an RC, if I were an RC DC member, particularly if the Marriott were in a location where there wasn't an RC.  Would your concern be availability in the RC DC?  I guess you'd need demand in both directions, and you'd have to watch and manage things pretty closely to make it work.


----------



## Kagehitokiri2

you cant even begin to compare TS maintenance fees with DC fees. 3 > 1 doesnt even come close.

although like you i have not looked at exactly how theyre doing point pricing for new sales, or what theyre doing with current members.

additionally the DC is just unsold fractional inventory. i mean, theoretically, what happens if they sell it..? some very very strange stuff.

http://destinationclubnews.com/News_Changes_Atop_The_Oyster_Circle_Executive_Tree.php
oyster CEO leaves company.


----------



## Desties

*A&K Price Hike*

Is the industry gradually turning the corner?

A&K will apparently be inching its prices higher for new members next month.

Is it the real deal or just a way to smoke out prospective leads?


----------



## TarheelTraveler

Desties said:


> A&K will apparently be inching its prices higher for new members next month.
> 
> Is it the real deal or just a way to smoke out prospective leads?



I think both.  In other words, they committed to raise the price on that date (and not extend).  And price increases have been used by every DC across the industry to get people to commit.  It seems like you particularly want to use that if you've gotten a bunch of trial members to give them an incentive to become equity members.


----------



## Kagehitokiri2

am i the only one that finds the "inch" purely symbolic?


----------



## TarheelTraveler

It's definitely not a big increase.  I personally thought the 40% discount was too big to begin with, but got OK with it given A&K dropped its commission significantly.  The new pricing is still pretty darn good, and I'm not sure how much you can raise prices in this kind of economic environment.


----------



## Kagehitokiri2

TarheelTraveler said:


> It's definitely not a big increase.  I personally thought the 40% discount was too big to begin with, but got OK with it given A&K dropped its commission significantly.  The new pricing is still pretty darn good, and I'm not sure how much you can raise prices in this kind of economic environment.



hmm, so its also about "right sizing" the discount. have these things been part of discussion with members?


----------



## TarheelTraveler

Kagehitokiri2 said:


> hmm, so its also about "right sizing" the discount. have these things been part of discussion with members?



I know a few members including myself expressed to management the thought that the discount was too big, but I got comfortable with it given the commission reduction piece which they did not have to do at all (but did for the members).  I feel like the pricing in July is probably more reflective of the real estate market.


----------



## Kagehitokiri2

http://destinationclubnews.com/News_Equity_Estates_President_Adam_Capes_Appears_On_Fox_Business.php



> Adam Capes, President of Equity Estates, appeared on Fox Business on Wednesday of this week to discuss his equity destination club, comparing the structure to one of the most widely known vacation options available: timeshares.
> 
> "I think I get what you are doing. It is kind of like timesharing, isn't it?" began Host David Asman.
> 
> "It's a little different from timesharing, David, because our homes are private villas and residences in some of the most sought after destinations around the world and generally $3 million homes on average," Capes replied. "Our owner members can go to the properties really whenever they want based on availability, which is very high in our portfolio."
> 
> Fox Business goes as far as describing the short interview as "Equity Estates President Adam Capes on how he is revamping the idea of a timeshare."
> 
> "Our owner members have made an investment that is a small fraction of the price of what they would pay if they were buying any one of these individual homes. The annual dues they pay are a shared cost of the expenses of maintaining these homes and all the services we offer."



may 17 article 
http://smallbusiness.m.foxbusiness.com/quickPage.html?page=20967&content=38556861&pageNum=-1

on jun 23 about 90 seconds  
http://video.foxbusiness.com/v/4250961/profitable-getaways/
at least they got their name out there. as usual for EE no mention of "destination club" which im not sure about.


----------



## Desties

*EE on FOX*

Any publicity is good publicty, so kudos to EE.

I wouldn't read too much into the lack of "destination club" usage. It was a short segment, and I'm sure Capes would have gotten to it, in time.

The brevity of the segment likely kept him from clarifying the investment-related nature of the initial deposit -- the real winner in the equity club model -- because the segment made it seem as if it's a non-recoverable cost.


----------



## Kagehitokiri2

Desties said:


> I wouldn't read too much into the lack of "destination club" usage. It was a short segment, and I'm sure Capes would have gotten to it, in time.



http://www.fraxfinder.com/archives/...s-and-philip-mekelburg-of-equity-estates.html



> It’s important, especially in this day and age, to know first what Equity Estates is NOT,” says Adam Capes, co-founder and President of Equity Estates. “*It is NOT a destination club*!  Nor is it a REIT – a real estate investment trust. Rather, it is a Luxury Residence Fund."


----------



## travelguy

Agreed that any publicity is better than no publicity .... BUT ... the takeaway I got from that 90 secs is that EE costs $200K - $600K plus $10K/yr for 15 nights in very nice homes (and something about investment).

I'm not sure that it's productive to try and explain the virtues of a complicated luxury use/investment like this in a sound-byte.


----------



## Kagehitokiri2

agreed.

actual details from article


> For accredited investors, the membership interests range from Executive to Elite to Advantage, with an initial investment of $197,500, $375,000, and $545,000, respectively. Executive memberships have average annual dues of $9,250 with a 15-night usage allotment. Elite membership annual dues average $16,500 with a 30-night allotment. Advantage members pay $24,750 in annual dues and can use the properties for up to 45 nights.



http://destinationclubnews.com/News_Exclusive_Resorts_Adds_New_Properties_In_Steamboat_Springs.php
says for 2010 ER has added 10 vegas, 5 steamboat, 1 tuscon (anguilla is last pending)


----------



## Kagehitokiri2

http://www.beguelin.com/2008/09/flavia-hack.html
what espresso machines does Q have now? and/or other DCs?

recently heard someone rave about the ones in-room at le gray hotel in beirut >
http://www.illyusa.com/webapp/wcs/s...es_jura-capresso-impressa-superautomatic-E412 (jura $3299)
(while simultaneously criticizing nespresso [pods])


----------



## TarheelTraveler

Kagehitokiri2 said:


> http://www.beguelin.com/2008/09/flavia-hack.html
> what espresso machines does Q have now? and/or other DCs?
> 
> recently heard someone rave about the ones in-room at le gray hotel in beirut >
> http://www.illyusa.com/webapp/wcs/s...es_jura-capresso-impressa-superautomatic-E412
> (while simultaneously criticizing nespresso)



A&K uses the illy IIRC (but not the same one pictured in the link).


----------



## Kagehitokiri2

pod or not?

http://www.illyusa.com/webapp/wcs/stores/servlet/subcat_machines_machines_espresso-machines
pod $295 > $1975
non pod $380 > $3299

id imagine as DCs grow (or ER now) could get pretty good discounts on bulk buys of these kinds of things

from Q newsletter  http://quintess.com/news/q2_2010/1


> opening a third villa at La Samanna...expected to be available for Member stays around Thanksgiving of this year and we will follow up again when we are ready to begin the lottery for this popular destination.
> 
> We had 34 Quintess Members request dates for the first six TOUR CLUB destinations and all Members were granted their choice of destinations and dates, accounting for 120 nights in total.
> 
> Adding new Molton Brown bath products to Club homes and increasing the bottle size to 1.7oz, approximately double what we had previously
> 
> [options for each referral >]
> - A seven-night complimentary Advance stay in any Quintess or TOUR CLUB residence
> - A $10,000 credit toward any TOUR CLUB Extraordinary Experience...or a three-day all-inclusive Golf School at any PGA TOUR Academy
> - The ability to carry over up to seven Base Plan nights into your next membership year
> - The ability to reduce usage of up to seven Base Plan nights into your next membership year
> - The Club will donate seven nights to the charity of your choice.



http://destinationclubnews.com/News_The_Phoenix_Club_Outlines_Major_Obstacles.php


> "The poor reputation that High Country Club left behind and our constant association with them is one of our chief concerns," said the club. "We must reiterate that we are a completely separate entity."


genius.

will be interesting to hear how they and bourne are doing...


----------



## TarheelTraveler

Kagehitokiri2 said:


> pod or not?
> 
> http://www.illyusa.com/webapp/wcs/stores/servlet/subcat_machines_machines_espresso-machines
> pod $295 > $1975
> non pod $380 > $3299
> 
> id imagine as DCs grow (or ER now) could get pretty good discounts on bulk buys of these kinds of things



I believe that we have the X7 units (or something similar).  All of ours were purchased at one time when A&K took over.

Interesting Q newsletter linked.  As noted in the newsletter, social media is definitely becoming important.  A&K's and A&K RC's Facebook presence has mushroomed pretty quickly.  I wonder if any of them are seeing any sales from it though.  I guess at a minimum it provides a way to connect to members and friends of the Club.

Seems like an entry level DC is a no-brainer.  Just wish there was an established brand behind one of them.  Would make adoption a lot easier.


----------



## Bourne

Kagehitokiri2 said:


> will be interesting to hear how they and bourne are doing...



To gain traction, the two core requirements were adequate funding and member trust. The funding is now in place with properties, website and rez system lined up. That was the easy part. Now the club has to gain member trust. 

Is the final offering what I envisioned with Paragon? Relatively close but not the same.  Is it something I am comfortable with? Yes. Is the new system more financially stable? Yes. 

More to come...


----------



## travelguy

Bourne said:


> To gain traction, the two core requirements were adequate funding and member trust. The funding is now in place with properties, website and rez system lined up. That was the easy part. Now the club has to gain member trust.
> 
> Is the final offering what I envisioned with Paragon? Relatively close but not the same.  Is it something I am comfortable with? Yes. Is the new system more financially stable? Yes.
> 
> More to come...



Bourne

I lost track of this somewhere along the line ... Are you involved in just Paragon or also part of Phoenix?  Or are some of the backers the same in both clubs?

I also lost track of who ended up with the HCC properties out of CH7.  Can you enlighten us?

Thanks and good luck.


----------



## Kagehitokiri2

http://tugbbs.com/forums/showpost.php?p=904547&postcount=21

$588,500 - 74 Cresta Road, Unit 306, Arrowhead Village/Beaver Creek, CO [2BR] - eagle - 04/13/2010 ROBERT OWEN DICKEY 6738 GLENDORA AVE DALLAS, TX
$517,000 - 120 Tip Top Trail, Unit 6537, Keystone, CO [3BR TH-style] - summit - "120 tip top trl 6537 C"
$722,700 - 65 The North Road, Breckenridge, CO [4BR SFH] - summit - "65 north rd b"
$429,000 - 1111 Forest Trail, Unit 1121, Mammoth Lakes, CA [2BR] - mono
$418,000 - 1470 Masters Boulevard, Unit 311, ChampionsGate (Orlando), FL [3BR] - osecola
($2,675,200)

http://www.sheldongood.com/index.php?page=caseStudies
"SOLD AT AUCTION: $4.3 million"

wonder whats going on with these. 4.3 - 2.7 = $1.6mm 
- 1600 Broadway, Unit 10E, Times Square, New York, NY [1BR] - 6/15/10 peter c derosa 7 redbud lane greenbrook, NJ
- 2006 Costa Del Mar Road, Unit 2, Carlsbad, CA [2BR] - san diego


----------



## travelguy

I should have been more specific in my question.  I was interested in the HCC properties that were "outside" of the CH 7 sale (never made it to the Sheldon Good auction).  

At one time, I believe there were three parties that had plans to use these other HCC properties (I'll call them the "prime" properties) in some type of reorganized DC plan.  There was the HCC investor (Phoenix), Bourne (Paragon) and the RE partners of HCC that owned several properties (OBX, TCI, Cabo, etc.).  IIRC - There was discussion of several incarnations of these properties being used in clubs and/or combinations of ownership/backing/operation.

My question is really what happened to these other "prime" properties and what the current incarnation of potential DCs (Paragon & Phoenix) are made up with (properties, backing and operations).


----------



## Bourne

1. Phoenix has rights to the "other properties" with an agreement worked out on some of the "Sheldon Good" properties wherever possible. 
2. The new club brings together all the three groups mentioned in the previous post.


----------



## Kagehitokiri2

Bourne said:


> The new club brings together all the three groups mentioned in the previous post.


wow. im impressed. keep hope alive?


----------



## TarheelTraveler

Bourne said:


> 1. Phoenix has rights to the "other properties" with an agreement worked out on some of the "Sheldon Good" properties wherever possible.
> 2. The new club brings together all the three groups mentioned in the previous post.



Impressive that the three groups have gotten together.  So who's in charge and when does the new club launch?  Is it an equity club, at least as to new member deposits?  Any thoughts about how Marriott's changes effects Phoenix?


----------



## travelguy

Info on Phoenix Club: Phoenix Club Website

Pics on properties are exactly the same as HCC properties.  Maybe they bought the intellectual rights from HCC also??

Membership starting at $10K.


----------



## Kagehitokiri2

$10K > $80K ($25K > $80K 75% refundable)

and these deposits support portfolio expansion?

no info on points yet, other than "During the off-season, the points can value as much as two to three times more vacation time"

price per point (annual / additional)
1.13 / 1.30 
1.08 / 1.20
1.05 / 1.10
0.91 / 1.00


----------



## cattledog

*Points?*

Bourne or Others - Any indications on Phoenix Club what 'point' costs will be for various properties at various times of year?  I looked on the website and did not see any information.  Thanks.

Cattledog


----------



## Kagehitokiri2

http://www.luxist.com/2010/07/10/carrie-underwoods-wedding-takes-over-georgia-ritz-carlton/
carrie underwood buys out RC reynolds, closes road to hotel on wedding day
http://www.ultimateescapes.com/Destination.aspx?DestinationID=107
any UE members there?


----------



## Kagehitokiri2

hideaways adds ibiza and algarve might be in EE exchange at some point
http://destinationclubnews.com/News_The_Hideaways_Club_Adds_New_Residence_In_Ibiza.php
http://www.sherpareport.com/destination-clubs/hideaways-club-ibiza-portugal.html

interesting re ER >
http://destinationclubnews.com/News_Exclusive_Resorts_Finalist_For_Best_Company_To_Work_For.php

Q has updated pricing info
more straight forward, but some bizarre variances..
some decreases, some increases


----------



## Kagehitokiri2

(should mention *TarheelTraveler* PMed me about Q pricing change mentioned in last post)

http://destinationclubnews.com/News_The_Destination_Club_Experience_For_Children.php


> The Abercrombie & Kent Residence Club has told us that 65% of their members have children under the age of 18. Exclusive Resorts is nearly identical, where two out of every three members have school aged children.


 so, about 33% for AK/ER are empty nesters.


----------



## TarheelTraveler

Thanks for posting, Kage.  This is really well said:

"Darin Gilson, Abercrombie & Kent Residence Club's Senior Vice President of Sales and Business Development, offered us a vignette about a recent trip enjoyed by a member and three of his young children. "They had an amazing time and created some outstanding memories, and he said that if he were not a member of the club he simply would not have taken this trip," Gilson told us. "I have seen this time and again with members over the years - joining the club becomes a 'forcing device' to take the family vacations that ultimately create the best memories. While you don’t have to join a club to take family vacations, by making the commitment to a club and consistent family vacation lifestyle, you guarantee a set of experiences for your family that cannot be bought or found elsewhere. As the father of four kids myself, I am continually amazed at how fast they grow up, and I cherish our family trips because it allows you to 'freeze time' for a little while and just worry about being together and having fun rather than all the other stuff that you have to deal with on a daily basis at home."" 

That was not our family that he cited, but I couldn't have said it better myself.  I think we were doing one week of vacation a year before joining a DC, and would spend several weeks planning that one week of vacation.  Looking back on the time spent for what we got back in return, it's just silly.  Now we do six or seven trips, I spend hardly any time planning them, and they are vastly better in terms of quality and family time than before.


----------



## UEgly

*DC4MS sell out?*

Apologies if this has been revealed already, but based on the following it looks like DC4MS sold destinationclubforums.com to UE for 16,667 shares of UE stock:

1.  Destinationclubforums.com was founded by William Scherer:

“I originally started Destination Club Forums as a small area on the Internet where I could post messages and discuss exotic luxury travel locations with other destination club members,” said William Scherer, the founder.

(http://newsblaze.com/story/2010042010352000550.pr/topstory.html)



2.  In UE's S-1, a William Scherer was the proud owner, and hopeful seller, of 16,667 shares of UE stock:

Selling Stockholders:                                                                          
William Scherer        16,667           *           16,667     

(see page 69 of http://sec.gov/Archives/edgar/data/1402364/000114420410031992/v187261_s1.htm)

3.  UE bought certain assets from an individual for 16,667 shares of UE stock:

ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 5, 2010, we issued 16,667 shares to an individual from whom we acquired certain assets, as part of the purchase price of those assets.

(see http://www.faqs.org/sec-filings/100513/Secure-America-Acquisition-CORP_10-Q/)


----------



## Kagehitokiri2

thanks for the post. sigh.


----------



## Buon Viaggio

What a disappointing bit of news.  I was a long-time lurker on DC4MS and really felt well-informed and up-to-date on all the latest DC news without the hype of the various clubs' marketing machines.  There really is a void and this little thread is so obscure to people who want to get the real scoop on the industry.  Since it looks like DC4MS really isn't coming back I just joined this BBS tonight and made the suggestion to the administrators that the DC section be expanded and more prominently promoted.  I would love to see a separate DC forum here or at the very least more activity


----------



## travelguy

Buon Viaggio said:


> What a disappointing bit of news.  I was a long-time lurker on DC4MS and really felt well-informed and up-to-date on all the latest DC news without the hype of the various clubs' marketing machines.  There really is a void and this little thread is so obscure to people who want to get the real scoop on the industry.  Since it looks like DC4MS really isn't coming back I just joined this BBS tonight and made the suggestion to the administrators that the DC section be expanded and more prominently promoted.  I would love to see a separate DC forum here or at the very least more activity



Great idea but the problem is that most DC owners won't find this forum.  Many new DC owners/prospects found DC4MS because "Destination Club" was in the forum name and showed up in search engines by a generic "Destination Club" search.  As a former mod on DC4MS, I discussed this with many first time posters.


----------



## TarheelTraveler

*ER*

From the most recent ER newsletter (mid year update):

"We continued to grow our membership through the first half of the year—in fact, we achieved our strongest month of new membership sales in nearly two years this past June, suggesting that the benefits of Exclusive Resorts are becoming even clearer. 

More than 55 members upgraded their memberships to purchase additional club travel opportunities with the club in the first half of 2010—more than did so in all of 2009—a testament to their enthusiasm for the club experience." 

Anyone actually know what those sales numbers are for ER?  Have things settled down from the dues increase turmoil from last year?

A&K announced their numbers on the member call in April, and sales were definitely much better this year.  Sounds like ER's sales have significantly improved as well.  Anyone know about Q, UE or EE?


----------



## Kagehitokiri2

ER > 


TarheelTraveler said:


> we achieved our strongest month of new membership sales in nearly two years this past June
> 
> More than 55 members upgraded their memberships to purchase additional club travel opportunities with the club in the first half of 2010—more than did so in all of 2009



UE >


Kagehitokiri2 said:


> "our sales pipeline, mark, is probably the  highest its been in the last 18 months" (oct 15 2008 > apr 15 2010)



AK >


Kagehitokiri2 said:


> we have done approximately the same number of two year trial memberships and equity memberships during the first two months of 2010 as in all of 2009





Kagehitokiri2 said:


> nearly one third of the members recently upgraded
> 
> we expect many two-year trial members to convert before the deadline
> 
> more than a dozen prospects in the final stages of joining


dont recall Q/EE for 2010? posted all 2009 incl EE and hideaways.


----------



## UnhappyInCT

*Ue Q2 10-q*

A couple of quotes from the 10-Q released today:

"In addition, at June 30, 2010, the amount of cash and cash equivalents on hand was less than the one month debt service required under the CapitalSource agreement. We are in active discussions with CapitalSource to modify the covenant. We may not be able to meet certain covenants under the revolving loan agreement in the future (see Note 6). We have also experienced a decrease in new membership sales and existing member upgrades throughout 2009 and continuing in 2010. For the month of July 2010 officers of the Company made approximately $55 of debt payments on behalf of the Company, and in August 2010, the Company was late meeting its payroll obligations to its employees."

"On June 3, 2010, we entered into a Receivables Purchase Agreement with Monterey. Under the agreement, Monterey advanced $1,700 to us, in exchange for an undivided interest in $2,000 of current and future membership dues. The principal amount due of $2,000 is repayable as the
dues are received. Repayments commenced on June 15 and at June 30, 2010, the remaining amount outstanding was $1,046, (net of interest expense of $131 not yet recognized), which is expected to be repaid by August 31, 2010. In the event that the facility is not repaid in full by
September 2, 2010, a fee of 5% of the remaining outstanding amount is due on that date and on each monthly anniversary thereafter, until paid in full. Based on the expected repayment schedule, the effective interest rate is approximately 170%."


----------



## TarheelTraveler

*Ultimate Escapes*

Additional quotes from 10-Q:

"The above factors, among others, indicate that we may encounter a liquidity event, which may cause us to receive a notice of default of our loan covenants. Our management has taken steps to increase cash flow in order to cover 2010 operational expenses through, if necessary, the sale of selected club properties, and closely monitoring and reducing operating expenses as compared to plan. On June 3, 2010, we entered into a receivables financing loan with Monterey Financial Services, Inc. Profit Sharing Plan and Trust (“Monterey”) under which we sold an undivided interest in $2,000 of membership dues for $1,700 (see Note 15).  In addition, the Company is actively seeking to raise additional working capital.  We cannot predict whether we will be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all.  In the event that this capital raise does not materialize, or that we are unsuccessful in increasing our revenues and profits, we may be unable to implement our current operating plans, repay our debt obligations as they become due or continue as a going concern, any of which circumstances would have a material adverse effect on our business, prospects, financial condition and results of operations. Should our lender, CapitalSource, choose not to modify our revolving loan agreement or grant us a waiver on our covenants, as they have in the past, or if we do not find alternative sources of financing to fund our operations, or if we are unable to generate significant revenues or sell excess properties in our portfolio, we may not have sufficient funds to sustain current operations through the next quarter."

"Sales commissions decreased by $4 for the three months ended June 30, 2010 compared with the same period in 2009 as a result of lower sales in 2010."

Growth strategy said to include points based plans and annual membership plans.


----------



## wilkes591

Clearly you are missing the numbers, the factoring is minor when you consider the following:

1) The restricted cash is gone, meaning CapSource took it.

2) The Revolving Credit Line was moved to Current Liabilities.

3) Accounts Payable has doubled, meaning they are not paying bills.

4) UE has very little Cash on Hand. The factoring is gone already!

The only question is when as it has always been and which one Chapter 7 or 11. 

Do not worry player haters, everyone will lose their deposits and upcoming travel plans, if a rabbit is not pulled from a hat or the member's pony up again. 

Does that make you HAPPY? My Children's disappointment when I tell them the upcoming Orlando trip is cancelled? I am sure that will make you HAPPY, but do not worry I will overcome as I always have.

Traveling to the end!


----------



## UnhappyInCT

Nobody can be happy with this, but highlighting the situation may save some naive soul from flushing their hard-earned money down the toilet.


----------



## AKTHUE

wilkes591 said:


> Clearly you are missing the numbers, the factoring is minor when you consider the following:
> 
> 1) The restricted cash is gone, meaning CapSource took it.
> 
> 2) The Revolving Credit Line was moved to Current Liabilities.
> 
> 3) Accounts Payable has doubled, meaning they are not paying bills.
> 
> 4) UE has very little Cash on Hand. The factoring is gone already!
> 
> The only question is when as it has always been and which one Chapter 7 or 11.



I'm surprised that ULEI bothered to file its 10-Q and committed the lawyer time. They could have just gone out of compliance and gotten delisted. 

As far as I can tell the stock hasn't trade since 7/29.

Didn't JT on either a member call or earnings call imply that they were seeing an uptick in membership sales? I guess not.


----------



## TarheelTraveler

It is clearly not a good situation.  I particularly feel for the members.  For the sake of the industry and the members, I've been crossing my fingers hoping JT pulls another rabbit out of the hat.  I don't think anyone would be happy if the situation got worse.

Anyone look at the 10-Q and 8-K back to back to see the two very different perspectives on things?

I also thought I recalled them saying that sales were picking up.


----------



## Kagehitokiri2

Kagehitokiri2 said:


> http://viavid.net/vvdce/U298432/E000073CE.asx
> "our sales pipeline, mark, is probably the  highest its been in the last 18 months" (oct 15 2008 > *apr 15* 2010)
> (mark argentino @ craig hamilton capital )



i guess "pipeline" makes it not a lie.



TarheelTraveler said:


> Sales commissions decreased by $4 for the three months ended June 30, 2010 compared with the same period in 2009 as a result of lower sales in 2010.


so $4,000? 

Q2 = *apr* may jun

owned/leased down to 94/26.

while possible in 2009, not possible in 2010 to break out non-recurring.

i take it they have not raised more money from members like they did in march?


----------



## wilkes591

UnhappyInCT said:


> Nobody can be happy with this, but highlighting the situation may save some naive soul from flushing their hard-earned money down the toilet.



UE is filing and posting the 10-Q's on it web site. What kind of naive soul would not do due diligence before giving a deposit? If they joined since this company went public, I feel for them but common on the information is right there. 

I could understand member's angst with joining when it was private and listening to the Rosie picture from JT and RK. Now there is no excuse, by the way they booked $2.1 in membership deposits revenue during the 2nd Qtr. Clearly they are not reviewing the Financial Statement or just do not care.

Should be an interesting week or weeks, something is going to break and soon. As for the naive souls, it like believing your post on the DC forum, caused UE to shut it down. 

How can management even think of having additional seasonal rentals, take and confirm reservations for them in the financial condition the company is in. I have always been aware of UE's situation, I would bet there are a lot of naive and unaware members, that have booked travel over the next six to eight months and are going to be shocked one way or the other. Typical for this company, why should anyone be surprised. Or was this a plan, get all that additional peak travel booked and hit the members?

The only thing I am shocked about, is there is no mention of an assessment yet. I can not believe this would not be attempted before a BK filing. Time will tell.


----------



## AKTHUE

wilkes591 said:


> UE is filing and posting the 10-Q's on it web site. What kind of naive soul would not do due diligence before giving a deposit? If they joined since this company went public, I feel for them but common on the information is right there.
> 
> I could understand member's angst with joining when it was private and listening to the Rosie picture from JT and RK. Now there is no excuse, by the way they booked $2.1 in membership deposits revenue during the 2nd Qtr. Clearly they are not reviewing the Financial Statement or just do not care.



Based on the kinds of questions and cheerleading that I have heard on UE conference calls, I think many members are either financially naive or have relied on what they were told verbally without independently reading available documents.

While there is a lot of valuable information in the 10-Q, it is not exactly easy to find, and you have wade through a lot of boilerplate to find it. 

Further, I believe that the way they are accounting for the PE merger is allowing them to recognize membership deposit revenue over time and/or that they assign an expected lifetime to the membership and recognize the deposit over time. The fact that they have booked membership revenue does not mean that they received cash for that. It's accrual accounting.



wilkes591 said:


> Should be an interesting week or weeks, something is going to break and soon. As for the naive souls, it like believing your post on the DC forum, caused UE to shut it down.



I agree, something will happen this quarter - whether it's a BK filing, a transaction, an assessment, or foreclosure.



wilkes591 said:


> How can management even think of having additional seasonal rentals, take and confirm reservations for them in the financial condition the company is in. I have always been aware of UE's situation, I would bet there are a lot of naive and unaware members, that have booked travel over the next six to eight months and are going to be shocked one way or the other. Typical for this company, why should anyone be surprised. Or was this a plan, get all that additional peak travel booked and hit the members?
> 
> The only thing I am shocked about, is there is no mention of an assessment yet. I can not believe this would not be attempted before a BK filing. Time will tell.



The main reason that CapitalSource hasn't foreclosed is that it is still a terrible time to sell properties in second home markets. As long as they can get paid interest, they think they are better off continuing to forebear and waiting for price appreciation to return. The problem for CapitalSource is that UE continues to burn money and CapitalSource isn't going to fund that. CapitalSource expects JT to find money somewhere - that's his job, and as long as he does that, CapitalSource will forebear.

JT to date has specialized in finding money from the gullible rich, primarily the member base, and to a lesser extent the stock market. He's profiting by paying himself well, so no matter what happens he will have done OK, and he converted a portion of his stake into a $10 million note, so he will be paid before any other investor if UE survives.

As for the seasonal leases, I think you have the motivation dead-on. There's going to be a call where JT says - our new strategy of right-sizing is proving correct, fewer full-time properties plus seasonal leases better matches demand and lowers costs, and our model works; HOWEVER this downturn has turned out far worse than we ever expected - cite lots of statistics to show how bad it is - and despite our efforts, the membership sales have fallen well below our plan due to the economy & other external factors outside our control - we've secured the right leases at good price for this holiday/winter season, but we don't have the cash to execute them. We looked for new investment but failed. So we are turning to you, our members and asking you: which choice do you want? cancel the leases and have to disappoint you with fewer properties and cancelling reservations this winter? a special assessment? increase the dues retroactively and start collecting now?

If members have planned their Christmas and New Years vacations, they may go along yet again. Remember last time, when the penalty was having your reservations canceled if you didn't pay up. That proved to be a powerful motivator.


----------



## wilkes591

AKTHUE,

I agree with the whole post, but something is going on with Capital Source and it might not be good. Did you notice the reduction of the total debt above the home sales proceeds? No sense asking for an assessment, if Capital Source is calling the note. Just blame Capital Source and file.  It would be stupid in this RE market, but people make bad decisions everyday, like joining a DC.

The best is the huge increases in G&A and Salaries expenses during the QTR. Clearly they are tighten the belt and trying to reduce cost(JOKING), while running out of money. 

Basically, Capital Source is taking every dollar and Management is spending as much as it can. It looks like game of CHICKEN and the members will pay one way or the other.


----------



## TarheelTraveler

Just as an FYI, A&K's two year trial offer ends August 31:

http://www.akresidenceclub.com/two-year-trial.aspx

http://www.fraxfinder.com/archives/...h-no-upfront-capital-commitment-required.html

IMHO, this is a pretty darn good deal for any prospective member.  No capital contribution during that trial period (i.e., only dues), and only a 10% premium on regular dues, with the dues premium credited back towards the capital contribution if the person joins as an equity member.

Separately, ER is doing a four year deposit payment installment plan.  I'd link that, but destinationclubnews.com is down right now.


----------



## SFOResident

Equity Estates: (in reference to a post that wondered about EE)

I'm a member of EE...the way to think about it (Perry M and the end of the world scenarios apart---not to say they couldn't happen, but for those of us who choose to see a different, possible future...) is this:

Medium High-end Property Investment Hedge Fund, where you get to stay in the investments until the fund wraps up in 12 years.

The basic structure is:
---You must be a "qualified" investor, with a certain amount of liquid assets, net worth and/or both to buy in (just like a hedge fund)
---It's an SEC regulated private investment---which means nothing except that your attorneys will recognize the structure when you put the papers in front of them--and you will too, if you do these sorts of investments (1/10, 2 and 20, GP, LP, LLC, all the normal buzz words)...
---They get paid by taking a percentage out of the portfolio's value every year as a management fee and then 20% of the total profits when they cash in the portfolio in 12 years
---It does NOT have the high touch of Quintess (which I've experienced) or perhaps A&K either---all their "concierges" are contractors, not employees, so don't expect them to be able to get you into Per Se on a drop of a hat when you stay at the New York residences, for example.  They do not generate the "once in the lifetime" thing; this has never seemed to break the heart of my (young) kids who are happy to be with mom and dad in warm and interesting places...
---It's family oriented; more than half the members have school age kids, the homes have usually 3 or more bedrooms (one NY residence has two; it's beautiful and in compensation, has an indoor pool, hot tub and work out rooms)...I raise this in contrast to, say, Ritz Carlton DC, which tends to be about condos with more luxury, but less kid friendly set ups (bed rails, bikes, games in the closet, etc etc etc)
---The members LLC owns the properties
---Some properties are allowed to be leased, by the terms of the operating agreements; every 7 members (or 8, for the more expensive ones), they go buy something...
---The leverage on the properties can rise to as high as 25%---but is currently below that
---Holidays are apportioned by a lottery system, not a points system.
---After being a member for 1 year, you can resell your share on the open market if you wish at whatever the fair market price for your share is (you can get---I assume with a fairly substantial haircut).
---Last update, 2 of the 80 something members had dropped/withdrawn/sold, everyone else was traveling.
---They had a red banner year last year, sold a bunch of memberships...
---They have a strategic alliance with a European Equity Club which gives members access to something like 23 European houses during part of their season in return for part access to the Equity Portfolio (seems fair enough)


Comparing them to some of the competition, having had the privilege of staying with friends in their D/Cs ---
---Homes are a little less luxurious than Quintess'---and service is less all over you (at Quintess, the concierge checked in multiple times a day---with EE, once your travel is set up and you are checked into the property, you have to call/tag them for stuff---Having said that, they are always responsive, within 20 minutes, to text/call...)
---Locations are slightly off the high end luxury track (so, rather than in the Trump in NY, or on 5th Avenue or in Millenium near Lincoln Center), they are about 2 blocks out of the most ridiculously high end locations...They have all worked fine, safe, enjoyable---and probably, under the idea that it's best not to own the nicest house on the block, better 12 year hold investments.
---Oddly, and I have no explanation for this, Equity Estates finds better chefs than Quintess---no clue as to why, no explanation for it, but it's been true in Hawaii, SoCal and Hawaii.  Utterly clueless as to why.  Happy about it though...
---You won't find info about EE (financials and whatnot) up on the web 'cause it's a hedge fund, in essence...If you want that stuff, get in touch with them, sign the NDA and kick the tires...

For what it's worth, I miss Destination Club Forums too!

Good to see the crowd back posting...


----------



## TarheelTraveler

*EE*

Glad to see you posting over here now, SFOResident.  You've always had good comments.

I haven't seen this mentioned anywhere, but tell us more about the Equity Estates Lone Star Fund.  It looks like a totally new separate fund that is targetting $1.5M-2.5M residences, with some regional targeted destinations like a Texas lake house and New Orleans.  

http://www.equityestateslsf.com/destinations.php

http://www.equityestateslsf.com/faq.php

Seems like a good move to offer some regional destinations and presumably a lower price point.  I've known a lot of people interested in the equity DC concept, but couldn't afford or didn't want to spend the kind of money needed for an equity DC.  I think a lot of people also want some destinations that they can get to quicker.

It looks like EE has sold about 26M in membership interests based on the amended SEC filing for EE I and the EE Lone Star Fund.  How many houses are now owned versus leased?  I assume maybe 8 of 12 (based on 24M guesstimated net proceeds/3M)?

Also, since you've got friends that are members of Quintess, what have you heard about Quintess lately?  Seems like mostly we've heard stuff about the new sister PGA Tour Club.


----------



## AKTHUE

*Equity Estates*



SFOResident said:


> Equity Estates: (in reference to a post that wondered about EE)
> 
> I'm a member of EE...the way to think about it (Perry M and the end of the world scenarios apart---not to say they couldn't happen, but for those of us who choose to see a different, possible future...) is this:
> 
> Medium High-end Property Investment Hedge Fund, where you get to stay in the investments until the fund wraps up in 12 years.
> 
> The basic structure is:
> ---You must be a "qualified" investor, with a certain amount of liquid assets, net worth and/or both to buy in (just like a hedge fund)
> ---It's an SEC regulated private investment---which means nothing except that your attorneys will recognize the structure when you put the papers in front of them--and you will too, if you do these sorts of investments (1/10, 2 and 20, GP, LP, LLC, all the normal buzz words)...
> ---They get paid by taking a percentage out of the portfolio's value every year as a management fee and then 20% of the total profits when they cash in the portfolio in 12 years
> ---It does NOT have the high touch of Quintess (which I've experienced) or perhaps A&K either---all their "concierges" are contractors, not employees, so don't expect them to be able to get you into Per Se on a drop of a hat when you stay at the New York residences, for example.  They do not generate the "once in the lifetime" thing; this has never seemed to break the heart of my (young) kids who are happy to be with mom and dad in warm and interesting places...
> ---It's family oriented; more than half the members have school age kids, the homes have usually 3 or more bedrooms (one NY residence has two; it's beautiful and in compensation, has an indoor pool, hot tub and work out rooms)...I raise this in contrast to, say, Ritz Carlton DC, which tends to be about condos with more luxury, but less kid friendly set ups (bed rails, bikes, games in the closet, etc etc etc)
> ---The members LLC owns the properties
> ---Some properties are allowed to be leased, by the terms of the operating agreements; every 7 members (or 8, for the more expensive ones), they go buy something...
> ---The leverage on the properties can rise to as high as 25%---but is currently below that
> ---Holidays are apportioned by a lottery system, not a points system.
> ---After being a member for 1 year, you can resell your share on the open market if you wish at whatever the fair market price for your share is (you can get---I assume with a fairly substantial haircut).
> ---Last update, 2 of the 80 something members had dropped/withdrawn/sold, everyone else was traveling.
> ---They had a red banner year last year, sold a bunch of memberships...
> ---They have a strategic alliance with a European Equity Club which gives members access to something like 23 European houses during part of their season in return for part access to the Equity Portfolio (seems fair enough)



SFOResident - sounds interesting. What do the memberships cost? Are there annual fees or per night charges? How have you found availability?

Do you know if there any resales posted for sale anywhere?


----------



## Kagehitokiri2

a lot of EE data has been posted here.

this includes that the upcoming mgmt fee, and if they reach debt cap, will IIRC, _each_ add ~33% to current dues. (broadly estimated for debt)

my "unanswered question" was where they would be paying the debt from if they reached the cap.

at some point i will try to reorganize the data posts here. (mainly EE, but some other as well)


----------



## AKTHUE

Kagehitokiri2 said:


> a lot of EE data has been posted here.



Where is here? If it was supposed to be a link, it didn't work. If you mean this thread, well there are over  440 posts, and a search didn't find the answers to my questions.


----------



## Kagehitokiri2

*TarheelTraveler*, howd you find that new EE club? interesting. reciprocal use. like what lusso talked about. how does that work.. and wonder how much lower the fees are.

is ER still doing half now, half in 10 years?

re sea island (ER destination) >
http://www.luxist.com/2010/08/12/sea-island-company-files-chapter-11-plans-sale/



SFOResident said:


> ---After being a member for 1 year, you can resell your share on the open market if you wish at whatever the fair market price for your share is (you can get---I assume with a fairly substantial haircut).
> ---Last update, 2 of the 80 something members had dropped/withdrawn/sold, everyone else was traveling.
> ---Oddly, and I have no explanation for this, Equity Estates finds better chefs than Quintess---no clue as to why, no explanation for it, but it's been true in Hawaii, SoCal and Hawaii.  Utterly clueless as to why.  Happy about it though...



wow. that doesnt speak well for "hospitality" experience of Q. any other sourcing comparisons?

hawaii (island?) 
socal (la jolla vs la quinta?)
and what was the 3rd?


----------



## TarheelTraveler

Kagehitokiri2 said:


> *TarheelTraveler*, howd you find that new EE club? interesting. reciprocal use. like what lusso talked about. how does that work.. and wonder how much lower the fees are.
> 
> is ER still doing half now, half in 10 years?
> 
> re sea island (ER destination) >
> http://www.luxist.com/2010/08/12/sea-island-company-files-chapter-11-plans-sale/



SFO had mentioned the SEC registration, so I thought that I would look at the Edgar filings where I saw the new filing.  Unlike the Ultimate Escapes filings, they don't really have anything of interest other than listing from time to time the amount of interests sold (Equity Estates is exempt from most filing requirements under their structure).  SFO or 3DH should be able to elaborate on the questions.  Hopefully, they can also provide the current owned versus leased breakdown.  They had a very high leased to purchased ratio compared to other clubs (which is not necessarily a bad thing but something that definitely needs to be considered when joining), but I know that EE had talked about buying a number of homes in the 1st Q.  When I guesstimated the 8 purchased, I forgot to include debt, so unless I'm missing something, I would think the number of purchased homes would be higher if there is debt or they have a lot in their capital account waiting to be used.  Definitely some good deals out there right now.

I assume the new ER offer replaces the old ER offer.

Sea Island is a great destination.  Hopefully, they can get out from under all of the debt.


----------



## travelguy

AKTHUE said:


> Where is here? If it was supposed to be a link, it didn't work. If you mean this thread, well there are over  440 posts, and a search didn't find the answers to my questions.



Kage may have meant on DC4MS.  I know much of the specific financial info was posted as well as some posts directly from the EE execs.

Quite frankly, the EE execs were happy to post for promotional purposes and then made (IMHO) some contradictory statements about the use of funds.  Several posters, including Kage and me, asked some specific questions that (again IMHO) cornered the EE execs on some issues.  The EE execs stopped posting and complained to the forum admin (Dr. Bill) about the posts which they viewed as hostile.

My view is the EE execs never fully explained issues regarding their business model and how certain expenditures were being funded.  When the hard questions we asked, they took their ball and went home.   Not a smoking gun ... but people were starting to cough on the air quality ... 

If only we had the archives of DC4MS ....


----------



## Kagehitokiri2

of course i did not mean DC4MS i meant this thread and TUG. i have posted a ton of data here myself. i guess *PerryM* is to thank for some my postings, so have to give some credit. 

*travelguy*, beyond what covers debt, what are your other specific "unanswered questions" re EE?

google cache and archive.org are very helpful btw.


----------



## AK.TH.UR.UEmember

*UE trying a private placement to members*

From my user name you can tell I have been through the wars with the DC industry....nice vacations, but cost per night is off the charts at this point....

So, as to the latest incarnation - UE - with cash almost gone, a slow motion liquidation well underway (gradually selling all high quality properties to stay alive), and no public market for the stock at all, UE has the nerve to send out another PPM to try to raise funds from members....this one dated July 20, 2010.

Seems rather unlikely, but the PPM only mentions financial condition risks a couple of times (and never mentions the cash situation) and the companion puff piece (dated August) says they expect *earnings* of $3.0 million in 2011 and $18.7 million in 2012, at least based on JT's rather odd version of "non-GAAP" accounting.   

Maybe the goal is to get to the Dec/Jan renewal cycle to get some cash....but that hardly seems like a long-term fix....

We should start a pool on the filing date....


----------



## AKTHUE

AK.TH.UR.UEmember said:


> From my user name you can tell I have been through the wars with the DC industry....nice vacations, but cost per night is off the charts at this point....
> 
> So, as to the latest incarnation - UE - with cash almost gone, a slow motion liquidation well underway (gradually selling all high quality properties to stay alive), and no public market for the stock at all, UE has the nerve to send out another PPM to try to raise funds from members....this one dated July 20, 2010.
> 
> Seems rather unlikely, but the PPM only mentions financial condition risks a couple of times (and never mentions the cash situation) and the companion puff piece (dated August) says they expect *earnings* of $3.0 million in 2011 and $18.7 million in 2012, at least based on JT's rather odd version of "non-GAAP" accounting.
> 
> Maybe the goal is to get to the Dec/Jan renewal cycle to get some cash....but that hardly seems like a long-term fix....
> 
> We should start a pool on the filing date....



I'm with you and I went through the same club sequence. Except by the time of the first assessment it was enough for me. I think there will be a BK filing before they file Q3 financials. 

Here's my view in post 436: http://www.tugbbs.com/forums/showpost.php?p=966566&postcount=436


----------



## willmyclubmakeit

*reunion*

I am glad to see so many of our prior friends back together--I just wish it were for a more joyous purpose and not a wake.  Lets hope that things continue for a while and we keep traveling but I'm worried.     Good detective work on the dentist et al and I have been lurking but decided to again join the corwd.  Keep sharing as this group always seems to be a week, month, or year ahead of other members in understanding the situation.


----------



## Kagehitokiri2

hmm ER changes dynamic again

http://destinationclubnews.com/News_Exclusive_Resorts_Discounts_Pricing_For_Full_Payments.php

choose to pay over time, or discount


----------



## Buon Viaggio

June was best month in sales ... has anyone heard how many members joined?


----------



## AK.TH.UR.UEmember

*Why do I have doubts..??*

June is the "best month" for membership sales say some...

But in legal public filings, UE says sales were very slow in 2009 and *continue to be very slow *this year...

anyone see a conflict there..??


----------



## TarheelTraveler

*Ultimate Escapes*

Ultimate Escapes closes Fort Collins, Colorado office:

http://destinationclubnews.com/News_Ultimate_Escapes_Closes_Fort_Collins_Branch.php

I'm actually surprised this didn't happen sooner.  However, I'm also surprised by the $3M cost savings figure.  Is there that much overlap or excess capacity?


----------



## lovetovac

*UE - Esperanza*

UE has listed all Esperanza properties as unavailable. Reason given - deferred maintenance???? Esperanza has an HOA - no deferred maintanence - must be more cost savings????


----------



## Desties

*Yep*

I figured something was up when I got an email two days ago from my NEW escape planner. I'm guessing most people in Fort Collins aren't going to move to KC or Orlando given the iffy financial stability. 

I also noticed that PrivateEscapes.com was down this morning. The only reason I know this is that I had failed to update my bookmarks post-merger for the member website, and it finally stopped redirecting today. My heart sank at first, but then I simply got in through the actual UE site. 

As for the savings, they SHOULD be substantial. Look at the filing and you'll see the dramatic expense bumps pre and post PE merger. Fort Collins must've factored into a lot of that. There was no reason for UE to have THREE offices. I'm just bummed for the PE folks that got bumped in the math.


----------



## Desties

*UE properties*

On the property front, it seems as if both of the NYC Link condos are going away come March. It's a pity, I enjoyed having a 2br Signature property in the heart of it all.

It also seems as if Trump Miami is going away on the Premiere side. It always had low occupancy levels, but I imagine Miami is going to get a dramatic uptick in demand during Miami Heat season. 

All of the seasonal and annual leases about to come online should help in terms of availability, though obviously the "going concern" quote in the latest filing is a more pressing matter than me bellyaching about the end of a 2 bedroom unit in midtown.


----------



## willmyclubmakeit

Its possible that the Esperanza units (if the signature units) are finally getting the deferred refresh (like the NY Trump units) that every other unit at Esperanza received 4 or more ago except the UE units which were TH units at that time (and TH didn't have the money obviously).  The Elite units were upgraded about 2 years ago and the Signature units were supposed to be upgraded this summer so manybe its finally happening or Esperanza told UE you have no choice but to upgrade them or they are being considered for disposal given the high management fees but that would be a shame as we love Esperanza.   Time will tell.   





lovetovac said:


> UE has listed all Esperanza properties as unavailable. Reason given - deferred maintenance???? Esperanza has an HOA - no deferred maintanence - must be more cost savings????



as for NYC Link--wasn't there an HOA issue at Linc disputing the ability of clubs for shared usage (post-handover of the homeowners association of course as I was told the developer approved of the arrangement).  I would bet this may have factored into that decision and I am sure it will be missed as I have never been able to get the Link 2 bedroom but only the Trump units.


----------



## BestHC

*Besthc*

Took me awhile to land here.....a rather short runway


----------



## TarheelTraveler

*Exclusive Resorts*

Interesting article on ER cost-cutting efforts:

http://destinationclubnews.com/News_Exclusive_Resorts_Reduces_Costs_And_Remains_Below_Budget.php


"As one can assume, the property costs of running and operating the hundreds of residences available to members account for much of the club's expenses. Representing 60% of their operating expenses, homeowner association fees, rent on leased residences, and housekeeping are the club's three most costly property expenses, followed by member services and support, concierges, fees related to beach clubs, resorts and onsite amenities, property taxes, insurance, and others. Through the club's diligence, operating expenses are approximately 45% below 2007 levels on a "per member basis."....

This year has also seen the reduction of administration and support costs, all without affecting the membership experience. Exclusive Resorts has been able to reduce costs in several departments, including legal, risk management, information technology, member reservation systems, tax, human resources and accounting. The world's largest destination club has also subleased a portion of their square footage in their Denver office space to a third party. The combination of these efforts have led to a near 30% reduction in costs compared to 2007. Even with these savings, the club is planning and is on track for an additional 10% reduction this year."


----------



## AK.TH.UR.UEmember

*Anyone hear that UE has hired a Chief Restructuring Officer..???*

Can't be very long now...

Will it be a 7 or an 11...???


----------



## wilkes591

Haters have been posting that since the first assessment, sooner or later it might or will happen. Just traveled this weekend and everything went fine. Some other things are going on, however I agree BK is a strong possibility, as is an attempt at a second assessment. As for hiring another Chief, it just like leaving all those member reservations up for the PHANTOM peak leases, not based in the current reality of the situation. 

Whatever the pain will be, I am sure it will make you  , not  

Just remember even the T&H member base that Rob McGrath ripped-off had value, and I think you are under estimating the value of a large paying member base to other clubs. I would think the UE membership base is even more valuable from BK without CapSource, The Equity Holder's Egos about the club's valuation, and The Under Water Properties. 

Time will tell, best of luck to all the members.


----------



## Kagehitokiri2

wilkes591 said:


> Just remember even the T&H member base that Rob McGrath ripped-off had value, and I think you are under estimating the value of a large paying member base to other clubs. I would think the UE membership base is even more valuable from BK without CapSource, The Equity Holder's Egos about the club's valuation, and The Under Water Properties.



agree re value of members in terms of acquisitions/etc.


----------



## TarheelTraveler

wilkes591 said:


> Just remember even the T&H member base that Rob McGrath ripped-off had value, and I think you are under estimating the value of a large paying member base to other clubs. I would think the UE membership base is even more valuable from BK without CapSource, The Equity Holder's Egos about the club's valuation, and The Under Water Properties.
> 
> Time will tell, best of luck to all the members.



Hope it doesn't come to that.  I also agree that the member base has value.  Question is how much value, and is it enough to make up for the fact that the members presumably wouldn't be coming with any deposits in a BR situation?  When Lusso went down, Quintess, A&K and EE all made offers to the Lusso refugees.  The equity clubs made much more conservative offers (essentially longer term trials with deferred deposits IIRC), and Quintess made a much more aggressive offer (close to a free membership again IIRC), which at the end of the day probably pulled in the most refugees.

Problem is could any club absorb UE's huge membership base without causing financial and availability issues for the existing members.  ER has never seemed interested in such deals, and they have a large enough membership base to where they wouldn't seem to gain much.  UE has aggressively gone after such deals (Tanner & Haley, DC in Florida, Everlands, etc.), and would be the most obvious acquirer if we weren't talking about UE to begin with.  Quintess is aimed at the high end.  A&K is smaller, pretty darn conserative financially and focused on the equity model.  I assume EE is the same way.  RC is larger, but so far hasn't shown an interest in growing that way, and Marriott seemed like they were battoning down the hatches.

Maybe a non-DC third party would come in and give it a try, but it's hard to compete with other DCs when you've got to provide the houses burdened by a lot of leverage (since you don't have any deposits of note) and you've got competitors with no leverage or little leverage with dues that should be equal or less.

In any event, best of luck to members and hope JT can put something together to keep things going.


----------



## SciFrog

Quintess had excess capacity at the time of Lusso BK. This is not the case anymore, so any offer would not be agressive IMHO.


----------



## AK.TH.UR.UEmember

*UE information*



wilkes591 said:


> Haters have been posting that since the first assessment, sooner or later it might or will happen. Just traveled this weekend and everything went fine. Some other things are going on, however I agree BK is a strong possibility, as is an attempt at a second assessment. As for hiring another Chief, it just like leaving all those member reservations up for the PHANTOM peak leases, not based in the current reality of the situation.



Sorry, but your attack on me is inappropriate - I am not a "hater" - far from it.  I am just someone with actual information, rather than stuff I simply hope is right.

Look - I have traveled for years with this company in various forms and have future reservations as well, but I am trying to be realistic....

*Fact #1* - The CRO was hired at the demand of Cap Source.  He is now there now deciding on the company's next steps.

By the way, that first assessment of $11,000,000 (claimed) from "way back" in early 2009, plus the $8,000,000 (less many many expenses unfortunately) from the shell merger "IPO" in 2010 have all disappeared at this point - that's a lot of negative cash flow.

*Fact #2* - JT seems to have found a way to make one recent payment to CS, but he will have to continue to sell properties to keep them at bay until the year-end renewals give him a bit more cash.

So here's a game plan that buys some time - sell all the best properties, lease condos, announce new locations (but since there is no $$, how will they ever honor those phantom property reservations??), and hope there is a high renewal rate at year end.

*Fact #3* - The "value" of the members in the T&H situation was *only* because another DC saw a way to grow in a hurry - buy the real estate with the membership coming along as a source of cash flow.  What club is in a position to do that now?  And don't say ER - they have problems of their own, and, in any case, they have a totally different model - clustered properties  - versus JT's "we have the largest DC [by number of destinations]" approach - one or two all over the place.

It is hard to see who would buy this bunch of properties and assume the membership this time unless a few (or a lot) of the members got together to do something....unlikely, but possible I believe.  Maybe that's a conversation worth having.....


----------



## willmyclubmakeit

as for fact #3, I agree that the membership in place had more value 5 years ago than today but there should still be a huge value in 1000+ dues paying members to another club.  Think about the avoided costs of marketing/sales alone which is not insignficant but it also allows a club to possibly cash out some on a resignation list, increase their utilization, and maybe upsell some members.  However the key in my opinion is what portion of UE's real estate portfolio a club would take, what if any portion of a refundable membership liabiilty they would assume, and how to deal with membership plans that are radically below the price of their current market.  For example, why would Quintess, AK, or ER be interested in a premier member unless the member radically increased their annual dues?   For Elite it shoudl be easy and given the size of the Signature class and price point I would imagine that another club will make this work.   How would transitional benefits/services be provided given so many have airline reservations and commitments to friends/family---if members are disenchanted in the transtion they will have less joy and loyalty to a new club but if the other club rented UE's properties for say a year transition where they could not substitute their own properties wouldn't we all be singing form the same hymm book?  How about capsource--don't they have a shared interest in the industry's success/reputation beyond just their UE debt as they are lenders to the other clubs?  How would an equity club convert/offer something to UE members--key is that the membership sticks together to a large extent to have real value to another club.  Just my personal opinion and hopes for a solution for all.


----------



## SciFrog

ER will not care about another club, they have proven that before. Q will merge with another club before they will consider dues paying members but with no capital. ER and Q have achieved stability and balance. Once they will lower deposits to reflect lower real estate to buy, they will resume growing organically. The current deferred plans is one way to lower deposits.  It shows these companies are committed to long term organic growth. UE going down would in effect benefit them. So it is unlikely they will rescue members.  Also marketing costs are almost zero these days...


----------



## Kagehitokiri2

to clarify, the members who keep paying up are of value to whoever they are paying, but are probably not going to be receiving a lot of value in return, considering what weve seen so far.


----------



## willmyclubmakeit

SciFrog said:


> ER will not care about another club, they have proven that before. Q will merge with another club before they will consider dues paying members but with no capital. ER and Q have achieved stability and balance. Once they will lower deposits to reflect lower real estate to buy, they will resume growing organically. The current deferred plans is one way to lower deposits.  It shows these companies are committed to long term organic growth. UE going down would in effect benefit them. So it is unlikely they will rescue members.  Also marketing costs are almost zero these days...



come on....its tough to sell anyone on a DC today, probably tougher than ever, and it would be tougher still if UE goes down.   The cost to sell new a new membership is big---expensive to get a good prospect list, work the list, develop trust in a prospective member, sell the club, hope to get the cash and a contract signed, pay commissions to salespeople, etc.   we are valuable to a club but what we will get out of that is surely less than T&H members got and time will only tell.


----------



## Desties

AK.TH.UR.UEmember said:


> June is the "best month" for membership sales say some...
> 
> But in legal public filings, UE says sales were very slow in 2009 and *continue to be very slow *this year...
> 
> anyone see a conflict there..??



Well, the 10-K sheds some light here.

The club went from 1,214 active members to 1,232 during the first six months of 2010. No one's going to cheer a net gain of 18 -- and it would be hard for that to be read into a strong June -- but at least it's growth.

The resignation list went from 46 to 60. Now, I don't recall if those that have resigned are included as active (so it would be +4 instead of +18), but it does mean that the club has grown (albeit slowly) in that time.

FYI, this is on page 8 of the filing, for those playing at home.


----------



## Buon Viaggio

The size of the UE resignation list at 4.9% seems shockingly small all things considered.  Looks like somehow most members have been convinced to take a wait-and-see approach.  Good luck to everyone.


----------



## SciFrog

willmyclubmakeit said:


> come on....its tough to sell anyone on a DC today, probably tougher than ever, and it would be tougher still if UE goes down.   The cost to sell new a new membership is big---expensive to get a good prospect list, work the list, develop trust in a prospective member, sell the club, hope to get the cash and a contract signed, pay commissions to salespeople, etc.   we are valuable to a club but what we will get out of that is surely less than T&H members got and time will only tell.



True, but clubs are in survival mode, for the time being, they are fine not getting new members or deferred payment. But I don't see the value in members without some form of deposit. The math simply doesn't work anymore. I would bet new members are only referrals from other members, the DC industry isn't attracting outside attention anymore.


----------



## wilkes591

Did I call you a hater? I said "Haters" have been posting that since the first assessment. If you took that statement of fact as an implication against you, do not blame me. However, people have been posting UE(UR/PE) is going BK since 2007, eventually I agree, sooner now maybe.



AK.TH.UR.UEmember said:


> Sorry, but your attack on me is inappropriate - I am not a "hater" - far from it.  I am just someone with actual information, rather than stuff I simply hope is right.
> 
> Look - I have traveled for years with this company in various forms and have future reservations as well, but I am trying to be realistic....



I am not a JT, RK, or UE pumper and am a realist as well, as for your facts please note the May 15 post. Not that it was very difficult to see what the future was with JT's "realistic" view of the financial conditions and most other realist or people with "information" saw this coming as well. The only question is timing.



wilkes591 said:


> UE is not merging functions, PE still runs out of CO and UR runs out of FL with the same functions. An accounting office in KC. Two high paid CEOs in JT and RK and a high paid CFO. Very TOP heavy with executives, COO, Chief Sales and Marketing Officer with no marketing budget, Senior VP of Business Planning, Chief Technology Office, and very heavy on executive salaries. Then UE added Directors, look at McMillian's sweet deal. Not exactly a company cutting salaries back to stay alive.
> 
> I guess the way to look at it now is what ever cash UE leaves laying around, Capital Source will want it, so just spend it. This company could make it, it is just not trying to make it. The Cash flow is the place to focus on, look at the burn rate and the cash on hand. UE will make it through the 2nd QTR and the 3rd QTR. UE will be forced to do something around October/November.
> 
> Capital Source will sit back collect the interest and fees and just let UE sell the homes and pay down the debt while UE maintains the homes and collects from the members. Depending on how UE manages the members and cash flow determines how long this can continue.
> 
> The unbelievable part is UE is still getting new members with the PUBLIC financial statements. Clearly, the new members are not reviewing the financials. If this increases and only slightly perhaps UE will make it through the year with out a problem in October/November. Anyone resigning can forget about getting a deposit back, clearly UE does not have the money to give back. I would love to resign and get my money back, but let's be realistic.
> 
> Do any other member's see a different angle?


----------



## wilkes591

AK.TH.UR.UEmember said:


> *Fact #3* - The "value" of the members in the T&H situation was *only* because another DC saw a way to grow in a hurry - buy the real estate with the membership coming along as a source of cash flow.  What club is in a position to do that now?  And don't say ER - they have problems of their own, and, in any case, they have a totally different model - clustered properties  - versus JT's "we have the largest DC [by number of destinations]" approach - one or two all over the place.
> 
> It is hard to see who would buy this bunch of properties and assume the membership this time unless a few (or a lot) of the members got together to do something....unlikely, but possible I believe.  Maybe that's a conversation worth having.....



There are other clubs with "SUGAR DADDIES" looking to get bigger and if you can get "information", there are other things going on as well. I just think that the equity holders egos are so big that it most likely will not happen unless Capital Source forces the current equity holders hands.


----------



## TarheelTraveler

wilkes591 said:


> There are other clubs with "SUGAR DADDIES" looking to get bigger and if you can get "information", there are other things going on as well. I just think that the equity holders egos are so big that it most likely will not happen unless Capital Source forces the current equity holders hands.



The problem with a lot of these deals is the very different interests of the members and the equity holders.  Management and the equity holders want, of course, to package the members and sell them to another club for the maximum price (often a less stable club desperate for cash flow-long term economics be d**mned), while members would love to have increased security and travel that they don't need to worry about.  More often than not, those goals conflict.


----------



## wilkes591

TarheelTraveler said:


> The problem with a lot of these deals is the very different interests of the members and the equity holders.  Management and the equity holders want, of course, to package the members and sell them to another club for the maximum price (often a less stable club desperate for cash flow-long term economics be d**mned), while members would love to have increased security and travel that they don't need to worry about.  More often than not, those goals conflict.



Yes, lots of problems with a deal for UE, the good news is at least someone is looking. It is highly unlikely given the egos involved, however smart people do dumb things every day.


----------



## ClubsRDead

*Well....*



wilkes591 said:


> Yes, lots of problems with a deal for UE, the good news is at least someone is looking. It is highly unlikely given the egos involved, however smart people do dumb things every day.



Leave for a while and come back to this.  Is anyone surprised?  Jim's ego is as big as a mountain.  Now there's a CRO involved?  That means bankruptcy, right?  So what happens to us now?  Well - they try to shove us in a one size fits all scenario and we all lose.  And Capital Source loses.  Is anyone really shocked by this?  Half of us are suing AK (unsuccessfully) and now we all have to sue Jim or walk away.  This is likely a blessing for him because in short order he'd owe us our supposed redemption rights, which is higher for those of us that paid assessments and early dues renewals.  So what have we learned here?  I'm all for a member owned, member driven, member run club.  Maybe we buy the houses from CS, or those we want, calculate our costs of operations (eliminating all the duplication, unnecessary costs and other BS) and do it ourselves.  Or - look at ANY of the "competitor" web sites - we can pretty much join any club at any time for a dues only basis for a couple of years of travel.  Knowing that, why give Jim any more of our money from this point forward??


----------



## TarheelTraveler

*Ultimate Escapes*

Destination Club News re: chief restructuring officer for Ultimate Escapes:

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

"...has retained Sheon Karol from CRG Partners to serve as Chief Restructuring Officer as the club seeks to recover from a rather lean 2009 and 2010. According to the club's recent 10-Q filing outlining their first half of 2010, the club counted 1,214 members at the end of 2009. As of June 30, 2010, Ultimate Escapes had just 1,232 members. The document also stated that the club would take "steps to increase cash flow in order to cover 2010 operational expenses" and would be "monitoring and reducing operating expenses." Soon after their filing, Ultimate Escapes closed their Fort Collins branch and has now brought in Karol to help the club restructure. 

Karol joined CRG Partners as a Partner in March of last year and has over 20 years of experience in the legal and executive world, with an emphasis on "out-of-court restructurings, bankruptcy proceedings, and mergers and acquisitions." His resume includes serving as a Financial Advisor to Grupo Mexico during is retention of equity in ASARCO's contested confirmation hearing, managing more than $200 million in asset sales for an $8 billion supermarket chain in Chapter 11, and providing general bankruptcy advice and managing operations for the restructuring of a $250 million medical diagnostic company. A former lawyer with a leading New York firm, Karol holds a bachelor's degree from Yeshiva College and is a Juris Doctor studying at Yale Law School..."


----------



## AK.TH.UR.UEmember

*CRO announcement*



wilkes591 said:


> There are other clubs with "SUGAR DADDIES" looking to get bigger and if you can get "information", there are other things going on as well. I just think that the equity holders egos are so big that it most likely will not happen unless Capital Source forces the current equity holders hands.



Now that there has been a public announcement of the CRO's appointment, I guess you could remove the quote marks around the word *information*.

Bottom line is, I was pretty close to some of the earlier transactions and once in a while do have what you refer to as "information", sometimes a bit ahead of the public announcements...and I thought folks on this thread might be interested, that's all.....

I apologize if that is upsetting and worthy of sarcastic punctuation....

I guess I really don't understand the ad hominem nature of your comments after my postings, but let's move on shall we...???
   
_____________________________________________
_____________________________________________
I continue to have real doubts about any other club stepping up if UE fails, even if there is the potential for a lot of new members in a hurry (which was Jim's theory, of course..).  The nature of this real estate with very few properties scattered in many locations just make the economics hard, and the membership must be pretty burned out by now.

Remember, UR brought in a lot of bucks with upgrades from his base offer of the dues only 14 day bronze membership.  That cash gave Jim some breathing room up front.  Since the 14 day, dues only bronze members (not me unfortunately) are the ones who have no new potential losses if UE goes under, who would upgrade and give a new club any $$..??

So, I wonder again - could the members themselves pull something together to move forward.  The problem is that there is no longer any equity in the homes.  When Jim bought from T&H, there was arguably a significant equity still in the real estate (maybe north of $20 million) - but that was before the UR/UE losses, the housing price collapse, and the money scramble of the last couple of years.

So my real fear is an abrupt, total shutdown, leaving many of us scrambling with already purchased tickets and no place to stay.   

Just my 2 cents.


----------



## ClubsRDead

So does this mean the CRO will can Jim?  How long until that significant event takes place?  Ooopss....is Jim going to trade shares in UE now with whoever owns this website so they take it down too?


----------



## wilkes591

AK.TH.UR.UEmember said:


> Now that there has been a public announcement of the CRO's appointment, I guess you could remove the quote marks around the word *information*.
> 
> Bottom line is, I was pretty close to some of the earlier transactions and once in a while do have what you refer to as "information", sometimes a bit ahead of the public announcements...and I thought folks on this thread might be interested, that's all.....
> 
> I apologize if that is upsetting and worthy of sarcastic punctuation....



You have a total of 5 post and most are "UE going BK" with 

Until the sarcastic punctuation, your post had very little "information".

The UE situation is what it is and will be resolved shortly. As how you see it and I see it, it is very similar.

Once again UE is MOST LIKELY NOT going to be "merged" with another club. It will either try to raise money from members ie. assessment or file.

As I am in the same boat as you travel plans in the near future with family and friends and the possibility of scrambling to find lodging for everyone at the last minute.

I can care less who post what on a message board, does not upset me at all. Tell me all my messages suck, I have no idea, I am not offering anything, put me on ignore, It really will not bother me. Hope you feel the same way.

Just like every other member, I am try to get information where I can from who I can since UE is not providing anything officially.

Good luck to you and Happy Travels


----------



## ClubsRDead

wilkes591 said:


> Just like every other member, I am try to get information where I can from who I can since UE is not providing anything officially.



As am I.  I've heard from a few that there's a group getting together (of members) to make a bid for the club - does anyone have info on that?


----------



## Kagehitokiri2

if so i would suggest getting in touch via private message, confirming identities, then starting communication via phone/email/etc.

so none of the (originally posted on DC4MS) email lists are still going?

clearly that was one of the things UE wanted to stop.


----------



## wilkes591

ClubsRDead said:


> As am I.  I've heard from a few that there's a group getting together (of members) to make a bid for the club - does anyone have info on that?



That's funny, investing more capital in a DC, good luck!


----------



## ClubsRDead

wilkes591 said:


> That's funny, investing more capital in a DC, good luck!



I would definitely consider putting capital in if it was for deeded interest in real estate, ie real equity.  Jim's "offers" have always been "give me cash so I can pay operating expenses and inflated salaries."  No thanks.  But if we could buy a decent pool of the real estate that enough members like / want / use, and set dues commensurate to running the club - get the right # of members and scale services to match demand - why not?  The other clubs that claim to be "equity" clubs, albeit small seem to be doing okay.  Sure maybe no one (with a brain) is buying new memberships, but if we own and hold the real estate, why not?  Of course that would require some cash up front and likely a good rapport with Capital source to pull it off.  And a few people to manage the process.


----------



## wilkes591

ClubsRDead said:


> And a few people to manage the process.



And hence the problem, I am sure you know a few right?

I was a fool to join, they got me once. Never Again.

I might give them some throw away money, to keep the vacations on the books alive and the family happy or do a dues only offer with another club if it ends and makes sense. But other then that, it is not for me.

Good Luck, but I think your call sign says it all if UE goes under. At least for me.


----------



## Kagehitokiri2

*wilkes591*, literally the entire business model of timeshares (99% of properties) is to ripoff the initial buyers.

how can you write off "DCs" (which i basically define with "exchange free") because of individual business practices?

luxus is a 100% conservative DC. no debt, no leases, few services. everything else is on a spectrum between them and the most ridiculous.

its just a question of how the industry develops from here, and/or how long it takes for good business practices to really come into play, and stabilize things.


----------



## travelguy

AK.TH.UR.UEmember said:


> So my real fear is an abrupt, total shutdown, leaving many of us scrambling with already purchased tickets and no place to stay.



This is the standard ending to DCs that go bust.  I'm amazed that DC members continue to be surprised and unhedged with their travel plans when this happens.

I'd bet that this will not be a happy ending but wish all the best for the current members.


----------



## ClubsRDead

wilkes591 said:


> And hence the problem, I am sure you know a few right?
> 
> .



I don't think it would be too hard to find a couple seasoned investment bankers or former managers.  The bigger challenge might be getting the money together, but the member pool could use those whoever bring it to the table.


----------



## 3DH

AK.TH.UR.UEmember said:


> So my real fear is an abrupt, total shutdown, leaving many of us scrambling with already purchased tickets and no place to stay.




As one who went down with the LUSSO ship, my advice would be to book rooms, alternate residence, etc. as a backup plan. Been there, done that, sadly. Good luck... hoping you don't have to go through what we and other former LUSSO members have.


----------



## travelguy

3DH said:


> As one who went down with the LUSSO ship, my advice would be to book rooms, alternate residence, etc. as a backup plan.



Great advice.  When the end comes, it is usually very _SUDDEN _ sometimes followed by a complete silence from the DC corporate.

Also note that, as the saying goes, possession is 9/10ths of the law. If you're in one of the DC properties when the end comes, you should be able to finish out your trip.  No one is going to come kick you out, just don't expect any services.  Now if the utilities are shut off .....


----------



## ClubsRDead

travelguy said:


> Great advice.  When the end comes, it is usually very _SUDDEN _ sometimes followed by a complete silence from the DC corporate.
> 
> .



Curiously, this comment is based on what experience?  Certainly not the case when TH went bust on us...


----------



## AK.TH.UR.UEmember

*Member owned DC...????*



ClubsRDead said:


> As am I.  I've heard from a few that there's a group getting together (of members) to make a bid for the club - does anyone have info on that?



There are definitely discussions going on, even over the weekend....  The CRO forgot to get paid up front and there is no cash to lease new properties to fulfill on the reserations which have been taken for "phantom properties", so the cash situation is way beyond critical.....

So, I wonder if there isn't a way to get CapSource to take a major haircut (they ae facing one in any case) to create some new equity in the properties (there certainly isn't any now) and then to get some new cash from someone based on that equity.  If new $$ comes in, it would have to be backed up by real equity vale of eal estate I think, not just the usual arm waving......

Example (not accurate numbers)...

CapSource is owed say $110 million.  The homes are worth perhaps $40 million on an agressive liquidation basis but maybe $70 million if held now, with some upside maybe over the next few years..

So CapSource could (1) liquidate and lose over 60%, or (2) take a haircut on the debt in exchange for equity in a member-driven club (reduced in size) and maybe get 60% or more over a modest amount of time....

I just hope there are a few people looking at every alternative.  There is no reason to believe that JT is going to go along with anything easily, but eventually maybe he will realize something must be done....  Right now, the CRO doesn't talk to JT who in turn hardly talks to anyone, so things are muddled to say the least.

Also, something may have to be done in the next month since they only have funds for about one more payroll....

Question - how does anyone get JT to face facts and step aside....????

The end game for UE will be very interesting to watch..............


----------



## AKTHUE

AK.TH.UR.UEmember said:


> The CRO forgot to get paid up front



Kind of hard to believe a pro CRO wouldn't have taken some cash up front, unless he got paid direct by CapSource. 



AK.TH.UR.UEmember said:


> I wonder if there isn't a way to get CapSource to take a major haircut (they ae facing one in any case) to create some new equity in the properties (there certainly isn't any now) and then to get some new cash from someone based on that equity.  If new $$ comes in, it would have to be backed up by real equity vale of eal estate I think, not just the usual arm waving......
> 
> Example (not accurate numbers)...
> 
> CapSource is owed say $110 million.  The homes are worth perhaps $40 million on an agressive liquidation basis but maybe $70 million if held now, with some upside maybe over the next few years..
> 
> So CapSource could (1) liquidate and lose over 60%, or (2) take a haircut on the debt in exchange for equity in a member-driven club (reduced in size) and maybe get 60% or more over a modest amount of time....



If your numbers are right, then either CapSource needs to be paid $40 million cash, and maybe they'd take that as full settlement, or be left with some warrants in the resulting club or some very junior debt, or else CapSource would want that $40 million to be senior, secured debt, ahead of everything else, with new equity coming in to fund operations in exchange for CapSource writing down some debt or making some more junior.

If CapSource could liquidate the real estate for $40 million now, CapSource isn't going take only junior debt in return for letting the club have another go. They are going to be focused on protecting what remaining capital they have. As it is they have to feel they've been burned by letting JT keep trying.

By the way, the face value of CapSource debt may be down by $15 million to reflect the payments made and the cash they appear to have seized.

It's strange that ULEI hasn't had to file something to the SEC about the CRO situation and CapSource's position.


----------



## mhparker

removed by author.


----------



## travelguy

ClubsRDead said:


> Curiously, this comment is based on what experience?  Certainly not the case when TH went bust on us...



The more recent DC club failures - HCC, Lusso, etc.  I can't remember them all without the DC4MS archives as a reference.

My guess is that the more recent DC failures have ended abruptly because they exhausted all the possible options that many of the early failing DCs engaged to provide continuity.  Cash deprived, asset depreciated, profit losing DCs are not the M/A candidates they were back in the early days.  Now, the DCs just keep running until they exhaust all cash and/or credit and cannot possibly continue as an ongoing entity.  IMHO, UE would appear to have the record for "ability to continue business operations by a failed DC".


----------



## Kagehitokiri2

because of capsource...?


----------



## willmyclubmakeit

*forebearance*

so what did you think of UE's 8k and forbearance on the debt until September 10?  I hope this gives the management team and CRO some time to work out a deal that works for the members.  I am trying to be optimistic and have not yet booked any backup plans for trips.  Is that a mistake?


----------



## ClubsRDead

I misread your post above.  Yes, the 8K today, as filed.  An abomination...


----------



## TarheelTraveler

Clearly people on the boards are much more well informed than the general DC member, but just curious whether members are being apprised of these issues.

The 8-K indicates that CapSource is agreeing not to proceed on the following default events until September 10 for: 

"(i) the Borrowers’ failure to make interest payments due on or before each of June 5, 2010, July 5, 2010 and August 5, 2010 under the Loan Agreement, (ii) the Borrowers’ failure to maintain the minimum cash balance required under the Loan Agreement, (iii) the Borrowers’ failure to pay certain home owners association fees which have resulted and may in the future result in the creation of liens upon the Borrowers’ assets, (iv) the Borrowers’ default in the payment of indebtedness for borrowed money in excess of $500,000 with respect to a property owned by an affiliate of the Borrowers and (v) the Borrowers’ anticipated failure to make the interest payment due on or before September 5, 2010 under the Loan Agreement."   

I find it odd that there is no mention of this (and the prior quarter's earnings) on the club's investor portion of the website, and the Facebook page has a ton of travel destination postings today and members are asking about snorkeling in the T&C when there are filings that should cause a member concern over those travels.  According to the earlier filings, payroll was missed at least once, yet membership sales emails are still going out.  That dichotomy is odd to me.  Maybe the rationale is to preserve the value of the members as much as possible while things are worked out (rather than having members head for the hills so to speak).


----------



## Kagehitokiri2

TarheelTraveler said:


> That dichotomy is odd to me.



seems bizarre because of the filings (are there many examples of this level of ridiculousness? the dichotomy i mean.) and also _why_ theyre filing when they requested delisting..


----------



## DCMember

TT-  They have made no mention of the financial trouble to the members at all.  If we are not reading it here (or were at DC4MS) we would have no idea of how bad the financial situation at UE is.  Once again, I think that IMHO Jim and/or Rich are just hoping that the members can be kept in the dark and fed fertilizer and all will be fine.  If that is the case than I would be thrilled but sadly I do not see how that could be the case.  

Travel continues...reservations are made and tickets purchased.  I hope for all that these trips can occur.  Thank goodness we are currently away on a trip right now in a lovely location enjoying an amazing "over the top" home.  I spoke some to the local host and was told that they are still being paid in a timely way.  This host, for what it is worth, said that the new CRO was known to my host and was very highly thought of.  Also stated that things were expected to be solved one way or another in September.  Does the host know anything beyond whether their checks arebouncing...who knows!  My 2 cents is with the group who feels that 1100 members willing to pay dues is a very attractive group for any club so think we will continue to be traveling.  Will it be to the current crop of UE homes?  No idea but I would guess we are too valuable to just be dropped.  Many clubs have excess capacity and could easily absorb us along with the cold hard cash we are already happily paying.  Remember that annother assessment can't be done without a vote and I would guess many will say no this time or would want it paid to a new owner with stronger footing and lower overhead (high, high, high senior mgmt salaries that are getting too much like HCC)

I do know that for my part I am happy that my trip will be completed in a few days and will not be buying tickets for the next trip requiring flying until all is settled.  

Again this is just my 2 cents and what I was told at my current location.  Can't say where as I don't want to fall on the wrong side of UE.  They might want to buy me out with their stock! :hysterical:


----------



## wilkes591

DCMember said:


> TT-  They have made no mention of the financial trouble to the members at all.  If we are not reading it here (or were at DC4MS) we would have no idea of how bad the financial situation at UE is.  Once again, I think that IMHO Jim and/or Rich are just hoping that the members can be kept in the dark and fed fertilizer and all will be fine.  If that is the case than I would be thrilled but sadly I do not see how that could be the case.



I just traveled over the 8/20 weekend and the local host confirmed the same thing, the host was being paid, the bills on the property were paid. I question the information given the public financial statements and the host did not hide her concern over the current situation. I agree with the body of your post and the value of the paying members. I question what is in the quote, the company is public, there is no hiding the current financial problems. If a member chooses to upgrade, pay advance dues, or recommend a "friend", it is on them. The information is public, the risk should be know by someone doing due diligence. When it was private I could see blaming JT/RK and I am not defending them, I am just saying a person joining today or a current member not aware of the current financial conditions, only need to look in the mirror for blame.

Typically companies trying to survive, do not advertise the difficult financial situation until it is over. However, they did a press release about the CRO. Not exactly smart, if your still trying to attract new members.


----------



## willmyclubmakeit

*future*

I have also heard that the escape planners have been paid and they are still working on members trips.  This is good.  Its also hard to complain that anyone is hiding anything when the company is making press releases, 8k, 10q, and other filings stating the situation.   I don't like the situation they or we are in and hope that management, the CRO, and Capital Source finds a way out for the Club and its constituents including of course the dues paying members.  If it were not for us the answer would be simple just shut it down but we represent more value than the fully leveraged properties and I'm sure someone will realize the value of $10+ million of dues per year from members (and 1100 or 1200 of us that only one club--ER--has been able to duplicate).


----------



## Desties

Even after this morning's bleak filing, I pulled up a stock quote and it was $1.45 on the bid, $1.50 on the ask. A week ago the stock had dipped to $0.60. 

I took the Fort Collins closing as a good sign (save for those who lost their jobs). After all, if the CRO was brought in strictly for a bankruptcy filing, why close Fort Collins when DIP financing would be on the way? 

There have been no member communiques, unfortunately. My stays this summer have been seamless, thankfully. 

As a public company, it's naturally grim to see the sausage factory open for all to see. We don't know what happened behind the scenes before Lusso/HCC or even how dire things were at PE before the merger was consummated or even at ER before the rate rebalancing. This isn't meant to sugarcoat UE's position. It's not pretty. However, we don't know if any of the other players are going through even darker stretches -- or HAVE gone through darker stretches -- and lived to tell the tale. 

And even if the CRO does file for bankruptcy, there's a material diffference between Chapter 7 and Chapter 11.


----------



## BestHC

*A New Story*

*I can't wait to share my story...I should find out tomorrow whether my confidentiality agreement is no longer valid and I can open my mouth*


----------



## ClubsRDead

So what's the big story....do tell.  Lemme guess, Jim and company came up with $200MM and are going to save the day?


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## DCMember

Wilkes- I agree that with a public company nothing nothing is being hidden but UE is certainly not communicating the info to the members.  I understand why they are not doing it and would likely do the same but it would be nice if they at least put a notice on the member's only website announcing when a filing had been made and what it contained.  I don't track when their filings are due so appreciate it when somebody here does let me know.  That said we are very much enjoying our current trip (glad we are not on the outer banks!) and have always paid our dues and assessment on time to support the company and try to keep it going.  Just my 2 cents for a little more info from Jim et al.


----------



## willmyclubmakeit

I am sure if it was good information it would be posted.  I would bet that they have their hands full trying to save their equity/options, employment agreements, jobs for their team, and our club.  I hope a solution is found that allows the club to continue.


----------



## wilkes591

DCMember said:


> Wilkes- I agree that with a public company nothing nothing is being hidden but UE is certainly not communicating the info to the members.  I understand why they are not doing it and would likely do the same but it would be nice if they at least put a notice on the member's only website announcing when a filing had been made and what it contained.



I agree a little more transparency with members would benefit the club in the end. I was alluding to poster's who post "the poor people joining the club" and similar junk, since the club went public. No excuses, the information is there now. Have a great time and I am hoping we all get to enjoy more great travel opportunities with the club. The 10th is right around the corner, I guess a Web meeting will happen before then. If not, I do not think the silence is a good sign.


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## wilkes591

ClubsRDead said:


> So what's the big story....do tell.  Lemme guess, Jim and company came up with $200MM and are going to save the day?



You are confusing UE with Quintess. They have the sugar daddy that gave them 200MM. Must be nice!


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## Kagehitokiri2

quintess investment is over time. (cant imagine it cant be canceled.) 

UE is presenting 2 different sets of facts. obviously one is not factual. thats not really up for debate. 

*BestHC* is obviously talking about some kind of settlement with NDA. i presume UE violated their part of NDA? wow. not smart, but what DC has done anything smart, besides take advantage of people who keep paying? look forward to getting more detailed information. bombshells???


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## SciFrog

Quintess $200mio is over 10 years. Still anonymous fortune 500 benefactor, still paying on time (of course the longer he pays, the more likely he will go all the way). If anything also shows UE business model is not sustainable.


----------



## ClubsRDead

Haven't heard much about Quintess lately, does anyone from there post on here?  Are they selling?  Refunding?  Line of members wanting out (or in?).  Their homes look nice at least.  What is the latest on ER from this group - last I read was a big bunch of people wanting out (on here) and Case tossing cash in?  I would suspect no one is really adding new money to any club - are they?  M or AK, the "equity" models, are they growing?  Another bankruptcy in this arena will certainly slow it down just as bad as the Private Retreats or Tanner one did, or so I would think.  Thoughts?  Are any of these candidates to merge with Ultimate?  And what happens to the PE members when this goes down, do they all go down together?


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## Kagehitokiri2

IIRC Q claims with investor they are break even.

i think ER claims the same with dues hike, after case put in, what was it, $20MM?

luxus is the only club that does 0 debt and 0 leases.


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## Kagehitokiri2

http://destinationclubnews.com/News_Quintess_Names_Top_Destinations_To_Travel_With_Children.php

4 US and 1 mexico


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## SciFrog

Kagehitokiri2 said:


> IIRC Q claims with investor they are break even.
> 
> i think ER claims the same with dues hike, after case put in, what was it, $20MM?
> 
> luxus is the only club that does 0 debt and 0 leases.



It is easy, the investor pays for the debt interest, the members dues pay for running the club. So the club can run a few years without growing. Why is there debt? The homes are nicer (ie more $) than ER or A&K, yet deposits and dues are the same.

The club has a few leases, but it is to match the deferred deposit for a limited number of new members. The home portfolio has been actively worked on, removing the unpopular ones replaced by better destination and/or homes.


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## ClubsRDead

It would seem to me (not knowing full details of Quintess, or of the involvement or role of their investor) that what you're saying is they are basically running yet another unsustainable club.  If they have debt and interest that cannot be covered by dues and member fees, then it's too high - right?  And their dues already seem relatively high, or "market place" from a casual glance.  One has to assume if the investor is carrying the loan costs, then he owns the collateral being secured by the loan - or has a receivable against the club.  Or am I missing something?  The club is worth nothing without dues paying members, but it's worth even less with high debt.  Isn't that the problem we're seeing this very moment at Ultimate?  Dues won't cover expenses and debt costs?


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## Buon Viaggio

Seems like Case is injecting the $20 mil just to bridge the gap until the new dues structure is completely phased in.  The new member sales have been increasing every month, inventory is being adjusted and the 3 in 1 out ratio remains in effect.  A majority of members on the waitlist still pay dues and travel.  ER lives within it's means more so than Quintess and so the long term stability and prospects are much stronger.  Members are very happy overall.


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## SciFrog

ClubsRDead said:


> It would seem to me (not knowing full details of Quintess, or of the involvement or role of their investor) that what you're saying is they are basically running yet another unsustainable club.  If they have debt and interest that cannot be covered by dues and member fees, then it's too high - right?  And their dues already seem relatively high, or "market place" from a casual glance.  One has to assume if the investor is carrying the loan costs, then he owns the collateral being secured by the loan - or has a receivable against the club.  Or am I missing something?  The club is worth nothing without dues paying members, but it's worth even less with high debt.  Isn't that the problem we're seeing this very moment at Ultimate?  Dues won't cover expenses and debt costs?



The current debt was created because the early members paid less deposit, the home price/deposit ratio can now allow to get homes without debt because homes are cheaper. The original plan was to raise deposits, but there is less need for that now. There are savings when more members will join, their dues will also cover some of the interest. But of course the club will need to grow at some point, but that is a few years away. Also once the club will be full, it will move to one in one out and should get revenue from the non refundable portion of the deposits. Well, at least this is how I see it. Not ideal but somewhat sustainable. 

And if anything just shows how UE has little chance to survive.


----------



## SciFrog

Buon Viaggio said:


> Seems like Case is injecting the $20 mil just to bridge the gap until the new dues structure is completely phased in.  The new member sales have been increasing every month, inventory is being adjusted and the 3 in 1 out ratio remains in effect.  A majority of members on the waitlist still pay dues and travel.  ER lives within it's means more so than Quintess and so the long term stability and prospects are much stronger.  Members are very happy overall.



Of course ER is in a better position, they were much bigger and established when the crisis hit. Q had not reached a critical balance yet.


----------



## Desties

SciFrog said:


> And if anything just shows how UE has little chance to survive.



As the naked emperor due to the public filings, we know that UE's viability is challenged in this dicey climate. September 10 will either be a good day or a terrible one. 

However, even in this gloomy stretch for vacation real estate, UE still managed to add more new members than those that went on the resignation list. If Quintess and other clubs bent over backwards to offer Lusso refugees sweetheart deposit-free deals, the value of UE's much larger base of dues-paying members should be even more compelling in this dry lead market. We're the Glengary leads! 

I'm hoping it doesn't come to that, and that either a sugar daddy, a realistic CapSource, or a friendly buyout surfaces, but the only reason that all three of the largest non-equity clubs aren't self-sustaining at the moment is that investors aren't making up their investments in real estate appreciation. If you believe that the devaluation of luxury travel properties is temporary, then so is the lack of viability of the model itself. 

UE isn't in a position of strength right now, but it still has the smaller resignation list among the three largest non-equity clubs (unless something has changed at Q or ER since the DC4MS days) and -- unaware of trends at ER or Q -- it has been able to grow its membership base through the first half of this year. UE's major shortcoming is that it began the year without the seemingly healthier cash backing at the other clubs. It has had to pay the price for that shortcoming this summer, but the model isn't as broken as it is not all-weather. These just happen to be the days of galoshes and ponchos.


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## ClubsRDead

I don't really understand your theory.  A smaller resignation list doesn't really mean much.  Realizing that maybe 1/2 of their membership is from TH and another 1/3 or so from PE, those members have no redemptions right now, so what would they be resigning for?  They're basically dues paying members for travel only, right?  Bringing in new members is one thing, but bringing in new members with cash is another.  It looks like none of the clubs have been able to do that.  Today a member, perhaps next week a creditor.  We've all seen this before.  UE likely has a chance to redeem themselves if they come up with a large cash capital partner, but who would do that at the current debt levels on the homes?


----------



## Kagehitokiri2

i think if nonequity was transparent, and not high margin, that would be totally different from seeming like a scheme, whether a scheme was the intent or not. some of my thoughts >
http://tugbbs.com/forums/showthread.php?p=882883&highlight=nonrefundable#post882883

ER has gotten a lot of nonrefunable deposit payments >
http://tugbbs.com/forums/showthread.php?p=882265&highlight=nonrefundable#post882265


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## Buon Viaggio

The ER deferred deposit plan doesn't seem like a scheme at all - more like a strategy.  It is helping to sell new memberships but most members are joining under the traditional plans.  The anonymous member quote is inflated.


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## Kagehitokiri2

i was referring to *Desties*' comments on real estate. 

the "model" of DCs has come up before. 

should also clarify nonequity/equity isnt as clear as i might have made it sound.


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## Desties

SciFrog said:


> It is easy, the investor pays for the debt interest, the members dues pay for running the club.



FYI, it seems as if UE would be cash flow positive under the same scenario.

It's not pretty, but UE did post positive EBITDA this past quarter. The operating loss was $1.4 million, but back out $2 million in depreciation and amortization, another $0.3 million in the loss on property sales, and you're more than there. 

Plus, if the $3 million in annual savings on the closing of Fort Collins is accurate, we're talking about another $0.75 million every quarter.

The cash flow dagger is the $3 million forked over to CapSource in interest expense every quarter. The liquidity dagger is that UE began with so little cash when it went public last year. So -- sans debt -- the UE model would appear to be more than sustainable, unless I'm missing something.


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## wilkes591

Desties,

Do not forget about the amount of executive compensation two CEO, a voluminous amount of VP's, and the broad of directors pulling down $60k with a free elite membership. Management was not even trying to make the club work. UE had limited cash on hand and was not making payments then management comes up with the idea of 27 additional leased properties for peak season. I honestly do not see how UE will not file, most likely chapter 11. It will get rid of the equity interest, it would eliminate executive compensations contracts, A/P has been allowed to balloon and would be eliminated, other unsecured debt is eliminated, the membership deposits are toast, and the former T&H membership agreements are eliminated. Capsource takes a haircut and provides DIP. The club would be much more attractive to a potential buyer or viable on it own.  It would take six to eight month to settle the unsecured debts for pennies on the dollar. Then most likely it is sold to another club before exiting chapter 11. We will find out on Friday, most likely Chapter 11 is file on 09/10/2010 or 09/13/2010.


----------



## Jack1234

While UE has a "low" number of members on the resignation list, that (IMHO) is solely because the T&H and PE folks can't resign yet.  There was another "misunderstanding" with the PE folks who signed a contract stating clearly that they could resign 18 months after the date of execution of that contract.  Well....after the 18 months were up and some number opted to resign they were told there had been "some confusion" and it was really 18 months post merger or Feb 2011.  I can assure you that there would be a larger resignation list if that "confusion" had not occurred.  Yes, they could have sued but there was nothing to recover so I think most just opted to continue to travel.  

It seems that the most likely scenario is to allow the club to go into BK, wipe out all of the obligations, and then have another club come in and offer to cherry pick the properties at a good price and grab the dues paying members.  Way too valuable to another club to let us all walk.  While I think most or all of us are unwilling to pay another deposit, there are enough clubs with excess capacity or who want to grow and would love even 30-50% of us to pay dues to shore up their cash flow.  Just glad I have no tickets purchased for any of my upcoming trips as I wouldn't bet on them occurring as planned.


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## SciFrog

Which clubs you think has overcapacity?


----------



## Jack1234

I am purely guessing but remember that AKRC was said to have had overcapacity in the not too distant past (could be on target now).  UE wants to sell home due to having too many so they still do.  ER is looking to sell homes so perhaps them.  I know little about Q so would defer to your knowledge there but remember they wanted the Lusso folks and seemed to be able to handle them nicely.  Of course at fire-sale prices for RE, any club could add on properties for cheap $$ while gaining members with little marketing costs.  Anybody still paying dues and traveling with UE is likely to be a valuable asset to a club that is looking to grow.  They also have some excellent properties that would be a great investment at the right price.  I continue to hope for the best and figure I'll still be traveling in the future, though which "DC's name" I will be traveling with could easily change after next week.


----------



## NeilGoBlue

I don't know the exact numbers, but AK overcapacity is either eliminated or almost eliminated with the new members (both equity and trial)


----------



## Buon Viaggio

ER is very close to normal occupancy right now and is even increasing units for upcoming summer seasons.  There are units for sale but new properties have been added this year so a balancing of inventory is really what's happening.


----------



## Kagehitokiri2

capacity doesnt matter. the cash flow is valued.

* ER and Q are nonequity.

* UE and oyster are takeover targets.

what we will really see is whether ER and Q are really breakeven. (both with dues increases, Q with investor)

and whether there are going to be more DC startups soon. (not exchange companies)

equity (varying) >
- AK
- m private residences
- hideaways club
- EE
- luxus vacation properties
- rocksure (third fund - euro capitals - is larger than first two)

* what about equity mergers??


----------



## Jack1234

Kagehitokiri2 said:


> capacity doesnt matter. the cash flow is valued.



That is the bottom line.  Too many people at UE willing to pay dues for another DC to ignore.


----------



## Desties

*capacity vs. scalability*

It's not about capacity, because only ER has a shot to absorb a club with 1200+ members without substantially tacking on real estate.

This is really about the opportunity to scale. UR spent roughly $100 million to buy T&H's 650 members and most of its properties. It became a major league DC overnight. Along comes UE now, with nearly twice as many members (even if 100-200 decide not to follow) with only a bit more debt on its books than T&H sold for. 

The UE model may be too leveraged, and that has created the cash crunch we see today that finds UE behind on its CapSource payments and making desperate decisions that sacrifice the long-term for near-term liquidity (like the small loan collateralized by future new member deposits or the rebalancing of the calendar, etc.). This doesn't mean that the UE model itself is broken. It is EBITDA positive (at least this past quarter) and that's with high salaries and the Fort Collins office that is now closed. 

I have no idea what UE will do this month, but I do have confidence in my 1200+ fellow members as jaded vacationers and our value to either a UE investor or a potential buyer.


----------



## SciFrog

Well I am going to repeat myself, but with no clubs with overcapacity right now, most if not all clubs in survival mode, UE is on it's own unless it comes out of a chapter 11 with little debt. 

As a Q member, I would be shocked if we do another Lusso deal and would likely resign as this would weaken the club beyond repair. Deffered deals? No problem. But new members without some sort of deposit? No thank you.


----------



## Desties

SciFrog said:


> UE is on it's own unless it comes out of a chapter 11 with little debt.



We'll see. 

This isn't just about Quintess and ER. Why can't this be an opportunity for Ritz-Carlton or any of the timeshare heavies to make a splash in the DC space. It's awfully tempting to refuse 1,200+ dues-paying members who generate more annual revenue than tens of thousands of timeshare members (in this otherwise bone-dry lead climate).

Did Quintess go too far for Lusso? Sure. It offered them no deposit memberships, with promises of getting their Lusso deposits back in a few years (similar to T&H and UE) -- and even went one step further by kicking back a bounty to Lusso per member, if I recall. However, even that wasn't enough to win everybody over. 

I don't know who will step up with the sweetheart deals for UE members, but I would be surprised if Quintess wasn't one of them. Think about it. Lusso was a good way for Q to tack on to its base, but UE is the ticket to challenging ER. Any deal that requires any form of deposit -- now or deferred -- is toast. Even the equity clubs may only get a handful of new members that way. Any deal that doesn't dangle deposits returned after 5 years or so is just asking for churn to inch higher as folks have no reason to stick with the club if dues have to go up or an assessment is imposed.

I'm hoping that it won't come to that, and someone bails UE out first, but I guess we'll all know a lot more a week from now.


----------



## Jack1234

Desties-
I agree with you 100%.  No way can any of the other clubs not at least take a look at this and it will require some sort of sweetheart deal.  Will it take a BK filing first to wipe out current obligations, perhaps, but none of the members really have any assets to lose so let's strap in for the ride and hope it's quick so we can get back to fun rather than spending too much time here.

Thanks all for posting info in almost real time.  We learn more here than anywhere.


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## Kagehitokiri2

indeed i posted the confirmation that RC is simply reselling unsold fractional inventory as "DC" so marriott should be happy to pick up people to exchange time for money and a "contract"... whole question with RC model is what happens as they grow... although when fractional owners exchange in, thats more time for the DC..


----------



## wilkes591

SciFrog said:


> Well I am going to repeat myself, but with no clubs with overcapacity right now, most if not all clubs in survival mode, UE is on it's own unless it comes out of a chapter 11 with little debt.
> 
> As a Q member, I would be shocked if we do another Lusso deal and would likely resign as this would weaken the club beyond repair. Deffered deals? No problem. But new members without some sort of deposit? No thank you.



Scifrog,

Why wouldn't Q look at the membership base? There are very few rules now that Capsource has taken over with equity and minority debt holders blessing at UE. Capsource could sell anything or everything. Read the 8-k. Capsource could sell a selected membership base(Elite and Signature) and selected properties then file chapter 7. I think all option are on the table for any DC or group to pick and choose. I do doubt that anything will get done before Friday. However, Chapter 11 and continued operations is most likely come Friday. That is the perfect situation for ER, Q, and any other group or DC to pick and choose the most beneficial options with no debt. I doubt very much that Q is not in the "mix" already with Capsource. I doubt additional members will weaken any DC in this environment. Do not worry, Q's sugar daddy will be in the mix as well as Mr. Case for ER. Bigger is better especially when *BIG* Ego's are involved.

The 1200 membership base is just to valuable, of course it would most likely be 1000 with attrition.


----------



## willmyclubmakeit

*Q*

I heard rumors Q has been looking at UE for months.   However will they show up at the altar this time? With cleaining of the balance sheet and possibility the ability to cheery pick assets/leases, I would be shocked if they were not a contender.  If you can eliminate/reduce the G&A per member/home much further and significantly increase occupancy percentages , this could be the way Q could compete and survive over the long haul.  The biggest question for the succeful bidder is how do they avoid alientating the membership base with bookings in place and promised leases so that the members are retained at historical 95%+ levels.


----------



## SciFrog

No doubt they are looking. However there are several big problems:

UE homes are not up to Q homes standard IMHO

Capsourse as senior debt holder will rather liquidate homes than simply forgive debt, and no club can acquire members and their deposit liability without getting the homes for free


----------



## NeilGoBlue

Seems to me it really simple in today's market scenario.  Either the members what are being acquired have to put up equity (free and clear homes, etc), or they have to pay enough in dues to give the investor (Q, ER, etc) a return on their investment. 

It seems unlikely that UE members will put in money or that capsource will cut the debt enough to create equity AND it seems unlikely that UE members pay increased dues to give the 'investors' a return on their money.

The only way it makes sense is if there is a club that has excess capacity, and just getting dues make sense.

I don't see it.


----------



## 3DH

And, on another note...

M Private Residences has one of it's Las Estrellas units at Punta Ballena (Cabo) listed for sale... guess they, too, are trimming inventory.
LAS ESTRELLAS 201 (M website)
Real Estate listing

Similarly, ER has two of their Villas listed in the same area...


----------



## wilkes591

SciFrog said:


> No doubt they are looking. However there are several big problems:
> 
> UE homes are not up to Q homes standard IMHO
> 
> Capsourse as senior debt holder will rather liquidate homes than simply forgive debt, and no club can acquire members and their deposit liability without getting the homes for free



Yeah, Capsource is going to get 100% of it debt back by liquidating homes. What planet have you been living on? The Vacation Real Estate Market is BOOMING! Right! Capsource would be lucky getting 50 cent to a dollar on forced sales of vacation homes in this market. Take a look around when your on vacation, for sale signs everywhere. Either way Capsource is the biggest loser in UE's current situation.

Capsource is in a very difficult position and the real estate and members bundled could be worth more then just vacation homes in a second home market. 

I stayed in a Q home in Los Cabo, not much better then UE's signature homes in Cabo Del Sol and Pamilla and I would even say UE's Elite ocean front Villa Paraiso is superior to the Q home I was a guest in.

Either way no need to get your panties in an uproar. This is going to play out and you will not be effected by the outcome. The only ones that lose are the UE members(like me), Capsource, a number of vendors who UE owes money, and some employees at UE. 

FYI - I could become a Q member for a minimal deferred deposit no where near the published deposits and dues below the published rate on Tuesday if I wanted. The minimal deposit is only required after two years, if I want to continue and become a "member". Everything is negotiable per contract per DC. Only fools order from the menu. And if Perry were here he would say only fools join DCs.


----------



## ClubsRDead

It makes absolutely no sense that any club with "extra capacity," if there is such a thing - or any club in general "pick up" us members.  Who would it be?  I can't see Q or ER bringing us in for dues only.  Why would they?  What would their existing members say?  I further can't see our homes being of any value to them as they are typically standalone and not the same at their model, ie like units in clustered locations.  And why would any of them combine our overpaid mgmt team into theirs?  Its evident that UE has no intention, nor ability, to pay redemptions and this is just a repeat of the TH scenario.  The only difference here is 3x the debt and another 400+ members, with less owned assets / members.  So the problem got worse, not better.  Best thing for us all may be a filing so someone can hopefully swoon in and try to pick up the pieces.  I'm just sick that they collected so many of our dollars in upgrades and assessments and did very little other than pay themselves high salaries.  Why in the world didnt they reserve for debt and even worse, why tell us the rosey stories in the member newsletters and conference calls?  Jim and co lied to us all, said they had a "full pipeline" and things were better.  Then the next month, and since, they have missed debt payments.  As a public company this has to be some sort of fraud or misrepresentation.


----------



## wilkes591

ClubsRDead said:


> I further can't see our homes being of any value to them as they are typically standalone and not the same at their model, ie like units in clustered locations.  And why would any of them combine our overpaid mgmt team into theirs?  Its evident that UE has no intention, nor ability, to pay redemptions and this is just a repeat of the TH scenario.  The only difference here is 3x the debt and another 400+ members, with less owned assets / members.  So the problem got worse, not better.  Best thing for us all may be a filing so someone can hopefully swoon in and try to pick up the pieces.  I'm just sick that they collected so many of our dollars in upgrades and assessments and did very little other than pay themselves high salaries.  Why in the world didnt they reserve for debt and even worse, why tell us the rosey stories in the member newsletters and conference calls?  Jim and co lied to us all, said they had a "full pipeline" and things were better.  Then the next month, and since, they have missed debt payments.  As a public company this has to be some sort of fraud or misrepresentation.



Everything I am posting about is after a chapter 11 filing, this upcoming Friday. No deposits, No debt, and No Equity holders. Read the 8-K, Capsource is running things now. Anyone can come in today and cherry pick the assets and members. What do you think the members would not get a new "contract" that benefits the new DC. It is going to be sign the new contract or stay with UE. No deposit liability is going to any new club. This is a FIRE SALE in a down market. Someone is going to make out with the choice assets for pennies on the dollar.  

As for fraud good luck, A public company that did not trade any stock. JT and RK were living on a different planet.


----------



## Desties

ClubsRDead said:


> As a public company this has to be some sort of fraud or misrepresentation.



As long as the SEC filings are accurate -- and it's the only reason we know that UE hasn't paid CapSource since June -- it's a legitimate crisis. The last time the club had a member call it was still paying its debts and the pipeline may have been healthier (there was after all, net growth during the first half of the year).

And SciFrog, you're missing the mark here. This isn't a game of "we're too good for UE properties" -- though I'll argue that the Elite UE beach houses in Delray and Indian River Beach are way more marketable than Q's Miami Beach property. No, the point here is that Q would grow in size by 3x-4x if it can pull this off. It can roll Elite into its own portfolio, and then offer a mid-level Signature and an entry level Premiere -- with reciprocity between the clubs at the appropriate rates.

No matter what happens to UE, there will always be a market for entry-level DCs -- and not just a matter of 7-night a year plans at some clubs. There's a reason why HCC and PE were the fastest growing ORGANIC clubs. HCC was perhaps too entry-level (and with many other problems, naturally), but you don't think a club will step up to fill the void if UE does in fact go kaput? 

I remember on DC4MS when one of the folks from the growing Q resignation list posted about financial hardship. Don't you think some of the Q's resignation list members would reconsider if they can trade down (at least for a  bit of time). I also wouldn't put it past ER, though Steve Case seems to be oblivious when it comes to any DC that isn't ER. 

I'm braced for the worst, but still optimistic that our collective value as members will have real worth.


----------



## Desties

ClubsRDead said:


> I can't see Q or ER bringing us in for dues only.  Why would they?  What would their existing members say?



History says differently. T&H was brought into UR for dues only (and deposit refunds after 5-7 years). Lusso members were offered membership at Q for dues only (and deposit refunds after a certain number of years). 

Clubs do this because they can scale quickly. And offering deposit refund that they never received in the first place is justifiable because it's based on the addition of 1, 2, or 3 deposit-paying members way off in the future (when -- if all goes well -- will be a much larger club).

And don't even worry about a club picking up UE execs. It didn't happen with T&H. It didn't happen with Lusso. Even if UE files Chapter 11 and emerges intact with a much cleaner balance sheet, I'd be shocked if Jim and Rich are still around. CEOs get jettisoned in the bankruptcy process pretty often. Just check out how Mark Shapiro got the heave ho at Six Flags during the process. You are more valuable than you think.


----------



## ClubsRDead

Desties said:


> I'm braced for the worst, but still optimistic that our collective value as members will have real worth.



I just don't see it.  We're only worth what someone would "pay" for us.  And by them (ie, Q, ER, AK) paying, that means giving us something for nothing, or that hurts their overall business entity and client base in the long run.  There's no guarantee that any large # of us keep paying, and no obligation on our part to do so.  So, what is that "worth?"  Sure, someone could make us all sorts of concessions and modify their club offerings, availability, short change their paying members, etc to bring us over -- even buy some of the homes to try to fit us in, but they can't guarantee we'll like it and keep paying, nor are we obligated to stay for any length of time.  Who would do that?  Say they buy those "nice" homes you mention, and cut us a deal on dues...how many of us have to go and what do we have to pay for that to work monetarily on their end?  And we still have to go BK so they can legitimately get rid of our redemption / bonds, no club is going to absorb them.  In simple English, "we be f**ked."


----------



## Kagehitokiri2

again the wild card is how bad things are at ER and Q.

in addition to UE, oyster would presumably be another takeover target.

any club doing ok might be interested in bulk property buys. 

after case acquired ER, they did acquire a couple smaller clubs. veras group had a backdated story on it.


----------



## SciFrog

You guys also seem to forget that Q is supposed to be limited at 800 full members (or 1,000 members). Maybe they could create another club using UE remnants after chapter 11...

Regarding Capsource, are you guys implying that debt is greater than the current value of the homes? If so, it is far worse than I thought, and where have the deposit money gone? And what were the people who poured money in UE when they became public thinking?

My opinion is surely controversial, but ER and Q have more to gain if UE goes down because of the deferred memberships offered at the present time. These two clubs are stable and can wait several years for deposits to be paid.


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## wilkes591

ClubsRDead said:


> And we still have to go BK so they can legitimately get rid of our redemption / bonds, no club is going to absorb them.  In simple English, "we be f**ked."



Yes, there are many possible outcomes on the table and one is simply Capsource gives up and sells the Real Estate. You are right all member's are going to take a hit. The question is we will be able to still travel with UE or someone else. 

I think Capsource would have just forced chapter 7, already if that was their plan. Why go through all this and cut most of the executives loose and still allow members to use the properties?


----------



## wilkes591

SciFrog said:


> My opinion is surely controversial, but ER and Q have more to gain if UE goes down because of the deferred memberships offered at the present time. These two clubs are stable and can wait several years for deposits to be paid.



You think Q is stable. You do not know, it's private. ER certainly was in trouble. ER did some heavy handed things to it's member's like just altering everyone contracts and raising dues and limiting the number of days. If it was not for Case, I doubt ER would not be in a very different position then UE.

If UE goes down , ER, Q and others will make offers to the UE members. Sweeter then what is available now.

Nothing controversial about UE going under, mangement had no problem doing it. It is certainly possible that Q or ER would not be interested. It is also possible that they could be in a difficult spot themselves.

Good luck to all!


----------



## SciFrog

wilkes591 said:


> You think Q is stable. You do not know, it's private. ER certainly was in trouble. ER did some heavy handed things to it's member's like just altering everyone contracts and raising dues and limiting the number of days.



Q was the first one to raise dues for all members. You are not entirely correct in saying Q is private, as many members are also investors. Yet you are correct in saying we probably do not see the whole picture, we don't even know who the sugar daddy is. 

What we see though:

Q just launched the Tour Club

The money from dues and from the suggar daddy keeps rolling in every quarter

Unpopular homes are being replaced by nicer ones

There is no more overcapacity

Monthly expenses have been reduced below the targets set in 2008

The club has planned to survive without new membership sales for a few years

One caveat is the resignation list which is still important. However with minimal penalties to be on that list, I am not sure all people on the list would actually resign when their turn came up. On the negative, there are also too many homes in Cabo...

Last Q cannot upset it's current base. If they were to absorb UE, it might not be the club we signed for anymore. I would most likely resign.


----------



## ClubsRDead

wilkes591 said:


> Yes, there are many possible outcomes on the table and one is simply Capsource gives up and sells the Real Estate. You are right all member's are going to take a hit. The question is we will be able to still travel with UE or someone else.
> 
> I think Capsource would have just forced chapter 7, already if that was their plan. Why go through all this and cut most of the executives loose and still allow members to use the properties?



In reality, Cap Source will want to reduce their "hit".  No one probably cares about ours.  If they foreclose and do a 7, they would lose control of their own destiny.  If they do an 11, they get to try to retain structure.  I haven't seen any sign of them cutting executives loose, to what are you referring?


----------



## Buon Viaggio

I agree with SciFrog here.  ER has really shaped up financially and new members are joining every month and many members are upgrading.  Expenses have been very smartly reduced and the financial plan  going forward seems realistic and achievable.  I really don't see them bringing in a mass of UE members without deposits and then having to pay out 3:1 the current resignation list at the old 80%.  That would really put a wrench in the plan and they know they can continue on a slow growth conservative path.  I would be surprised and possibly the only way would be if Case made another cash infusion.


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## ClubsRDead

Members steadily joining and paying the membership deposit required for their club level is the ONLY way that ER (or Q, or others) are moving towards their model or plan.  UE has proven that taking on members for dues only doesn't work, even when they charged us the assessment.  Going public didn't work either or raise any cash.  The only thing that really restores ERs viability other than a bunch of sales, which is hard to believe they are having, is some order being restored to the real estate market.  Down prices make it a horrific time to have to liquidate assets to pay redemptions.


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## BestHC

*Secured Dept & Unsecured*

*Well then..Who is considered  secured dept and who is considered unsecure dept....I think I hear them blowing taps*


----------



## ClubsRDead

You maybe want to make some sense of what you just posted?

Where's the "big news" you had?


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## wilkes591

ClubsRDead said:


> Where's the "big news" you had?



Just another one line poster. Then they we say we told so!

Didn't you see my "Big News"!


----------



## Desties

SciFrog said:


> I would most likely resign.



Isn't that the same thing as *not* resigning when it comes to Quintess -- since it forces folks on its resignation list to continue paying dues?

I'm joking -- and I jest only because, while we may not see eye to eye over the years, I'm a Lusso-esque offer away from Q if UE does in fact go under next week. 

You didn't resign after the Lusso deal. Why would this -- a move that could catapult Q into serious contention for DC supremacy and drop the per member costs given the economies of scale -- force you over the edge? 

It's not easy. As a UE member from the PE side, I too initially resented the nature of the "zero to deposit redemption" offer to T&H. However, it is what created a club large enough to offer the widest variety of properties at the lowest price points. Too low? Perhaps. Too much debt? Obviously. 

However, if you don't think that Q's board and that mysterious benefactor aren't eyeing how long it would take them to tack on 1200+ new members and realizing that this is the chance of a lifetime, you're not being realistic. 

Yes, I hear you on the 800 full member cap. That is for what would be the "eilite" club, and UE may get you there, with two more mainstream-accessible clubs to boot. And, remember, Lusso sold members on 550 as a cap -- the magical number where it would close up its marketing department and self-sustain. It never got there, did it?

This is going to stink for UE members, as Jack said. However, it's going to be a golden opportunity for the hungriest club -- or outsider wanting to enter this market as the immediate silver medalist in scope.


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## SciFrog

You can resell your unused nights through the club, although I do not have anymore details. 

At the Lusso time, Q had overcapacity. It kind of made sense, although it weakened the club somewhat.


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## willmyclubmakeit

*future*

I would also hop about the Q train even without any offer for a return of my deposit as long as I did not have to pay any further deposit and only pay differential dues to move from signature to lusso/elite or the new signature--why not make such an offer and I would bet as long as our current renewal rates were maintained (and Lusso did a management/lease agreement with Cap Source for UE properties for say through April 2011 when spring break requirements would be over) most of us would pay our dues to Q (and our renewals would come up during that period also to further reduce the risk to Q).   So little if any liabilties assumed by Q, short term rental of houses they do not want long term and longer term rental/purchase of some others and lots of dues to fund this.....sounds pretty attractive to Q (it could even eliminate the premier club and force those "members" to step up to a higher level if it wanted to avoid having too many price points).  Time will tell but if we are taken care of and adopted, I'm sure our loyalty that has kept us paying dues to JT even when we had doubts about the future and were pissed re: the assessment would continue in the new tender hands of Q or whomever.


----------



## Jack1234

Desties said:


> However, if you don't think that Q's board and that mysterious benefactor aren't eyeing how long it would take them to tack on 1200+ new members and realizing that this is the chance of a lifetime, you're not being realistic.
> 
> Yes, I hear you on the 800 full member cap. That is for what would be the "eilite" club, and UE may get you there, with two more mainstream-accessible clubs to boot. And, remember, Lusso sold members on 550 as a cap -- the magical number where it would close up its marketing department and self-sustain.



No question they need to consider some sort of offer to UE or its members.  I also wonder how many of the Lusso folks decided to go with Q.  Anybody know what percent took what seems to have been a sweet offer considering the alternatives?  If you figure that out of the 1200 there has to be some number who are just fed up with the whole DC model and will walk from any offer and choose another way to travel I wonder how many are left who would consider another offer...maybe 800-900?  There could easily be a couple of clubs putting offers out there if this isn't put together as a package by Cap so Q might not hit their ceiling.  That would be (I think) a great problem for any club to have to turn away people wanting to join.  Remember when ER had a waiting list???


----------



## NeilGoBlue

The numbers don't work unless the refugees pay deposits or a substantial surcharge on dues...


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## SciFrog

Looking at current membership, lusso deal was less than 50...


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## Jack1234

SciFrog said:


> Looking at current membership, lusso deal was less than 50...



Do you know how many potentials there were?  Trying to look at the percentage of those who received the offer and actually took it.


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## ClubsRDead

Well, I concur with GoNeilBlue, unless it (deposit revenue or dues increases) is substantial, it doesn't work - so why offer it?  As to the above post - even if Cap Source said they would stay in, why even do so until you get through next spring break knowing that a large % of the reservations from now until then are a) in house not part of the CS loan, b) in leased homes that CS would have to provide the capital for, or c) are predominantly in homes technically "owned" by UE but part of various one off deals from PE or other - and likely in various phases of default or foreclosure all on their own.  I hope that none of us believe that if CS is truly providing the DIP here that they are funding cash flows for either leased or non-CS owned assets.


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## Kagehitokiri2

what numbers do work? since when has there been reasonable behavior in this industry?

any deals between UE and ER/Q will be revelatory. when you dont have the facts, and logic doesnt matter, hard to predict.


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## SciFrog

Wasn't Lusso potential around 120?


----------



## SciFrog

Kagehitokiri2 said:


> what numbers do work? since when has there been reasonable behavior in this industry?
> 
> any deals between UE and ER/Q will be revelatory. when you dont have the facts, and logic doesnt matter, hard to predict.



IMHO the least any buyer should propose is 70-80% of the current offers, including the deferred ones.


----------



## wilkes591

ClubsRDead said:


> Well, I concur with GoNeilBlue, unless it (deposit revenue or dues increases) is substantial, it doesn't work - so why offer it?/QUOTE]
> 
> What clubs are even requiring a deposit, right now? I can get a trial membership with ER or Q for dues only. Call ask and start negotiating, if you do not believe me. 2006 and 2007 are in the rear view mirror, people are not "lining up" to throw down six figure deposits or even start paying just dues in DCs. Waiting list to join, LOL!
> 
> If, when, and how UE goes under there will be options available for any member with money to spend. I have learned a lot from PE to UE to whatever is next. Does it hurt to lose the deposit, you bet. I doubt I will have to fork over another to join another DC. Just to many offers out there right now with very few takers.
> 
> What works and does not is debated here, it is not what happens in the "real" DC world.


----------



## ClubsRDead

That's pretty much my point.  We can all join anywhere we want, anytime - even now, prior to our soon to be demise, for dues only.  What we already know, however, is that "dues only" doesn't work.  You have to ask, why would Q or ER, or anyone, do this for a bunch of us?  Just doesn't make sense to add insane to unsustainable.


----------



## Desties

ClubsRDead said:


> You have to ask, why would Q or ER, or anyone, do this for a bunch of us?



CRD, you keep repeating this point -- and I think I've pointed out how that is exactly how it has gone down in the past with the two largest clubs to go under (T&H and Lusso -- I'm not including HCC, because there really was no product on the market in the DC universe that was similar).

T&H went under 4 years ago, and UR was able to get 650 of the 750 members to stick around by offering dues only memberships AND their original deposits back in 5-7 years.

Lusso went under 2 years ago, and Q stepped up for the biggest bit by offering the same terms PLUS offering to pay Lusso if a certain number came over (I'm fuzzy on the specifics, but it did happen). 

Neil is correct about equity-based clubs like his own A&K making this kind of sweetheart deal -- it will never happen -- but non-equity clubs have a pattern of doing this very thing. EE had a deferred deposit program, but that won't fly with non-equity clubs. 

The "dues only" offers are likely to come, especially since this is the biggest exile flotilla that the industry has ever seen (if UE can't save itself this week). And some club is bound to offer the same kind of deposit return after X amount of years because there will be no reason for a "dues only" member to stick around if the climate gets rough (as both Q and ER saw when they dramatically bumped up their annual fees) if there is no incentive to stick around. 

CDR, I'm not sure if you're an active UE member or not, if you came from the UR side or the PE side, if you're on the resignation list or got out, but I think that if you are an active dues-paying member of UE that you will find the opportunity to continue to travel without a deposit. You seem to be shooting down the possibility, when history shows us otherwise. Economies of scale show that it can be a sound business decision to make the sweetheart deals. UE was overly leveraged, and got stung when real estate prices fell. 

Buckle up, folks. It's going to be a wild week.


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## ClubsRDead

You're still making my point for me.  Of course there are dues only deals out there for us.  There always has been.  UR was basically a dues only deal for us when we left TH, where did that get us?  Less homes, weaker travel options and now this.  AK has been chasing us for years under their "trial offer."  And, UR was offering "discovery" deals to the public, basically the same thing.  I know we have the option - the fact is they don't work.  Clubs who claim to be fiscally responsible (ER and Q) can't gain much by making these sorts of offers to us.  Sure, they might - but what do they gain by doing so....and more importantly, why would they offer redemption rights at all?


----------



## ClubsRDead

Desties said:


> Economies of scale show that it can be a sound business decision to make the sweetheart deals. UE was overly leveraged, and got stung when real estate prices fell.
> 
> .



And....I don't understand this.  Are you suggesting it is a sound business decision to make a fiscally irresponsible one?  

And yes, UE has a lot of debt, but do you really think falling real estate prices are the culprit of this current situation?  What about a broken, if not totally unsustainable business model (which they copied AFTER it was proven to NOT WORK) in conjunction with ridiculous expenses - high salaries, huge sales and marketing budgets (in a no-sales environment) and super high transaction costs on deals that brought no real revenue.


----------



## Analogue

How about seeing Demeure step into this fray. According to their website Rob Mcgrath is  part of the team.

He may want his old company back and it looks like he's got wealthy partners.


----------



## ClubsRDead

That's a good one.

Wealthy partners, or not -- can you see it?  Sure, McGrath does an offering to get "his" members back.  Meanwhile you have 400 involved in a lawsuit with AK over the TH deal.

I just don't see a bunch of folks lining up to be led by Rob M again.  Nor does he likely have the money.

The way this will likely go down (badly) I suspect there will be plenty of offers for all of us from the various club options out there.

Whether any of them make sense is another question...


----------



## SciFrog

There will be plenty of offers, but none will be dues only. The only way this would happen is if Capsource take a loss bigger than liquidating the club...

A trial membership is limited in time, why was it even mentioned above?

Deferred deposit is the only thing UE members will get. A dues only club could emerge as you can currently lease homes for cheap. But again this is a short term solution with lesser quality homes.


----------



## Desties

SciFrog said:


> There will be plenty of offers, but none will be dues only.



We'll see. I'm sure a handful of UE members will fall for a deferred deposit offer in a non-equity club, but outside of those 5-10 members, most will either walk away or consider a sweetened equity club offer.

Q will have plenty to prove if it wants a jaded UE member, perhaps even on a dues only basis. Everyone was mentioning Q and UE in the same breath as HCC and Lusso 1-2 years ago when the calamity hit. Q roughly doubled its dues, forced resigning members to keep paying, etc. and still offered the Lusso deal. If you're upset at the Lusso deal because it WEAKENED Q even more, then why should we even consider what Q has on the table?


----------



## willmyclubmakeit

*future*

none of us have a functioning crystal ball so lets just wait to see what transpires, but one must also consider their is a shared mutual interest here (remember mutually assured destruction?).   CapSource is the financier to the industry and thus should look at the industry's health in totality not just its exposure at UE as if the dominoes start leaning it has exposure I believe at Q and ER that is multiples of UE's debt.   As for the other clubs (equity and non-equity), one more domino falling could bring down others as even if the industry is not a house of cards it becomes more difficult to convince/reassure a prospective member after club after club has had challenges especially if members feel too much pain.   Its just human nature that people are usually more risk adverse than risk taking and the more doubt of a member getting what they paid for or their "deposit" back, the harder sell it will become and thus the other clubs and industry will continue to suffer.   This is not a UE situation in isolation.


----------



## wilkes591

SciFrog said:


> Deferred deposit is the only thing UE members will get. A dues only club could emerge as you can currently lease homes for cheap. But again this is a short term solution with lesser quality homes.



That's the same thing as "dues only". Today, you can join Q for two years dues only and at the end you are still not required to pay a deposit after that period. Regardless of what happens to UE.

Weather you call it trail or deferred deposit is meaningless. Deferred deposit is just nice sounding to members who put up a deposit. Neither way it is Dues Only and the conversion rate will be minimal at the end of two years. 

No way is Q getting deposits from the majority of new members, sure some fool comes along and puts one down. Just as I did many years ago. The majority of new members for all DCs are dues only. The new member has all the power right now, if the market does not improve, just walk away and renegotiate or if it does join at a discounted rate negotiate two years ago. 

Clubrdead and your point is right, it is unsustainable, just that in this the current environment every DC or Equity Club is unsustainable, which is correct. It is the same problem UE had, The members with actual deposits were subsidizing the travel of the other dues only member with their initial deposits. The dues only does not typical cover the operating expenses, however they are currently offering it. A "deferred deposit" member is simply getting subsidized travel on member's deposits or the investors dime.  

So you can argue about what clubs should do, however right now they are doing dues only, regardless of UE. There are even Equity Clubs doing "deferred deposits". Everything is negotiable before joining, just look at what Versa was doing.   

As for Capsource you would be shocked at the haircut they are going and will have to take. They are by far the biggest loser and they know it.


----------



## BestHC

*Big News*

I apologize for being a bit premature on the big news posting.  It seems that others that I am involved with continue to believe that our conflict of interest phase is still in effect. I don't agree. Out of respect to the group I will resist posting my story a little while longer. .


----------



## SciFrog

Why are you putting dues only and deferred deposit in the same basket? Short term they are the same, but in DC land, only 5 years + matter. And some clubs, like Q, are fine getting your deposit over five years as long as they get it eventually because the main investor advances the money and temporary leases are cheap. Dues only (as in no deposit ever) is not sustainable as UE has shown.


----------



## ClubsRDead

wilkes591 said:


> It is the same problem UE had, The members with actual deposits were subsidizing the travel of the other dues only member with their initial deposits. The dues only does not typical cover the operating expenses, however they are currently offering it. A "deferred deposit" member is simply getting subsidized travel on member's deposits or the investors dime.



Except for in the case of UR / UE, it is hard to believe there are actually people who paid full membership deposit.  At the end of the day, I think most of us are either TH or PE members who were absorbed during mergers and transactions.  Considering they never really added any new homes would also seem to support this.  I suspect there are very few of us traveling on the deposits of others, ie being subsidized by their initial cash because it doesn't seem like there were any.


----------



## TarheelTraveler

The DC industry has never been the model for financial stewardship.  What will happen with UE will likely differ from what should happen if you actually focused on the long term economics.

As examples, one would normally think that given the debt some clubs have that their dues would be significantly higher than the dues at clubs with little or no leverage, but that is definitely not the case.  You'd also think that if a defunct club member comes with no deposit, they would need to pay higher dues to offset the debt needed to buy houses with no deposit (although I acknowledge that for the time being, you could probably do leases and make it work).  Furthermore, you'd think how can you offer a return of the member's deposit when you never had one to begin with.  Seems to me that if you believe the promise of a future return of the deposit to be true, the monies would likely have to come from existing members or future members.  Existing members who actually forked over deposits will not want to cover those that didn't make deposits to their club.  And the club would be that much better off by actually getting to keep future deposits rather than having to redeem out folks who did not contribute a deposit to the club to begin with.

These types of crazy financial constructs (IMHO) are the norm in DC land.  Nonetheless, the hey day of easy credit and investor interest in DCs is over with, so I'm not sure the result will be what we've seen in the past.

Given the Q rumor cited above, their non-equity structure, their wealthy investor, and the past offerings to defunct clubs and then to members of defunct clubs, I would say they're the most likely one to make an aggressive play for things.  ER seems to be the most conservative among the non-equity clubs, has not shown a real interest in acquisitions (other than in their formative years), and doesn't need to grow in order to "scale," so I'd be surprised if they did anything of significance.  Equity Estates doesn't appear to have the backing (at least from what we know) to make a play for a club the size of UE.  Between the parent co. and private equity funds, A&K has the backing and would have the requisite interest in scaling quickly, but is way too conservative financially and vested in their financial and club model to do anything more than what they did with Lusso IMHO.  Maybe they could get comfortable financially in picking up some of the pieces from a BR, but that's about it, again IMHO. With Marriott behind it, RC and the Marriott timeshare units would seem to be a perfect match and would have the backing, but they don't seem to be going in that direction given what they've done with their DC.

This is really all just speculation, and I guess we'll see what happens in the coming weeks.  Good luck to UE members, and I hope this turns out well for them and the industry as a whole.


----------



## wilkes591

SciFrog said:


> Why are you putting dues only and deferred deposit in the same basket?



Because they are never going to get a deposit! The member is not contractually obligated to make a deposit unless 100% satisfied. It is dues only for a membership, what part of that do you not understand. You can you define "deferred", however you want. When the deposit does not materialize at the end of the day, it is dues only membership.

It is unsustainable for Q, ER, AK and the entire industry. It is what is currently offered, along with other perks such as free nights offers during the first year.

I am just stating what offers are out there! You are not denying this. You are hung up on the definition of "deferred". How can something be "deferred" if there is zero obligation? To me "Deferred Deposit" is dues only, since there is no obligation to make a deposit. To an existing member, it sounds like a deposit to be made at a later date, which is what DC's do mislead the existing membership base as not to upset them.

So once again, anyone can join for dues only today and start booking traveling. There is no obligation to make a deposit now or a "deffered deposit" in the future, hence dues only.


----------



## SciFrog

wilkes591 said:


> Because they are never going to get a deposit! The member is not contractually obligated to make a deposit unless 100% satisfied. It is dues only for a membership, what part of that do you not understand. You can you define "deferred", however you want. When the deposit does not materialize at the end of the day, it is dues only membership.
> 
> It is unsustainable for Q, ER, AK and the entire industry. It is what is currently offered, along with other perks such as free nights offers during the first year.
> 
> I am just stating what offers are out there! You are not denying this. You are hung up on the definition of "deferred". How can something be "deferred" if there is zero obligation? To me "Deferred Deposit" is dues only, since there is no obligation to make a deposit. To an existing member, it sounds like a deposit to be made at a later date, which is what DC's do mislead the existing membership base as not to upset them.
> 
> So once again, anyone can join for dues only today and start booking traveling. There is no obligation to make a deposit now or a "deffered deposit" in the future, hence dues only.



So you think you never have to pay a deposit? How do you know? Is that just your opinion or has someone actually done that? Because it looks like you are speculating.


----------



## ClubsRDead

I think what he is saying is simple - there is no obligation to pay the deposit, or deferred deposit - or whatever they want to call it, at a later time.  Just like all of us that paid dues only to join UR, some upgraded - but there was no further obligation to pay more.  Or take A&K who has been running "trial memberships" good for 2 years - pay dues only + 10 or 15% with no commitment to pay more later.  The point is, you don't have to pay later.  You might join under one of these various concepts and like it, and later decide to pay more, but you don't have too.  And if you don't like the structure, availability or assets - you probably wouldn't.  The bigger challenge I would think from a bidding club, if there are any, would be how you explain this influx of members to the existing membership.  Especially if they come with no cash and adversely affect your availability and bookings -- which any % of some 1000 UE members is going to affect the overall bookings.  If you're Q, you maybe want a few elite homes and those level of members, probably even A&K.  If you're ER, you might take anyone but none of our assets outside of what, 5 or 6 even fit their model of homes?  So their proposal probably does little towards making CS hole.  And, if you're ER and you ask CS to write the note down to take some properties, you subject CS to hearing you (as their lender) later asking to write down other properties in your prior and existing portfolio.  Not a pretty place to be if you're CS right now, and I doubt they care at all about us members.


----------



## Buon Viaggio

The recession has been long and hard enough to render moot any argument that promotes the idea of history repeating itself as in Lusso - Q and T&H.  I agree that the deferred deposit or dues only offers that are currently out there are ample incentive to any UE member who still has a passion for the DC life.  So how many are really planning to join another club after the agony they've been through and the state of the economy?  I think Q and ER really only need to tweak the current offers to scrape up what I see as a relatively few UE members left in play after it is all over.  They can probably do it without even adding inventory so CapSource will really have to be creative to put together a workable package.  Whatever happens will not have had precedent.


----------



## wilkes591

SciFrog said:


> So you think you never have to pay a deposit? How do you know? Is that just your opinion or has someone actually done that? Because it looks like you are speculating.



Nope, I will be forced into joining another DC or equity club, when the UE thing is done. I will not be giving a deposit, it will be dues only. I personally would not join another, however there would be a revolt in the household and it really is not that much when it is dues only. So I am contacting the various DCs and negotiating. I have found the longer you keep them on the line, the better the deal gets. I am a long time PE then UE member and I will never get a contract like the current one, which is my loss.


----------



## SciFrog

So you get dues only for two years. Then what?


----------



## Kagehitokiri2

SciFrog said:


> So you get dues only for two years. Then what?



exhaust all (DC) options that exist that do not require deposit.


----------



## ClubsRDead

Kagehitokiri2 said:


> exhaust all (DC) options that exist that do not require deposit.



Exactly....unless there is just some phenomenal deal on the table, just keep joining (taking advantage of) "dues only" type of deals -- if you really want to travel this way - until there aren't any more.  Who knows, maybe during the process you / we  find a club that you actually love and believe in the structure and finances and decide to up the ante.  Otherwise - there's just too many more economical options out there to explore....like VRBO, etc.


----------



## wilkes591

SciFrog said:


> So you get dues only for two years. Then what?



I do not think you understand. Everything is negotiable, including no deposit.


----------



## Buon Viaggio

May as well strike while the iron's hot!  Hopefully the buyers' market will run it's course.


----------



## ClubsRDead

Tried to PM you; says the inbox is full.  Clear some messages...


----------



## TarheelTraveler

DC News articles on UE and CRO:

This seems to be mostly from the 8-K, but still a nice summary.

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

http://destinationclubnews.com/News_CRO_Sheon_Karol_And_His_Plans_For_Ultimate_Escapes.php

"...Earlier this week, Karol prepared a marketing plan identifying properties of Ultimate Escapes to be marketed and sold, including an "expected sales price" and "minimum sales price" for each. Following the approval of this plan by CapitalSource, Ultimate Escapes will begin listing such properties commercially. 

Any offers that Karol deems to be "in the best interest" for the lender will be submitted to CapitalSource for approval. Offers above the minimum sales price however won't need approval from CapitalSource to be sold. 

Karol will also be responsible for "creating and implementing an operating strategy designed to optimize cash flow from operations, formulating and directing the process for any potential sale and/or merger of UEH (Ultimate Escapes Holdings) or the Company’s vacation clubs, proposing, implementing and leading the Borrowers’ restructuring initiatives, formulating and directing the Borrowers’ asset disposition process, including the proposed sale of certain of the Borrowers’ specified properties, and evaluating and recommending the retention of any professionals, including an investment banker and/or real estate broker, to assist in accomplishing any of such actions...."


----------



## Kagehitokiri2

BestHC said:


> *I can't wait to share my story...I should find out tomorrow whether my confidentiality agreement is no longer valid and I can open my mouth*





BestHC said:


> I apologize for being a bit premature on the big news posting.  It seems that others that I am involved with continue to believe that our conflict of interest phase is still in effect. I don't agree. Out of respect to the group I will resist posting my story a little while longer. .


those others believe your conflict of interest is in effect until when? 



wilkes591 said:


> We will find out on Friday, most likely Chapter 11 is file on 09/10/2010 or 09/13/2010.


why those dates? so tomorrow (friday) or next monday?

dont know where Q stands on RC turks and caicos, but >
http://online.wsj.com/article/SB10001424052748704392104575475832271292878.html?mod=googlenews_wsj


> Properties that Gencom still is trying to rescue include the Ritz-Carlton Kapalua and the Ritz-Carlton Molasses Reef project, stalled in construction in the Turks and Caicos islands in the Caribbean


----------



## Kagehitokiri2

http://www.sherpareport.com/destination-clubs/exclusive-resorts-new-members-0910.html


> We’ve heard from Exclusive Resorts that June and July this year were the best back to back months for new members joining the club, in over two years.
> 
> The club has added over *100* new members so far this year, and has also seen about 70 current members upgrade their membership plan to enable them to travel even more with the club. The number of upgrades to date are more than the club saw in the whole of 2009.






Kagehitokiri2 said:


> http://www.exclusiveresorts.com/#2009_YIR
> http://www.exclusiveresorts.com/images/BR-YIR2009-PROSP.pdf





Kagehitokiri2 said:


> *150* new members joined [Exclusive Resorts] in 2009 and December was our best new member acquisition month of the year.
Click to expand...




> Prospects took approximately 450 [sponsored guest] trips during the year, which resulted in about one-third of our new membership sales in 2009.


33% x 150 = 50
50 / 450 = 11% 

from BR-YIR2008-01.pdf >


> The Club sold *380* new memberships in 2008 and exceeded $125 million in new and upgraded member sales.
> 
> Over 200 members purchased additional days in 2008 alone.
> Exclusive Resorts had a record year for membership upgrades, with over 200 members purchasing more days of usage.
> [unclear whether upgrade or just additional days]
> 
> In 2008, almost 40% [152] of our new membership sales involved a referral from an existing member.


----------



## Desties

Kagehitokiri2 said:


> why those dates? so tomorrow (friday) or next monday?



The SEC filing had listed the 10th as CapSource's extension. Since UE probably has until the end of the day, I'm guessing that why Wilkes went with tomorrow -- or Monday.

One uninspiring sign (for those like me who was hoping something would happen to avoid Chapter 11): I just pulled up a quote on ULEI. It had been locked with a Bid at $1.40 and Ask of $1.45 nearly everytime I pulled up a live quote (once every few days -- I'm not that anal). But I pulled it up just now and it's Bid $0.56 and Ask $1.30.

If ULEI files for Chapter 11 over the weekend, the stock would probably be worthless (since I'm fairly sure that member redemptions -- though behind CapSource -- have priority over common shareholders). The sharp drop (and wide spread) aren't very comforting.


----------



## Kagehitokiri2

Desties said:


> The SEC filing had listed the 10th as CapSource's extension. Since UE probably has until the end of the day, I'm guessing that why Wilkes went with tomorrow -- or Monday.
> 
> It had been locked with a Bid at $1.40...now and it's Bid...


ah. 

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



> Tomorrow is the forbearance termination date as outlined in Ultimate Escapes Form 8-K, the date that lender CapitalSource specified in their forbearance agreement with the club.





> Both Keith and Callaghan have one year agreements with the club concluding on October 29, 2010. Both are subject to an automatic renewal of an additional 12 months upon the expiration date, unless terminated by either party 90 days before the end of the current term. The two highly experienced executives account for a combined salary of $750,000 and are both eligible for a "performance-based bonus as additional cash compensation."
> 
> The 90 day window prior to the automatic renewal date has already passed, meaning that if the pair haven't already been notified of an upcoming termination, they will be entitled to a severance package of six months compensation and the prorated amount of bonuses earned during the current fiscal year if they are relieved.


----------



## willmyclubmakeit

*the question could be answered soon*

I guess I may have to change my screen name---what defines making it?  Making it to chapter 11?  Cotinuing to travel?  Being absorbed into another club? Any help pondering this question will be appreciated and even better if someone finds a solution for the members but as the clock ticks I get more and more concerned that our fate will be sealed by others.


----------



## ClubsRDead

Did anyone see the UE email and presentation tonight?  What a friggin joke.  This guy wants to charge everyone a bundle and convert it to stock calling it a member owned plan, but not eliminating all the debt.  Nice try JT, see if you can get your own share price up, retain your job and leave everyone still with debt on the club.  And he expects people to approve this?  File a damned bankruptcy and sell it in pieces.  This is purely a ploy for him to get cash for himself and his mgmt team.  And to wipe out his debts to us by eliminating our redemptions.


----------



## AK.TH.UR.UEmember

*Amazing..!!!!!!*

Can you believe the amazing gall of this approach..?????


----------



## Kagehitokiri2

how much did they raise in march?

wonder what theyll raise this time. whats the deadline? will it be extended?

(no one is surprised, are they?)


----------



## AKTHUE

*Makes no economic sense*

JT calls this a conversion to a member-owned club, but it's really a muddled mess where the key is that he's selling $15 million of new equity to members at $3.97/share, when the shares are worthless! 

The current reality is that the value of the club is less than the amount owed to CapitalSource. Existing equity is worthless (as is management...) 

A more realist proposal is that if members come up with $15 million, then CapitalSource agrees to cut their debt to $60 million, the members own everything, and JT is thrown out on his a$$.

I have no doubt that members will not get a clear description of the existing capital structure or obligations, but if they agree to this conversion, I'm sure that JT will have a favorable employment contract, and probably retains various warrants or options or convertible shares that suddenly he owns a majority of the club again. 

JT is appealing to the members with the pitch "unless you agree to this you will lose your valuable membership and travel opportunities". Will he succeed at tricking the members again?


----------



## Jack1234

Wish I could say I was surprised by this but it seems like more smoke and mirrors.  No way could I support this based on a quick first read.  Let's go for one of the other options and have a real change.


----------



## AK.TH.UR.UEmember

*Independent Board Committee*

Anyone have any idea who these three might be..??


----------



## msscarlet

It was hard not to laugh during JT's presentation especially the slide which described "The Best of Times."  It was hard not to scream when he talked about management's sacrifices....

Even if one thought there was value in the company (AND I DECIDEDLY DO NOT) there is no way that any outside investor in the proposed time frame (or possibly at all) could understand the self-dealing and smoke and mirrors that this management team has created.  I have a bridge to sell to anyone who is prepared to give one cent to them.

At least with a bankruptcy filing we can claim a loss for our deposits and get some tax shelter.

I tried to respond immediately to the poll but was unable to find it on the website.  Has anyone else had that problem?


----------



## msscarlet

I thought he said four outside 'independent' board members (the majority out of 7)?  As a public company they have already had the requirement for a majority of the board to be independent and we have seen what that got us.


----------



## msscarlet

AKTHUE said:


> JT calls this a conversion to a member-owned club, but it's really a muddled mess *where the key is that he's selling $15 million of new equity to members at $3.97/share, when the shares are worthless!*
> 
> 
> AMEN.


----------



## AK.TH.UR.UEmember

*comment re Board and other notes*



msscarlet said:


> I thought he said four outside 'independent' board members (the majority out of 7)?  As a public company they have already had the requirement for a majority of the board to be independent and we have seen what that got us.



I am asking about the existing board members he claims are involved in the decision process now.

The four independent members you mention relate to the plan of a *new* Board after the members buy a lot of worthless stock at $3.97 per share and JT continues to own his boatload of shares.

The whole thing is nuts - UE shares don't trade,  but if they did it would be for pennies.  So JT says "buy shares at $3.97 so I can stay in actual control (after all, he alone would have 3 seats - the other four scattered among a large base of shareholders) or else."

And, the $15 million will only pay off the current A/P, overdue interest and make *absolutely no reduction *in the CS debt....thus the debt remains and the club fails again...AMAZING...!!!

With 33 million shares out after members make another $15 million gift, the valuation of the club is over $120 million even though the $100+ million in CS debt would still be outstanding.  All this on maybe $80 million in current value of real estate....and a money losing business model and the same old management.

I vote no.


----------



## SciFrog

UE real estate is only worth $80m? That seems awfully low.


----------



## ClubsRDead

This is all about JT and company cutting a deal for themselves, getting people to raise the share price through conversion - which doing quick math would put about $20MM in his pocket.  Screw this.  There's other people "bidding" and working on conversions and I think we just need to see what pans out.  Just like at TH no one bought into the mgmt run plan (though as I recall it wasn't too horrible compared to where we are now) no one is going to buy into anything that Jim and his overpaid crew are doing.  The Board is listed on the web site under investor info / governance, and presumably the "restructuring committee" is comprised of the 3 other than Rich Keith, who probably can't be on it.  Those three I think all came from the SPAC public offering jerkoff process and are there for their paychecks and free membership.  Holding my breath that the rumors of a real deal is pending are actually accurate.  I hope so because I'm not sending this guy any more money and frankly doubtful he's going to honor any of our trips.  Who does he think he is to issue the releases and calls he's had when it turns out he wasn't even paying debt service?  We paid him $16MM last year in bs assessment and he didnt even reduce the debt with it, just went public, filed for huge pay increases.  Turns out he's sold a bunch of our houses to pay operating costs and now has all these leases that are likely cancelled.  Same day, different story.  There is no "member owned" when Jim still owns the majority.  Vote no to Jim and lets hope the CRO is running a process to evaluate proposals.  If the CRO approved this they should be gone too.  And no way Capital Source is going to buy into this garbage which Jim will be using to get an "extension."  We send in what, $30M a year and he doesn't even use 1/3 to reduce debt, not just pay interest?  If the stock was worth a shit we'd have bought it all and done a Gordon Gecko on his dumb a** by now.  Thank you Jim and "restructuring committee," you have convinced us, for good, that you are a poor manager, worse leader and financially incompetent, and for that -- you expect us to bail you out.  Again?


----------



## 3DH

msscarlet said:


> At least with a bankruptcy filing we can claim a loss for our deposits and get some tax shelter.



...not necessarily. While I am NOT a tax professional, we were told with the LUSSO bankruptcy that we couldn't justifiably take the write-off unless it was ruled -- in court -- a "theft loss". :annoyed:


----------



## ClubsRDead

*Recap...*

Let's recap the call:  He blames his "crisis" on global economics, not his own poor management.  He says the club is just now ready to break even with all of the recent cuts, yet his last quarterly loss was over $6MM.  He implies there is a market for sales (for him) yet says other clubs like ER and Q are having trouble.  He makes it sound like Capital Source is the unreasonable party, yet he didn't pay them with OUR money?  He says he can't sell memberships for 60 days - he hasnt sold them for 2 years?  And says he cant sell equity, but then proposes we give him some?  And threatens us with loss of reservation or (I guess) planning services.  He JUST closed the Colorado office, why was it ever opened?  He gives 5 plans, all of which suck (member owns, yet he still owns, permanent dues increase, merger or sale, or BK (noting that filing is likely eminent anyway).  All options suck, but BK is probably the best. **(Note - how did he buy our club from TH and owe never reduce the loan balance after all of this time after all of the money we gave him?)**  He says "some believe" these are the dollars we need to charge you to keep it running - not solve it, or fix it.  Who is "some people?"  $30k, $40k and $50k conversion fees per club member are you out of your friggin mind?  I hope you have some money to buy this website too because you are smoking the pipe Jim.  Or, tell us he will double our dues for every year.  Wow.  His big push for "member owned" means "Jim owns."  He believes in it so much why didn't he do it initially and before he got stock?  he says he will show the "plan" next week based on our vote of support for it.  he wants our dollars to wipe out a 2nd mortgage which he owes to JDI and which would convert it to stock, putting serious cash in HIS pocket at almost $4/share.  He says they are a company with $80MM of liabilities, yet they owe much more.  He claims they've cut their pay (since when) and would work for 1/2 going forward, he makes $500k now.  He wants to "negotiate" a new salary agreement.  How about unemployment?  He should have been making cuts months, years ago - not since last month.  This is a threat, nothing less.  Basically, if you dont support this, your trips get cancelled.  If people agree to this then pigs truly do fly.


----------



## Desties

I don't buy the $80 million property figure. The number of owned properties was 94 at the end of June. As bad as the real estate market has been, there's no way that the average property has a market value of $850k. Is the figure higher or lower than the $145 million figure in the books (based on cost minus depreciation & amortization)? I would think lower, since vacation real estate devaluation has decreased at a faster pace than D&A, but I'd be shocked if the 94 owned properties are worth less than $120 million or so. 

Whatever happened to identifying the properties up for sale and sending out to memebers who may be interested in buying them?

And tripling-quadrupling the number of shares in a recapitalization will NOT raise the stock price. Just look up YRC Worldwide, Sirius XM Radio or any other company that diluted the share count in a push to stay solvent -- the price drops. The $3.97 figure is just a way to save face with the RAP conversion folks last year and eliminate the RAP liability at a deep discount. The end result is that the balance sheet will look a lot sweeter (including the $10 million in debt that will be converted at that rate), but it's not a ticket to a higher share price until the fundamentals seriously improve.


----------



## TarheelTraveler

3DH said:


> ...not necessarily. While I am NOT a tax professional, we were told with the LUSSO bankruptcy that we couldn't justifiably take the write-off unless it was ruled -- in court -- a "theft loss". :annoyed:



Definitely consult your tax professional, but a theft loss generally gets you a much better write off (IIRC it is deductible from current income at ordinary income tax rates).  Again IIRC, it has to be above 10% of AGI and the transaction had to have been entered into for profit (in the DC context, it seems you would have at least had to have had the possibility of a higher redemption on the back end, which some memberships provide).  Problem with a theft loss as 3DH points out is there actually had to be illegality involved and a criminal intent.  Not sure that a court ruling or criminal conviction is actually required, but it would certainly be a good fact from a tax perspective.

Other things to look at depending on the structure, membership plan and what happens would be is if it is a nonbusiness bad debt deduction or capital loss.  It all depends on the facts though.  Definitely talk to your tax advisor.

As a general matter, I don't know how management has any credibility at this point with members.  I don't think you can say everything is going great, and then out of the blue say we may have to file for bankruptcy unless you give us a big chunk of money.  Particularly more than once. Just for comparision sake, it seemed that Q handled this in a much more proactive and communicative way IMHO.  I know that members could take the initiative and delve into the SEC filings, but I don't think most members do that.  The folks on this board are the exception, not the norm.

Significant additional cuts in salaries, staffing, and offices are being made currently before a threatened bankruptcy.  I bet most members don't get why this wasn't done previously.

As a member, I would want certainty and stability in my membership reservations, not to have to pony up additional funds in order to avoid losing my vacations every year or two.  To me, given all of the other offers out there, the only way that I would put in money would be is if it paid down debt and actually bought me equity in the real estate in a separate member's entity that management had no part or ownership interest in.  Again, that's just me.  The amount of debt has to be addressed one way or another at some point.  Either the debt is lowered and/or the dues are raised in order to fix it it would seem.  It has always seemed crazy to me that clubs with the highest debt levels have the same or lower dues structures.

Good luck to the UE members.  Hopefully, the CRO will come up with some good options that will provide more long term stability.


----------



## PuntaEscape

*Questions*

The UE plan asks us to raise the important questions and I think we should do so.
The $10 M first mortgage holder is listed as a name of an organization, who are the underlying shareholders of this, who will benefit from the payout of this first mortgage?  Is it Jim and Rich?  Not clear also how many shares there will be in the hands of Jim and other principles when all is done.  We should know that. 
It is also not clear to me, what a non-binding poll will do with regard to Capital Source.  This is really only a delaying tactic.  A real danger here is that people cancel forward reservations and stop using the club which effectively drives them under.  Also if sales are coming from referrals, how could any of us recommend friends join this club now.  Fundamentally I don't know that I trust Jim at all or Rich a little.  Ed Powers was let go in the Fort Collinas move, I felt he was one with integrity.  Customer service has been greatly effected by the FC layoff, the club will never be the same


----------



## AK.TH.UR.UEmember

Desties said:


> I don't buy the $80 million property figure. The number of owned properties was 94 at the end of June. As bad as the real estate market has been, there's no way that the average property has a market value of $850k. Is the figure higher or lower than the $145 million figure in the books (based on cost minus depreciation & amortization)? I would think lower, since vacation real estate devaluation has decreased at a faster pace than D&A, but I'd be shocked if the 94 owned properties are worth less than $120 million or so.



Maybe the $80 million is low - I was just trying to guess what the homes subject to the CS loan would go for in a BK environment and a forced, quick liquidation sale.

As I understand it, the CS loan does not cover all the homes since the ones from PE and the other smaller deals came in with their own debt attached, so if there really are 94 owned homes (some may have been sold recently), many (20...??15...?? - who knows) have their own debt separate from the CS loan.  The $80 million figure was a guess at the liquidation value of the ones related to CS with the assumption that the other lenders would simply take the homes they have loans against.

Anyway - let's all hope someone comes along with a far far better deal for the members than JT's ridiculous idea of "give me yet more money and I'll keep doing the same thing until the next crisis..."

Didn't someone once say that the definition of insanity is doing the same thing over and over and expecting a different result...??????  Are the members insane..??  I hope not...


----------



## willmyclubmakeit

*solution*

I think you are right re: the debt that only some of it is CSE which will be a complicating factor.

I also agree that last night probably sealed the deal for many members and they would only follow a new management team---especially with their $ if not their confidence.

I believe BK is a necessary evil to clear out the current equity/warrant holders, litigation, leases, and the extent/terms of the CSE debt even.   

However I hope people can see value in the muck of a decent place to invest in this real estate and tag along a large membership with $20+ million of dues which could help service a reasonable amount of debt at today's rates with a reasonable overhead structure for the size/condition of the entity.   

When is the time to invest?  Buy low and sell high right?   if this is not the bottom it surely looks a heck of a lot more like the right time than when most of the clubs were formed and invested--hence there has to be a good risk/return possibility for the right investors if they regain the confidence of the membership via fair and accurate representations and treatment.   

How do you think members would react if membership levels/dues were simplified/standardized to eliminate over some transition period a lot of the special deals and eliminate all the free deals?  Wouldn't you think that could raise some more dues if there is not too much churn?  your thoughts?


----------



## Jack1234

Clearly it's time for any interested club(s) to come up with an alternative if they want more members.  If "Jim's plan" works for a club as deep in the hole as UE it sure works really well for any financially sound (or as sound as a DC can be right now) club.  Sounds to me like people are not against paying higher dues but those funds need to go towards a working, financially reasonable business plan.  I believe those exist and sure would prefer to put my $$$ towards one of those over this joke of a plan.  I will also second whomever stated the obvious of why would Cap care how we vote on a non-binding question.  They just want whatever gets them the highest return (as they should) and don't care if we can take out planned vacation next week.  UE (Jim) is in a VERY big rush right now but that doesn't mean we need to rush into anything.    just my 2 cents...


----------



## Desties

The good news: JT's plan is based only on 750 of the 1200-ish members coming aboard, far less than those who paid last year's assessment. 

The bad news:  The same "preserve your lifetime membership" nudge that may have worked a year ago in getting assessments paid isn't going to fly too well with folks the second time around. 

Confidence was rattled a year ago, but now it just may be shattered. 

All of the latest moves (closing Fort Collins, freezing/slashing exec wages) should have been done long before the first CapSource missing payment on June 5. And, yes, the execs did take cuts during last year's assessment, but clearly there's a cost-control problem when you sell 10 properties and unload 11 leases (during the first six months of the year), raise a little money thought last year's IPO, and you're still millions in the hole.

I still believe in the worth of my fellow members. And I think the concept can survive, ideally with new ownership and a new brand to re-instill confidence. I'm glad to see many options still on the table, and hopefully something plays out if -- as I expect -- the poll results show the need to come up with a new plan. 

Think outside the box, JT. Heck. Sell the Elite club to Q or ER, and use that money to keep the other two clubs goig. Or sell Signature and Premiere, if Q or ER want an entry level vehicle. 

Either way, if it seems that all of these seasonal and annual leases that were coming online in October to make up for the 21 properties that went away during the first half of the year aren't going to happen, shouldn't the club be informing members about that now in September? Obviously the UE brand is toast if bankruptcy is involved (I mean, who would join -- there's a reason why T&H, Lusso, HCC, etc. don't exist as brands anymore), but if that's the means to necessary change, bring it. Collectively as members, we're more valuable than we probably think.


----------



## DestiFan

After lurking for months, I had to come back to make a few comments.  I hope that all of you affected by this (which I am as well) do a lot of research before committing funds again.  

Here is the reality as I see it:

1) Capital Source is in charge - and that will not change.  They are going to do what is best for their principal balance - not their interest payments.

2) Management - which had no credibility in many of our minds already - has probably lost it with the general membership base.

3) A white knight (I understand Quintess was actively looking for months) will not appear prior to a Chapter 11 - many will come about post-filing.  The debt is to burdensome, the struicture too flawed.  In addition, the remaining players are too rationale.  

4) The non-equity method business model is probably on life support

5) Offers will be available to members of UE, but will not be sweetheart deals.  These will be at $$$ levels much more expensvie than current rate.

Lastly, I am still with Equity Estates and am extremely happy I made the move.  They are executing well - have record cash signings YTD - and have recently agreed to three new home purchases in great areas.  

Hope all of you are well.


----------



## TarheelTraveler

Nice summary of the call last night from DCNews:

http://www.destinationclubnews.com/News_Ultimate_Escapes_Seeks_To_Become_Member_Owned.php

"A group of several individuals, both inside and outside of the club, are actively working with CapitalSource to determine the amount of capital needed moving forward, with estimates ranging from between $15 million on the low end up to $30 million on the high side. With this in mind, Ultimate Escapes is considering five different options: 

•Conversion to a member-owned club
•Permanent annual dues increase
•Merger with another club or hospitality firm
•Sale of the club
•File for bankruptcy
Tomorrow, we will outline each of these five in greater detail, but Tousignant stressed throughout the meeting their favoritism of the member-owned plan. 

"We believe the conversion to a member-owned club makes a lot of sense. That by converting the club to a member-owned club, particularly outside of a bankruptcy proceeding, we believe makes the most sense as it aligns the shareholder interests, including members now, and it provides all members with a majority ownership of the club, and could provide future upside potential once the economy begins to recover.""


----------



## ClubsRDead

Check the stock today....wow.  Good job, JT.  You blew it even more.


----------



## Jack1234

I'm actually shocked it is trading at more than a penny.


----------



## Desties

The member letter is now public information. 

It was filed this afternoon in an SEC filing:

http://ir.ultimateescapes.com/secfiling.cfm?filingID=1144204-10-48883

The actual presentation may be just for members, but you've got to love an SEC filing of a missive called "confidential" a day earlier.


----------



## travels1

*members who are planning travel to leased homes won't travel*

I've heard that any members that have travels booked next week into leased homes are going to be told that their reservations are cancelled and they can't travel.  Some homeowners are locking out UE from some leased homes and UE is cancelling all leases for those homeowners that are still allowing UE members into their homes.  I've heard that calls will start on Monday from their escape planners to any members with reservations in leased homes planning travel in the next few days.

This boat is going down in flames so before you get on the plane you might want to check on the status of your reservations because you may not have a nice comfy home awaiting your arrival!!!!


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## ClubsRDead

Cancellations are no surprise here, especially with leased homes (which we probably never should have had).  The same thing happened to us before.  The difference then was that Rob McGrath didn't get on the phone or Internet the  night before a weekend with some whacko presentation.  We did get the wondrous phone calls for members from the crazy lady, and we had plenty of people manning the phones when we called about our reservations.  But for the most part they honored them as I recall, I even had to pay a little more at one point to keep a lease but it was cheaper outlay then the airfare I would had to to forfeit. I tried calling my "escape planner" 3 times and can only assume she was let go.  When I logged into the member site to check my reservations are still in tact but I know one of the homes is a lease so I guess that will disappear soon enough.  Of course I had to "vote" first to continue on about a plan to give Jim more money to pad his personal piggy bank with.  My answer, of course, was no.  I'll just spend my "extra" $50k finding alternate accommodations.  And then we can all file our claims again in bankruptcy.  That worked so well last time....


----------



## TarheelTraveler

Desties said:


> The member letter is now public information.
> 
> It was filed this afternoon in an SEC filing:
> 
> http://ir.ultimateescapes.com/secfiling.cfm?filingID=1144204-10-48883
> 
> The actual presentation may be just for members, but you've got to love an SEC filing of a missive called "confidential" a day earlier.



The actual presentation is also available.

http://www.ultimateescapes.com/recording_4824742/play.html

The urgency could not be emphasized enough in the presentation and the time frames are incredibly tight, but what I don't get is that the writing has been on the wall for quite some time based on the financial filings (payroll issues, not making loan payments for several months, need to raise cash, etc.).  Certainly those in the company would seem to be that much better informed.

Seems just plain wrong to the members to get all of these leases, have members book travel for the leased properties and be that tight on cash that you can't honor the leases and being on the verge of filing for bankruptcy.    

In potential defense of management, did a potential suitor leave UE in a lurch (8-K mentions 6 mos. of negotiations and due diligence with one suitor)? If so, didn't the same thing happen to Lusso before they filed for bankruptcy?

Again hoping for the best for the members and that a more stable, long-term solution is obtained.


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## Kagehitokiri2

remember the cycle of promise then threaten in order to raise funds. been working pretty well. although $5mm in march isnt necessarily that great, if they did indeed raise that much. but then that was not after a threat, right? will certainly be interesting to see what they raise now. i guess the only reason people would be paying UE and not capsource is theyre not in communication with other members or advisors?

...

while UE/lusso/etc clearly are incapable of making reasonable decisions (other than in strategies to shift income to mgmt, and liability away from mgmt) could Q also WANT to encourage that, so they dont recover, go bankrupt, and then Q picks up members etc...

and the thing is, doesnt really matter for members, if they get to move to Q with no deposit.

if that happens, CLEARLY Q is either >
- not breakeven with investor ("covering debt" IIRC)
- concerned about investor leaving
- knows investor is leaving before originally scheduled
- concerned they wont be able to replace that income later (which is pretty far out? but would seem to be a good way to plan..)
~ anything im missing? i dont think pure greed works..


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## ClubsRDead

Kagehitokiri2 said:


> ...
> 
> while UE/lusso/etc clearly are incapable of making reasonable decisions (other than in strategies to shift income to mgmt, and liability away from mgmt)  i dont think pure greed works..



You are 100% correct here.  Irrational decisions.  The plan proposed wiped out secondary debt of JTs to the original equity guys by taking the dollars he was asking for as a "member equity" club to reduce that debt and convert to shares for himself.  Saying you will cut your $500k salary in half is no saving grace when you have some 250+(if not more) people likely to lose their holiday reservations as of right now.  I for one ask, what does he get paid for doing?  If he and other mgmt incurred lots of debt, personal or otherwise in the various schemes and transactions they've been doing, that shouldn't be our problem - but once again is.  We've given money repeatedly to this process - at the signup some $20MM, assessment, dues, early dues programs, early equity asks, some bought stock, you name it.  And he appeared to pay little, if any of the debt down to maintain our travel.  If he'd used just 1/3 of our money to satisfy creditors we wouldn't be here today.  At Tanner there were some odd member deals as I recall, and Jim could have used that BK to get rid of them all.  Instead, "early ups," tons of extra days, free memberships (Elite, no less) for his board and certain members from other clubs - like Everlands.  Why did they get free Elite's and no dues?  TH failed on us - but, we travelled like kings, never got our trips cancelled and had plenty of availability.  No one called and said "give us money now or we fail tomorrow."  No one assessed, raised dues.  In fact, they're biggest problem was NOT saying "no" to member demands.  In the end it was a much better travel experience.  This one has been some bs maneuver to get big and fat at our expense, promise things undeliverable and then I guess, his plan was try to sell the club for xxearnings and make himself rich, because I am curious what the plan was to pay the note off next year that he had failed to reduce the principal on almost the entire time.

Monday should be a really interesting day.


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## AKTHUE

*Member Dialog*

It is really unfortunate that there is no effective way for the UE members to communicate with each other and share perspectives and viewpoints. 

JT even structured the webcast to prevent questions. There are only about 10 UE members who have found TUG, so it is not critical mass. 

If members had a forum, they could at least debate alternatives.

If new cash from members were to sustain or create a new UE, it should be on terms very different from what JT presented. It should include:
 - elimination of all existing equity as well as the URH loan (which I think is controlled by either JT or RK0
 - a substantial write-down of the CapitalSource loan
 - a completely new management team
 - complete member control, not 4/7 board members 

It's possible that with some capital infusion from members UE could be relaunched, or the remnants could be attractive enough for another organization like Hilton or Starwood or Marriott or AK to purchase or operate the club as a member-owned club

But JT's approach to members is to prevent members from considering such alternatives, and to make us sit on the dark and tell us our Christmas and New Year's plans won't happen unless we give him more money. UE has never been forthright and has never treated the members with respect. They always have something to hide or some game they play. The fat lady was singing on JT's webcast.


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## Kagehitokiri2

what happened to UE email lists?? there are more than 10 UE that have posted here, and im sure more are lurking. 

edited my last post to make clearer.


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## Jack1234

There was a good sized email list out there from the time of the assessment.  Seems to be a good time to bring it out and get a group to band together to try to negotiate with anyone who has a decent proposal for us.  Numbers still talk in DC land.  I too am hearing that if/when the BK filing occurs all trips are likely to cease whether leased or owned homes.


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## Desties

If UE files next week, I predict that Q and all of the remaining smaller non-equity clubs go under -- or convert to equity models, if they can -- by early next year. 

Right now, Q is kept afloat by its mysterious investor and Steve Case is ER's sugar daddy. However, what investor would keep throwing money into an industry if its only public company failed in public? What member would fork over a chunky deposit, when a Google search brings up pothole after pothole? T&H was the industry leader, but it was too long ago and other clubs had already distanced themselves from that "please the member at all costs" model. UE has more members than every other failed club after T&H, combined -- twice. Its collapse may spell the end for all but ER, who can at least point to scale to explain to potential members why it can survive. 

If Q is the potential suitor that's been talking to UE for six months, I'm guessing that part of it was to grow its base quickly, but also to swallow the grenade before it explodes in the open. Picking up UE refugees post a filing may seem like a financially savvy strategy, but it will be ALL that the club nets in new members, as industry confidence teeters.

I spent the past few days exploring the ER and Q plans, just to know where the exits are located, and have concluded that neither will work for me, even on a dues only basis. It's too much per night -- compared to what I'm paying for UE now, and compared to the private rental homes available. I've never been a fan of ER's clustering strategy, and Q just doesn't have enough properties to make it worth it for me. To be fair, I probably wouldn't have signed up for UE's current offerings either. If the PE Legacy plan wasn't offered, I would have probably joined the dozens of PE members that bowed out at that point. If any club wants a play for the Sigs and Premieres, they're going to have to consider going downmarket for an entry-level product. 

I'm not burning through another deposit, so I'm not even eyeing the equity clubs. And that also includes any potential for UE to go equity, because I'm already far enough in the hole with the initial deposit.

Good luck to everyone in the coming days. They will be industry-defining.


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## PuntaEscape

The real question.  Most people that still are members are under a can not quit clause until 18 months after sept of 09.  We are also under a new cancellation policy with hefty fines for cancelling reservations.  So what do we do when dues come due in the next few months assuming there are a next few months, are we legally obligated to pay?  Do we pay only till the 18 month obligation is done.  What about existing reservations.  If you have for Christmas and they cancel then no problem, but what do you do.  If you cancel they may come after you with the charge for the cancellation fees.  The next few days and weeks will be key.  Does the CRO try to continue to generate cash in by honoring resevations for properties still owned and if so continue to run the club during a liquidation period?


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## Buon Viaggio

desties - I'll bet a lot of UE members are going through the same thought process when looking at other clubs.  In fact, any early adopter in the DC world would be hard-pressed to join a club now after the great deals early on.  Unfortunately for your pocketbook all the clubs are now more realistically priced for survival.  All I can say in defense of ER is that when they went through the restructure of the contracts they made a major paradigm shift to improve communication with members and to allow feedback and member participation in the solution.  They really averted a complete melt-down  and they emerged with a much stronger and enthusiastic membership.  Sure there is still a waitlist to leave but member satisfaction is as high as ever and the great service is still constantly improving.  The homes are still fabulous and not all locations are clusters of homes by the way.  Per night compared to rentals is not as good a comparison as it used to be but if/when the market improves that will change and the DC's will be a better value.  Not many rentals have the same level of service as a DC either. DC's will survive especially if you consider how reluctantly UE's abused members are willing to give up the lifestyle.


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## Kagehitokiri2

Desties said:


> If UE files next week, I predict that Q and all of the remaining smaller non-equity clubs go under -- or convert to equity models, if they can -- by early next year.
> 
> Right now, Q is kept afloat by its mysterious investor and Steve Case is ER's sugar daddy.



not sure if i quoted or not, but didnt ER say after that $20mm and dues increase that they are breakeven? dont remember. and of course could be false. 

anyway, nonequity is down to ER/Q and UE/oyster.

maybe Q is more concerned with acquiring UE members first. and then after that theyll go for oyster members. trying to take on ER and whatnot. maybe its actually that their investor is interested in this, and additional real estate etc investment, during this down period...

we will learn a lot from what happens.


----------



## Buon Viaggio

I haven't heard of any plan for Case to add more funds after the 20 mil.  They seem to be on plan - breakeven.  With decreased costs, new members and a large number of upgrades they do seem to be on track.


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## Kagehitokiri2

so they did say theyre breakeven now, right?


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## TarheelTraveler

*ER*

I've been told by a very reliable source that once the full around $1,000/night dues are phased in at ER over three years for all members, they anticipate being break even.  The $20M from Steve Case was supposed to help fill in the gap in the interim.

Frankly I don't get why anyone in their right mind or who does any due diligence would join a non-equity club at this point.  Maybe you do it as an early adopter before you've got better choices.  And I used to say you might do it if you've got to be in a particular location, and then you really look hard at the financials.  However, looking back at the wreckage, I can't ever imagine putting in several hundred thousand dollars to be an unsecured creditor owning zippo, just some promise of perpetual vacations from a no-name company.  The structure is just crazy IMO.

I've always thought the industry needed regulation and still do.  People joining non-equity DCs always thought their deposits were primarily being used to buy real estate, when the reality was quite different.  You notice most or all of the non-equity players have never committed to using 80% of deposits to buy real estate (although ER was always one of the better ones and it's one of the main reasons that they're still standing).  Most DCs were started by or had real estate developer investors.  In my experience, developers are fantastic at making lots of money or, alternatively, flaming out spectactularly.  That personal characteristic of tolerating a high degree of risk is not however what most members probably envisioned when they want to go on worry-free vacations.


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## Buon Viaggio

I think the equity vs non-equity debate is really moot in terms of investment.  I just look at my DC membership as the cost of accommodations and travel service.  Don't need to own that especially with the bleak outlook on resort real estate.  A membership in an equity club is really a small investment ($500K or $600K) anyway so we're not really talking about a lot of upside potential are we?  Not sure if the equity model is any safer - I've had several real estate investment vehicles unravel in the past 3 years.  Agree that there needs to be some sort of regulation and basic standards.

ER is not exactly a no-name company either.


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## Kagehitokiri2

TarheelTraveler said:


> I've been told by a very reliable source that once the full around $1,000/night dues are phased in at ER over three years for all members, they anticipate being break even.  The $20M from Steve Case was supposed to help fill in the gap in the interim.



forgot about phased. makes sense.

the thing re equity is the details still vary a lot. >

- AK
- m private residences
- hideaways club
- EE
- luxus vacation properties
- rocksure (third fund - euro capitals - is larger than first two)


*Buon Viaggio*, where do you stand on if the deposit was simply non refundable? (one of the things ive tossed out there.)


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## AKTHUE

Buon Viaggio said:


> A membership in an equity club is really a small investment ($500K or $600K) anyway so we're not really talking about a lot of upside potential are we?



You must play in a different league than I do. I would rather own a home having used $500K as the downpayment, than consider $500K a fee to then pay $20K/year in annual dues to vacation for 21 days a year and then have it close down 2 years later while the CEO plays financial games and draws a $500K salary.

How can you call it an investment if it is backed by nothing


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## Buon Viaggio

If the deposit were non-refundable then I would expect dues to be lower and the deposit would be lower but it would be a tough sell in this climate.


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## TarheelTraveler

Buon Viaggio said:


> I think the equity vs non-equity debate is really moot in terms of investment.  I just look at my DC membership as the cost of accommodations and travel service.  Don't need to own that especially with the bleak outlook on resort real estate.  A membership in an equity club is really a small investment ($500K or $600K) anyway so we're not really talking about a lot of upside potential are we?  Not sure if the equity model is any safer - I've had several real estate investment vehicles unravel in the past 3 years.  Agree that there needs to be some sort of regulation and basic standards.
> 
> ER is not exactly a no-name company either.



I'm certainly not counting on making money off my DC membership (that's the concept behind the CR/EE style of DC), but over the long haul, it'd be nice for it to at least keep up with inflation.

The equity models vary pretty significantly as Kage points out, with different levels of risk.  Since I don't want to get into some debate about which equity model is better, I'll just mention A&K, which I'm the most familiar with.  With A&K, they receive a commission for selling a membership, and then the entire remaining balance goes into the capital account in the member's corporation which is used to buy houses.  The houses owned by the members have zero debt.  The houses are held in a non-profit Del. corporation which is owned 100% by the members.  I would definitely consider that particular arrangement safer than the non-equity structure.  While you can't remove all risk, there is a lot less that can go wrong when there is no debt, the members own the corporation, you can fire management if they're not doing the job, and you've got a larger name-brand sponsor as your manager.


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## ClubsRDead

There seems to be consensus among the members that I know that JT is toast and the club is going into bankruptcy for sure.  Unless by some miracle his little survey is saving him but its hard to imagine the lender caring about that, especially since their deadline was Friday and the survey thing is today.  I've received emails from a couple people that there is a member group forming so hopefully we can get some discussion going about what our options are, if any.  I suspect if we were organized there might be something to do, ie buy some homes and continue a club under some fashion.  I'm all for the no debt, equity, or whatever model you want to call it.  If there was safety in the process, I'd contribute substantially - assuming or course we could get the right homes, in good places at a decent cost.  Not knowing all the details of the homes that the lender has now, maybe they are it - or part of them, and maybe not.

I think the best thing for us all to do is keep an open mind and see what happens.  Last time around as I recall, other clubs showed up with bids as did private entities.  Some will want to just buy the deal cheap and liquidate, others might want to make us deals or operate it.  Typically, we'll get tagged for much higher dues and some sort of deposit, so its hard to tell what the pulse of the membership will be I suspect if we all have to up again in the cash area.


----------



## DestiFan

I think post-11 there could be an interesting structure created with a small number of members.  Not perfect, as the debt is not going away, but something that could be salvageable and agreeable to the Sr lender.  Key will be partnering with another DC - will probably have to be equity based due to structure I have in mind.  I will contact Equity Estates and gauge their interest.    Would have to be outside their current fund, as any proposal would violate their prospectus in this scenario....too much debt.  Capital Source will not want the homes, HOA fees, et.  They will be amicable to proposals I believe, but will want someone at other end that has done this right so far...not a long list.  EE may say they are not interested, but worth a try.

The key here, unfortunately in my mind, is Capital Source will not want members to leave without homes and debt going with them.  Just my 2 cents.


----------



## Leonardo

*lies, damn lies, and statistics*

Not only is JT's 'member-owned conversion plan' ridiculous (and mis-named), so is his 'non-binding vote', especially since there will be no independant verification of the results.  

Given JT's history and proclivity for 'stretching the truth', I can imagine the following scenario:

_Only 100 people respond to the poll/vote, and 90 vote against it and only 10 vote in favor.  The results are presented to the members and Capsource as "We polled all 1200 of our members, and only 90 (or less than 8% of members) were not in agreement with the conversion plan"  _

Sound familiar?

It would definitely appear that the only way to get a true member-owned plan is to have it go into BK, get rid of all the stock ownership, and have a member group buy the assets at a bargain price and hire independent management to run it, structured similar to A&K (maybe they'd even serve as managers!)...

If a member list is resurrected, please include me!


----------



## Leonardo

DestiFan said:


> I think post-11 there could be an interesting structure created with a small number of members.  Not perfect, as the debt is not going away, but something that could be salvageable and agreeable to the Sr lender.  Key will be partnering with another DC - will probably have to be equity based due to structure I have in mind.  I will contact Equity Estates and gauge their interest.    Would have to be outside their current fund, as any proposal would violate their prospectus in this scenario....too much debt.  Capital Source will not want the homes, HOA fees, et.  They will be amicable to proposals I believe, but will want someone at other end that has done this right so far...not a long list.  EE may say they are not interested, but worth a try.
> 
> The key here, unfortunately in my mind, is Capital Source will not want members to leave without homes and debt going with them.  Just my 2 cents.



*DestiFan* - My guess is that A&K would be a more likely partner/manager, given their overall size and scope of experience across the hospitality sector.  It could be operated as a separate, non A&K branded club with simply management outsourced to A&K, or it would even be possible that the Elite club could be merged with A&K IF there was sufficient member contributions to meet their model or a temporary variant of it... and then Signature and Premier could be A&K levels to compete in the now-vacant lower market, again assuming that there was sufficient member capital contributed to truly make it member-owned... 

Yes, we end up paying for the homes twice, but at least the second time it should be at a good discount!  And, of course, that would be the case in any member-owned plan...


----------



## ClubsRDead

Leonardo said:


> *DestiFan* - My guess is that A&K would be a more likely partner/manager, given their overall size and scope of experience across the hospitality sector.  It could be operated as a separate, non A&K branded club with simply management outsourced to A&K, or it would even be possible that the Elite club could be merged with A&K IF there was sufficient member contributions to meet their model or a temporary variant of it... and then Signature and Premier could be A&K levels to compete in the now-vacant lower market, again assuming that there was sufficient member capital contributed to truly make it member-owned...



Ah, spoken like a true AK or Fortress executive, huh?  And just what percentage of "mgmt fee" does AK charge?  I know what I have heard the papers state, but what is the actual number since there are really mortgages, so people say, on some of the homes, and the fact that the club, at least today, is not break even?  

You mention paying for homes "again," yeah - many of us are still a tad bitter about our association with you and having written large checks thinking there was solidity behind it - only to find AK ran from the last BK and now numerous of us are tied up in an endless lawsuit.  In my opinion, regardless of what culpability AK may or may not have had, and outside of whether or not you have the best club in the world now -- quite the chicken shit's and didn't step to the pump during the TH fall, and haven't done one thing for a member of since.  

The fact that the model has some debt still and they NEVER state that is troubling, has a 80% refund (odd, if equity - don't you get it all?), has been selling primarily dues only memberships forever now, what a year or so of the "trial offer" that never expired doesn't exactly give me comfort.  AK may be great for worldwide travel but there's nothing impressive about their club mgmt, they've taken smaller homes and clubs like JT did from others and merged a hundred or so now dues only members together and never really sold anything or added new people with new cash since.  

And, from everything we learned during our last experience, Geoff Kent screwed us once already, so why in the world would be pay him ANYTHING here?  Where has he been with one of his emails or webcasts saying how sorry he is and what he would like to do in order to help us now?  Yes, maybe him sucking the millions he did out of the club originally was it's downfall?  Think of it this way -- AK charges a "licensing fee," - yet to be determined by the Courts or not, of around 20% -- which breaks TH.  They all admit, it was "too much."  Not the sole reason our club failed, but certainly a painful button.  Now, they charge even more and promise sustainability?

And why "only the ELITE" club members?  What the hell is wrong with the others?  They weren't necessarily "lower level" people or the dregs of society, in most cases - just early or first adopters.  And lower clubs to compete in a lower market?  What market?  There's NO market for memberships right now, isn't that pretty obvious?  Unless someone is willing to make "dues only" even cheaper which means bankruptcy comes even faster.

I assume anyone with compelling knowledge, who followed the TH sale and now subsequent demise of JT understands the real estate picture a little...most of the homes sold to JT were "private retreats" over distinctive retreats, and if course most of the homes from PE were "premier."  So what you're discussing is the term "cherry pick."

I would definitely vote NO to any AK run, managed or proposed entity regardless of the financial "deal" they make, and especially if they make a really sweet one.  They were in the crapper themselves when they did a deal with us last time and profited handsomely while the club suffered, then they left like a one night stand from a fat chick and never looked back or tried to make it right.  I would also discourage anyone from considering it based on history, but thats just me.

Again, no offense to those who are there and seem to be happy -- but we from the TH side of life know where AK management stands when the going gets tough -- just about the same place that JT is -- no where near you or helping you get a recovery.


----------



## DestiFan

Leonardo said:


> *DestiFan* - My guess is that A&K would be a more likely partner/manager, given their overall size and scope of experience across the hospitality sector.  It could be operated as a separate, non A&K branded club with simply management outsourced to A&K, or it would even be possible that the Elite club could be merged with A&K IF there was sufficient member contributions to meet their model or a temporary variant of it... and then Signature and Premier could be A&K levels to compete in the now-vacant lower market, again assuming that there was sufficient member capital contributed to truly make it member-owned...
> 
> Yes, we end up paying for the homes twice, but at least the second time it should be at a good discount!  And, of course, that would be the case in any member-owned plan...



I am not suggesting there is one solution here.  All things that help members will be great in my mind.

If possible, let's try not to crush any of the options right now.  I understand people have bias against all the different clubs, but bashing any of them won't help anything right now.


----------



## Leonardo

ClubsRDead said:


> Ah, spoken like a true AK or Fortress executive, huh?



I am most definitely not an A&K or Fortress executive, but coming from the PE side rather than the T&H/UR side, I completely forgot about the bad experiences T&H members had with A&K.  If that degree of animosity is prevalent throughout that (large) sector, then obviously A&K wouldn't work as a management partner  (though in this case the members would have the ability to axe A&K or whomever as management).  But in any case, the concept is for outsourced management that is only beholden to a 100% member-elected board of directors; I suggested A&K only because of their size and experience, but I am sure that there are plenty of other possibilities (but not being in the hospitality industry I don't know the names off-hand).

BTW, if you re-read my comments regarding elite being merged into A&K, it is simply based on the comparable value of the homes in the two portfolios, which is why signature and premier would presumably have to be separate entities... There was no implication whatsoever that premier or signature members are 'dregs of society' (and if you look at my profile I am Signature, not elite).  And I was not discussing a 'cherry-pick' strategy, just maintaining the current three tier stratification within UE... although if the new entity is 100% member owned, then cherry-picking isn't bad, as it just means we are leaving Capsource with the less desireable homes!


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## Leonardo

DestiFan said:


> I am not suggesting there is one solution here.  All things that help members will be great in my mind.
> 
> If possible, let's try not to crush any of the options right now.  I understand people have bias against all the different clubs, but bashing any of them won't help anything right now.



I am certainly not bashing EE; I am very impressed with them!  I just wonder about their ability to manage such a big club given their current size...


----------



## DestiFan

Leonardo said:


> I am certainly not bashing EE; I am very impressed with them!  I just wonder about their ability to manage such a big club given their current size...



I don't know if this would work for them b/c it would have to be a separate fund.  I just want to ask the question.  I know they won't do it in fund I - can't happen by prospectus.  

On the cherry picking of homes or club levels....people better get used to this.  It is going to happen and it will be a real problem for the groups not chosen.  Remember, the entity is structured divided on purpose.  Cap Source is not here to protect anything but it's principal balance at this point.  Who's club level gets disadvantaged will not be top of mind.

Monday will be interesting.  Love the fact our Club level Board of Advisors are in constant contact with all of us....just like the assessment.  Don't they represent us?  Well, one person did try to represent us last time and got threatened with suit like many of us "rogue" members....glad some of us were rogue.


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## ClubsRDead

Leonardo said:


> And I was not discussing a 'cherry-pick' strategy, just maintaining the current three tier stratification within UE... although if the new entity is 100% member owned, then cherry-picking isn't bad, as it just means we are leaving Capsource with the less desireable homes!



One can assume that cherry picking doesn't put Capital Source where they want to be or they'd have sold higher end (or upper appraisal) homes already.

My point was merely this, don't take it personal - please - is that AK could have done the right thing then, meaning during TH, and could still do it now - they should be buying the WHOLE damn thing if they are committed to the industry, at market price - homes, everyone, everything and showing they care about a problem that they helped to create.  I still have my original AK books and marketing propoganda and they certainly claimed to be the first and the authority...until times got tough, then they bailed and left about 500+ of us hanging in the wind.  With the big Fortress money behind them its unreal to me they havent made their presence known in this process.  The only thing I have seen them "do" in the industry was when they sent their short term president down to one of JT's "destination club meetings" and they all glad handed each other, talking about financial transparency, claiming sales were going out the roof, etc.  And we're all where, now?


----------



## Kagehitokiri2

removedddddd


----------



## ClubsRDead

what does "removed" mean?  Did I say something inappropriate?


----------



## Leonardo

ClubsRDead said:


> what does "removed" mean?  Did I say something inappropriate?



It just means *Kage* posted something, then decided to remove the posting, but since you cannot actually delete the posting, you can just edit it to 'removed' or 'x' (since there must be at least one character in the post).


----------



## ClubsRDead

Alright, thanks.  For some reason I was thinking Kage is / was a "moderator" and had editable rights.

On that note, who "owns" THIS site?  Are we anticipating UE to try to "buy" it too in order to quiet it down?  Not that he could, I don't Jim or Rich are going to have a lot of discretionary income for awhile.

I am guessing Scherer is wishing he had his site back right now versus his 16k shares of UE stock that is probably worth around $4k now, if anything.


----------



## BetterClient

Have to credit Jimmy T! His picture is now in my dictionary next to the words, audacity, chutzpah, and coercion. 

Let's wait until the Thursday before filing bankruptcy to spring this surprise on the members-and let's give them no chance to digest this, rather let's try to force feed them a plan that keeps me on the job! 

I would be all for the club going member owned. That means we would own it all, and would hire professional management to run the properties. There would be no need for excessive sales and general administrative expenses.

Let's file for chapter 11, get management tossed out, do a $30MM assessment to fix the balance sheet, renegotiate the debt terms with CapSource, discharge the subordinated liabilities, convert our membership redemption liabilities into common stock-and continue to travel. 

Honestly we need Jimmy's vision and leadership like a bald guy needs a comb.


----------



## Kagehitokiri2

ClubsRDead said:


> I am guessing Scherer is wishing he had his site back right now versus his 16k shares of UE stock that is probably worth around $4k now, if anything.


yeah, he should have spent a fortune defending against a SLAPP lawsuit...


----------



## Jack1234

Kagehitokiri2 said:


> yeah, he should have spent a fortune defending against a SLAPP lawsuit...



It might be the best asset UE owns!


----------



## ClubsRDead

BetterClient said:


> I would be all for the club going member owned. That means we would own it all, and would hire professional management to run the properties. There would be no need for excessive sales and general administrative expenses.
> 
> Let's file for chapter 11, get management tossed out, do a $30MM assessment to fix the balance sheet, renegotiate the debt terms with CapSource, discharge the subordinated liabilities, convert our membership redemption liabilities into common stock-and continue to travel.
> 
> .



I couldn't agree more.  This process is somewhat silently being run around right now from some of the communications I have received.  I think the plan is within the next week (assuming he files) to do a "contact" of some sort with the members.  I agree we need to renegotiate with CapSource or even better find a lender or private equity to replace them.  I suspect we can get their price down some during the CH11 and the reality should hit them soon what the homes are really worth if they have to go to liquidation.  Regarding any member redemptions / liabilities - I think they all have to go away with the bankruptcy and any new dollars become real equity in the new entity.  I am highly confident this can be done cheaper and better than any agreement with A&K or another club because they all have high operating costs and we don't need to be paying sales, marketing or anything related to increasing their brand identity.  We did that already at TH and it got us no where.


----------



## Kagehitokiri2

but if there is no member communication, arent we going to see a lot of people handing JT more money...

wait a minute - why would capsource even allow that?


----------



## AKTHUE

Kagehitokiri2 said:


> but if there is no member communication, arent we going to see a lot of people handing JT more money...
> 
> wait a minute - why would capsource even allow that?



It is in CapSource's best interest if JT can raise more money from members, because a portion of that money will go to CapSource to pay accrued interest and maybe some fees for restructuring the debt, and maybe some payment to reduce principal, but CapSource won't have to write anything down. So CapSource is aligned with JT's interest here, so long as they don't have the fund operations very long.

If JT can't raise money, any other investor will demand that CapSource restructure, forgiving some of the debt or converting it to equity, or if there is no investor, CapSource may end up with the property.

Members are still better off not agreeing to JT's plan. Even if JT has succeeded in preventing members from organizing as a group, I don't believe that very many of them will give him any more money at this juncture. He's lost credibility.


----------



## Kagehitokiri2

no no, why wouldnt capsource _require_ debt paydown.. _direct_ to them.


----------



## ClubsRDead

AKTHUE said:


> Members are still better off not agreeing to JT's plan. Even if JT has succeeded in preventing members from organizing as a group, I don't believe that very many of them will give him any more money at this juncture. He's lost credibility.



I would guess that CapSource is way past thinking JT is going to be salvage himself.  The "plan" he presented wasn't even a "plan," rather a plea.  Five options, yet he is only focused on what that wipes out the subordinate debt to him.  His entire presentation hinged on raising about $30MM and only giving CapSource $10MM, barely enough to cover past due interest, break up fees and replenish his required reserve account.

I also would speculate from the amount of emails UE has sent out today regarding this "mandatory non binding necessary must do, you won't be held to it" poll that the numbers haven't come in the way he had hoped they would.  And even if they had, if you were CapSource, why would you believe anything "non binding."

Best thing for us is to reorganize, refinance, take control.  I disagree that a merger with another club, even one that claims to be "equity" is the right answer because it appears we already have too many members and not enough homes.  Scaling the business to cover operating costs and provide basic services is all I need.  I've never been to one of their fancy offices, like the one in CO they just closed.  Was having that space necessary?  For years TH had a KC office and a CT office, why?  Because McGrath lived in CT?  And then Jim added FL to the mix.  It's not like members or the public come there for anything.  In fact the most visitors either of our clubs have got over the past couple of years has probably been lawyers and restructuring firms.  I'm not real sure that paying their rent is a good use of our member dues when half the houses I go to have plenty of necessary maintenance to be performed.

I think tomorrow, certainly by mid-week will be the tell-tale of the situation.
Anyone who wants to PM me emails / contact info I will get you on a member communication list that is starting regarding alternatives.  Remember, we don't have to agree to any plan that may come up during the next several weeks or even be presented to a creditors committee.  Frankly, we all jumped the gun too quick with JT and I think that was a function of our committee not having many options and wanting cheap travel themselves.  That group as I recall was almost all members, who knows what this one will be.  Then they all had "real" cash losses of deposit, I don't believe that to be the case this time as I haven't talked to anyone yet (mainly old TH people I know) who paid real deposits.  True, PE folks hadn't "lost" theirs (yet) in a bankruptcy like we already have, but you had to see the writing on the wall with the 100% refund model.  Bottom line, end of day -- a lot of clubs may come to us with options but I think we're smarter this time and do what is best for ourselves and I, personally, am not paying some dues only BS with Quintess or ER, or paying partial deposit discounts to go have even more availability problems.  And I sure won't go to AKRC because I paid, personal check, over $500K to their name and it blew up on me.  So lets hope this group who is trying to make this work out is actually successful.  Otherwise, just liquidate it and we can get on with our lives and quit waking up in these nightmares.


----------



## DestiFan

This process of converting to a member owned Club is going to be a lot more problematic than people are thinking....

1) Cap Source does not own all the debt - just most of it.  There are many properties held in other entities that have separate debt associated with them - including many of the foreign properties. 

2) Members will not want all the properties - wait to you see some of the HOA dues and maintenance requirements (this is one of the big issues) - but Cap Source will want to get rid of those properties first b/c they will be most onerous.  In addition, what members think are the best properties - are some of the most marketable.

3) The equity needed to salvage this deal will be significant with the amount of people likely to drop completely.  At that point, it may be cheaper to join an EE or a AKRC or just start something from scratch (I understand the bad blood at AKRC - but not all will have had that bad blood).  The newco, almost anyway you slice it, will have a lot of debt in a restructuring.  

4) The money JT says is due is HIS version of the story - anyone here think there may be a few more claims out there?  Salaries, trade payables, HOAs, etc.  I bet we owe more than the number that was released to us.

5) The ongoing maintenance, service needs, legal, etc. is going to be very expensive.  A lot of locations, ongoing refresh needs, jurisdictional obligations, etc.  It can be done, but it will require full-time staff and supervision.

The good news is Chapter 11 should proceed slowly.  There will be time to sort a lot of this out.  Also, if someone did buy this stock or do the RAP conversion - you may want to look into that with Counsel.  Just a thought.


----------



## AK.TH.UR.UEmember

ClubsRDead said:


> I would guess that CapSource is way past thinking JT is going to be salvage himself.  The "plan" he presented wasn't even a "plan," rather a plea.  Five options, yet he is only focused on what that wipes out the subordinate debt to him.



I don't think the $10 million in sub debt is from JT.  I believe it is from an outside source (JDI maybe..??) which provided it in connection with the T&H acquisition through the company with the similar name.  In any case, it seems to be converting to [worthless] equity under JT's plan.

In the real world, I think it probably goes bye-bye in any deal.

And I agree with the comments about a member-owned club with a management company, no marketing/sales expenses and something more like what you see in an equity private golf club...

If costs are cut dramatically, CapSource takes a haircut (and maybe some equity..??), and the members hang in, this might just be able to survive.  Some new $$ is probably needed to appease CS, however, and that's the hardest part - who will supply new cash for a reorg...???


----------



## TarheelTraveler

Given the vary different perspectives that members will have, any intelligent operator that buys UE or the pieces of UE will give the members choices.  Some members will want and will pay for true equity for stability, either currently or over a longer period.  Other folks will want continued travel at the cheapest level possible even though it may mean further problems in the future.

A few comments on A&K.  I know that there is some bad blood between A&K and the T&H members that joined while A&K was licensing its name.  I get it, and I understand.  A&K did not own the club, and the legal documents clearly said so. However, the marketing like most licensing deals absolutely emphasized the A&K connection.  I've spent hours reading the legal filings to get both perspectives, and like everything, there are two sides to every story.  A&K IMHO did not do enough initial and continuing due diligence and did not do enough to insist that T&H follow the contract between the two.  Again just my opinion, and of course, hindsight is 20/20.  That was an expensive lesson for A&K to learn, and I'm sure there are regrets for themselves and the members.  However, there is a reason the A&K RC is structured so differently from every other club, and a reason they did it before equity clubs became in vogue.  Nonetheless, even though licensing deals are common for brand names and that the licensor has zero obligation to the licensee's customers under most state's laws, I do hope that they'll do something to get this thing behind them, which will benefit those members, particularly given what is happening with UE.    

A few additional thoughts:

1. The A&K member's club (the member owned Delaware non-profit corp.) has zero debt.  KPMG says so, A&K says so, and I've done some research and what I found is consistent with that.  The member's club owns 10 or 11 properties debt free, which is correct given the amount of money the member's have put into the club (or came over from prior clubs).  While I couldn't rattle those houses off of my head, the audited financials clearly state which ones are owned by members without debt.  A&K owns the other houses except for 1 lease I believe.  Again, that information has been made available to us.  A&K may have some sort of debt on those, but those aren't the ones owned by the members.

2. The club is pretty darn close to break even, and any shortfall A&K has been kicking in, because the member's club is to remain debt free.  I do think they'd be better off having a few hundred more members, because you'd definitely get some efficiencies in marketing, legal, accounting, etc.

3. A&K has sold memberships since they launched.  To my knowledge, only a few clubs have a net positive in members, and they're one of them.  I'm pretty sure the club had around 175 members at the time of the annual meeting in April (they gave the exact breakdown of the memberships at that time).

4.  I don't think anyone can give a 100% refund on a sustainable basis, because you've got sales expenses.

5.  A&K RC members don't pay marketing and sales costs.  All of that has to come out of their commissions from sales.

6. In my experience, A&K RC's management is very good; the communications are always professional; they're very smart people with great backgrounds in hospitality, finance or real estate; and they'll answer any of my incredibly anal and annoying questions genuinely unlike about every contact that I've had in the DC world.  Compared to my friends in other DCs, I feel confident in saying that we've got good management.

7.  Service and residence upkeep are both great as well.  Money is actually set aside from the dues to be used only for upkeep.  It's not an add on if there is extra money.  Accordingly, the houses have stayed in great shape.

Anyway, I would just say keep an open mind.  Who knows who will come forward in the coming weeks, but you could do a lot worse than A&K that's for sure if they end up being one of the suitors.


----------



## AK.TH.UR.UEmember

TarheelTraveler said:


> 5.  A&K RC members don't pay marketing and sales costs.  All of that has to come out of their commissions from sales.



Can you share what % of the dues A&K takes as its management charge..??  IIRC, they were getting a 20% "royalty" from T&H for the use of the name.

And, I am sure you are aware, the bad feelings toward A&K led to a lawsuit, so would you guess that A&K wouldn't do anything for the former T&H folks that are suing them..??


----------



## NeilGoBlue

I concur with everything that Tarheel has said.   The member owned properties ARE 100% debt free.

AK makes money 4 ways.

A commission on the membership sales (up to 27.5%, but it's less right now)
15% on annual dues
a $50K fee to transfer a property into the club at the 'cost' of the property (it includes hard and soft costs, but no interest costs are added to the property price)
They also make some money on the back end if a member resigns. (but I can't remember the %)


----------



## ClubsRDead

DestiFan said:


> This process of converting to a member owned Club is going to be a lot more problematic than people are thinking....
> 
> Not really - that's what a bankruptcy is for.  You do a liquidating 11 with a 363 and buy only the assets you want.  For us members, we don't, technically, have to take anything.  And, depending on how they treat any redemptions, that affects our claims (which are worthless anyway).
> 
> 1) Cap Source does not own all the debt - just most of it.  There are many properties held in other entities that have separate debt associated with them - including many of the foreign properties.
> 
> True, there's some 2 dozen or so homes outside of the CapSource loan, all tied up with various encumbrances, mortgages and other associated liens.  CapSource does have subordinate pieces of a few.  Most of these are the homes that came with the PE merger, though some are in the senior note.  A couple are even listed in Rich's name, just like the elusive destination "Candlewood Lake, CT" was actually JTs primary residence at one point.  All of this, however, is moot.  If we don't want them, they go away in the CH11.  If we want some of them, we bid on them just like everything else.
> 
> 2) Members will not want all the properties - wait to you see some of the HOA dues and maintenance requirements (this is one of the big issues) - but Cap Source will want to get rid of those properties first b/c they will be most onerous.  In addition, what members think are the best properties - are some of the most marketable.
> 
> As to the above, members, just like any potential suitors of the business - if there are any, especially in a member-owned and member run club, have the choice to take what they want.  Obviously, some factor of number of members signing in will affect inventory levels.  Pretty easy to figure out and then just review op costs for each and put a proforma together.  You take what you need and want, liquidate the rest.  Dues for travel are what cover the maintenance issues and operating costs.  Just like everyone else.
> 
> 3) The equity needed to salvage this deal will be significant with the amount of people likely to drop completely.  At that point, it may be cheaper to join an EE or a AKRC or just start something from scratch (I understand the bad blood at AKRC - but not all will have had that bad blood).  The newco, almost anyway you slice it, will have a lot of debt in a restructuring.
> 
> This I disagree with, in part.  I don't think it's a win for anyone to salvage the deal, meaning the entire thing.  Why would someone?  Houses, members.  Setting up the newco isn't so problematic if you have the right people doing it, and it would ideally have no debt.
> 
> Why join EE or AKRC?  Curiously, you say you are "still with EE," constantly tout AKRC, and then say "us" and "we" in these conversations regarding UE, so what club(s) do you belong to and / or work for or with?
> 
> I'm sure during this process, if anyone cares, we'll be presented with options to analyze.  One size doesnt fit all, so out of 1200 people, and based on your above comments of 75 or so homes with Cap Source and another 20 that may just be off the table, the club needs to scale significantly.  So, ER, AK, Q, EE - whoever wants to try to piece meal members from our club together, maybe even a few houses - it doesn't matter.  All of them, like UE, need to shore up their operating losses.  Some are more significant than others.  We've paid for enough TH/AK/UR/PE/UE marketing, big salaries and BS in my opinion already.
> 
> 4) The money JT says is due is HIS version of the story - anyone here think there may be a few more claims out there?  Salaries, trade payables, HOAs, etc.  I bet we owe more than the number that was released to us.
> 
> Again, the claims don't matter to anyone from the member perspective.  That is what the CRO and bankruptcy are for.  When you say "we owe," are you implying you are a member?  Members, technically, owe nothing in this scenario today, because we own nothing.  Just worthless claims, but more importantly, very interrupted travel.
> 
> 5) The ongoing maintenance, service needs, legal, etc. is going to be very expensive.  A lot of locations, ongoing refresh needs, jurisdictional obligations, etc.  It can be done, but it will require full-time staff and supervision.
> 
> Yep, dues cover maintenance and host costs.  Legal is way overstated in this process in primary combination loans.  And, it's just the cost of doing business.  The legal we had to pay to deal with the THAK disaster was money down the drain and AK never settled with any of us, nor made us one single offer.  Of course, we can anticipate one now and probably a good number would go over to them with a dues only + 25% or something, or like pay 50% of deposit, or whatever.  Those that don't still have a bad taste in their mouth.  I will always contend that if AKRC wanted to do the RIGHT thing here, they'd have already done it, guaranteed our travel and paid Cap Source.  They likely don't have the money.
> 
> The good news is Chapter 11 should proceed slowly.  There will be time to sort a lot of this out.  Also, if someone did buy this stock or do the RAP conversion - you may want to look into that with Counsel.  Just a thought.
> 
> This I very much disagree with from a practical, travel perspective.  Since Cap Source is the assumed DIP, they'll want it to be as short as possible, meaning our travel options diminish every day.  No doubt they won't be covering non Cap Source secured properties, nor would I.  And it's pretty obvious the only people that have the stock are JT and co.



At the end of the day, I think we just hold out, hope for our travel when and where we have it - knowing full well it's going to suck for a while, and watch the show.  I'm more inclined to do our own thing than ever rely on a Kent, Case or Addoms offer to help this group out -- and certainly not expecting any more magic out of JTs hat.


----------



## ClubsRDead

Well, somehow my comments in the above post came in the same "quote" area as Destifan comments - sorry.

Regarding the AKRC, to each their own.  A 27% commission on new sales, what new sales?  A few on the back, their website says 20%?  In a new equity arrangement with no sales or marketing necessary, all those costs are eliminated.  I'd think their mgmt fees run upwards of 35% all in.  And 175 members is about what I said - but they bought 105.  Are you implying they sold an actual 70 full price memberships?  I bet not, only trials.  If they did in fact sell them for rack rate, then where's your additional inventory?  The 10-11 came from the acquisition of the other clubs.

I still think Geoff Kent could have come out of wherever he was holed up in 2006 and publicly apologized for any involvement and losses and committed to help TH recover.  Instead, they sat there and watched it happen, claiming no culpability.  Sure, their lawyers call us and send us tons of documents about the case, claiming "licensing fee," but I never understood why all of the money they spend on legal wasn't put into just making us hole, or at least better.

There are documents out there showing a loan to AK from Fortress for the acquisition of BelleHavens and Crescendo.  Since most of the current AKRC members put up no new cash (if not all) other than dues, somehow that loan is still hanging.  Or, what % of the members (the 175) own the club that owns those assets free and clear?  If thats the case - you have 100 "original" or equity members - owning free and clear 10-11 homes worth $3M or so each?  Seems like an easy answer to me - sell it and you all profit $300k each.


----------



## Baily

DestiFan said:


> I am not suggesting there is one solution here.  All things that help members will be great in my mind.
> 
> If possible, let's try not to crush any of the options right now.  I understand people have bias against all the different clubs, but bashing any of them won't help anything right now.



DestiFan:  Good to see you again here.  Been taking a break from all things UE for a while.  Had a lot of catching up to do, and was thankful for all these posts, like a Cliffs Notes for the chaos.  Still glad I didn't hand UE any assessment money.  Will be glad to keep my money this time around also.  To All:  I share your pain, however, I wait on the "resignation list" still.  Keep posting, I will keep reading.


----------



## ClubsRDead

Baily said:


> To All:  I share your pain, however, I wait on the "resignation list" still.  Keep posting, I will keep reading.



Are you a traveling redeemer, or not?  Start traveling (not that there will be any inventory or availability) - but as I recall from TH days, many who were on the list, and even some who had fully redeemed cut deals during the UR acquisition and came over here -- one way to get some "value" out of it before it becomes a zero claim in the bankruptcy.


----------



## Kagehitokiri2

ClubsRDead said:


> I, personally, am not paying some dues only BS with Quintess or ER, or paying partial deposit discounts to go have even more availability problems.  And I sure won't go to AKRC because I paid, personal check, over $500K to their name and it blew up on me.



* you wouldnt pays dues even for a year? Q has some la samanna, canouan, amangani. ER has some places too.

(of course there are trials as well.)

* re AK, there were no disclaimers regarding license? so TH committed fraud?

...

ive posted all breakdown comparisons here... i guess the next thing im doing is organizing... *done*.


----------



## TarheelTraveler

ClubsRDead said:


> Regarding the AKRC, to each their own.  A 27% commission on new sales, what new sales?  A few on the back, their website says 20%?  In a new equity arrangement with no sales or marketing necessary, all those costs are eliminated.  I'd think their mgmt fees run upwards of 35% all in.  And 175 members is about what I said - but they bought 105.  Are you implying they sold an actual 70 full price memberships?  I bet not, only trials.  If they did in fact sell them for rack rate, then where's your additional inventory?  The 10-11 came from the acquisition of the other clubs.
> 
> There are documents out there showing a loan to AK from Fortress for the acquisition of BelleHavens and Crescendo.  Since most of the current AKRC members put up no new cash (if not all) other than dues, somehow that loan is still hanging.  Or, what % of the members (the 175) own the club that owns those assets free and clear?  If thats the case - you have 100 "original" or equity members - owning free and clear 10-11 homes worth $3M or so each?  Seems like an easy answer to me - sell it and you all profit $300k each.



A few additional comments on A&K:

1. A&K has been very good to the A&K RC members.  We've got zero reason to complain, particularly when you compare our experiences with what is apparently routine in the DC world.  Just a few examples.  As NGB points out, A&K can take up to a 27.5% commission on new sales.  They are currently taking much less in order to discount the membership prices to reflect the economy, while also keeping the capital contribution to the member's entity stable.  They didn't have to do this, but they are.  Any deficits are also funded by A&K, so the member's corporation remains debt free.  Again, much better than the norm of leveraging up the houses.

2. Again, the members don't fund the sales and marketing expenses.  A&K gets a commission on whatever sales there are, and they are responsible for any of those expenses that they choose to make.  A&K can take a management fee of 15% of dues, but again, they're covering the management expenses, so it's not like its some profit interest that members are forced to pay to have the A&K name.  In other words, it's not like members pay the management expenses and then have to pay 15% of dues.

3. A&K RC has given us the precise breakdown of members and member sales, including full member equivalents, but I certainly don't know it off the top of my head.  New equity memberships have definitely been sold, but most have been the two-year trials.  Furthermore, A&K switched to 1 in: 1 out unlike other DCs, so the equity members consist mostly of the legacy members, some new members that took the spot of legacy members and a few additional members that came in before switching to 1 in: 1 out.  I frankly don't expect a big increase in equity memberships until the economy turns around, and I don't think any club is expecting anything different.  

4. A&K would only get a back-end profit of 20% to the extent that a member was leaving with more money than what they put in originally.

5. A&K may still owe Fortress money for essentially buying CR/BH management and the initial block of members, but that is not the member's obligation.  What you may also be referring to is when A&K bought CR, we had a leveraged equity club.  In order to switch to the model of owning the houses debt free, members agreed to put in additional funds to pay them off (this was structured as a loan from Fortress).  As an example, a member might have had to pay 25-100K over a number of years to pay off the debt, depending on the level of membership.

6. Using myself as an example, I do have something like a 300-400K interest in the portfolio based on my ownership.  We came over with assets from CR, and CR members put in an additional 25K-100K or so.  However, I'm skeptical that I would receive that in a liquidation scenario, and the travel is great, so I'm not sure why we as a membership would vote to liquidate.

In any event, I'm not sure that I'm going to convince anyone who is predisposed against A&K to believe anything different.  I guess we'll see what happens in the next few weeks with UE.


----------



## AKTHUE

TarheelTraveler said:


> A few additional comments on A&K:



Tarheel, can you give a short summary of A&K for those who may be contemplating life after UE?

Where are the locations, sizes, quality?
What is availability like? Holidays? Principal reservation policies?
Becoming a member - what are the upfront and annual costs? For how many days?
What are the current special offers?

If this is easily found on the web, please send a pointer, though your own experience and summary may be even more valuable as I'm sure all of us have learned that reality in the DCs differs from the promises.

Thanks


----------



## DestiFan

If possible, can we have the other DC questions outside this thread?  I am sure Tarheel, myself and others would be happy to discuss our respective Clubs and the strengths of the various models, but I think this thread should remain on the UE news and drama as much as possible.  Let's start another thread with potential options for UE members if that is ok with everyone else...?

DF



AKTHUE said:


> Tarheel, can you give a short summary of A&K for those who may be contemplating life after UE?
> 
> Where are the locations, sizes, quality?
> What is availability like? Holidays? Principal reservation policies?
> Becoming a member - what are the upfront and annual costs? For how many days?
> What are the current special offers?
> 
> If this is easily found on the web, please send a pointer, though your own experience and summary may be even more valuable as I'm sure all of us have learned that reality in the DCs differs from the promises.
> 
> Thanks


----------



## PuntaEscape

*No News*

Well, it is 11:45 Eastern, almost 12 hours after the ultimatum deadline on the non=binding poll.  How long does it take to count 500-1200 ballots.  Perhaps the news is so good it can not be shared as part of their massive communication program.  I guess the use of the word non-binding is key here, it was also non-binding that we get poll results in a timely manner.  ANyone have any news??


----------



## AKTHUE

PuntaEscape said:


> Well, it is 11:45 Eastern, almost 12 hours after the ultimatum deadline on the non=binding poll.  How long does it take to count 500-1200 ballots.  Perhaps the news is so good it can not be shared as part of their massive communication program.  I guess the use of the word non-binding is key here, it was also non-binding that we get poll results in a timely manner.  ANyone have any news??



UE missed loan payments in June, July and August, had their cash seized, received a notice of default, negotiated a forebearance, appointed a restructuring officer and chose to only inform the members of any of this the day before the forebearance was to expire. 

Why would you expect candor or complete honesty now?


----------



## Jack1234

Just in case.... I put in a request on-line this morning for a few days in the Spring.  I actually received a phone call back from my planner (who survived the big cuts in staff late Friday).  I was told that Cap is not going to be funding any more expenses of leased home effective now and that UE was not going to be taking any new reservations on any location at this time.  My request (it is at a former PE owned home) is "being held" at this time pending what happens at the club.  Planners state they know nothing of the poll results or what is happening.  That's all they are saying for now.....  I do wish the staff well as it has been very tough on them.


----------



## BestHC

Why would anyone be interested in moving forward towards purchase or absorbtion of a company and it's off shoots that has so many court cases pending or litigation in the process of being filed?  The costs can be prohibitive as well as the publicity


----------



## willmyclubmakeit

*post BK?*

won't the litigation and such be cleared by the bankruptcy court/filing so anyone would invest in a clean newco unencumbered by the sins of the past and with less leverage also?  that would be the way I would look at this if I were an investor---its probably the way that UR should have purchased PE's assets originally but.....we know the rest of the story.


With BK cleansing leases, litigation, and other costs/liabilities and a haircut on the debt this could be much more attractive to an investor if they do not kill the brand/membership asset before then.


----------



## BestHC

*won't the litigation and such be cleared by the bankruptcy court/filing so anyone wou*

This would make just one possible outcome feasible..that being BK...Is that correct?


----------



## willmyclubmakeit

*future*

personally I think that is the only option--maybe with a prepackaged solution if Capital Source were patient but BK could still work out better for us than no travel, no deposit,nothing except requests for member funding from UE.....so I view a deal post-BK with new funding and management enhancements and lower cost base I hope.


----------



## golfisking

*Cancellations*

Just heard my Tuscany reservation this week will not be honored!  Where is the email list to get organized?


----------



## BestHC

WOW....The landslide begins....


----------



## FLdest

I just got back from a trip, I am so sorry for those of you losing reservations. 

As a former A&K, T&H, UE member, I will not put another penny in to what looks like a concept that just can't work.  Thank goodness, I never fell for any of the enticements and upgraded, nor did I refer any friends and family.  I did that at A&K and learned my lesson.

I will miss traveling with the club as the houses were always well appointed, destination specialists fantastic and overall a really good product.  It was really ideal when my kids were little.  Now that they are older, we can use hotels much more comfortably and the economics of any DC were making less and less sense to me when I couldn't get any reservations during school breaks and the offers at comparable properties were pretty darn good.


----------



## DestiFan

golfisking said:


> Just heard my Tuscany reservation this week will not be honored!  Where is the email list to get organized?



Maybe someone can dig up our old one from last February?


----------



## Desties

Yikes! I probably should have taken home some of the spare Aveda Rosemary Mint shampoo bottles during my last stay. I'll miss those -- though not as much as my deposit.


----------



## golfisking

*Florence*

Anyone care to give a rec for an alternative Florence accommodation since I have already spent the money for 4 plane tickets...


----------



## FLdest

*Florence*

Try calling the place you were staying directly.  They may book it to you personally for less since it will likely be empty.


----------



## BestHC

Try starting with VRBO.........that really is tough luck


----------



## Leonardo

golfisking said:


> Anyone care to give a rec for an alternative Florence accommodation since I have already spent the money for 4 plane tickets...



Which Tuscany property?  If it was one of the Premier properties, they are both in mini-developments and be able to rent another unit in the same development.  If it was the signature home, you could call the local host (I assume you got the escape plan already with contact numbers?) and see if he has recommendations on comparable properties; I think he was a property manager for other homes in the area...


----------



## willmyclubmakeit

*tuscany*

Chuck
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Vacation Rental in Tuscany      Sojourn-In-Italy.com
Culinary Vacations in Tuscany  WorkshopsInTuscany.com
Vacation Rental in Maine          MaineRiverWatch.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
USA  (00 1) 805 682 2386
Italy (011 39) 0575 601 782 Home
         (011 39) 339 199 3070 Cell


----------



## ClubsRDead

BestHC said:


> WOW....The landslide begins....



What was your story to share?


----------



## BestHC

ClubsRDead said:


> What was your story to share?




As I said prior  "I apologize for being a bit premature on the big news posting. It seems that others that I am involved with continue to believe that our conflict of interest phase is still in effect. I don't agree...."   I think you know the beginning of my story (Phase 1)...Phase 2 relieves me of all outside obligations


----------



## Kagehitokiri2

a handful of people had asked about high end rental companies at several points >


Kagehitokiri2 said:


> high end rental companies, compiled on 11/10/09 >
> 
> all properties include local host and daily housekeeping
> - Chalet Spa $1.7K > $32K+ (includes butler, chef)
> - Villazzo $2K > $29K (includes transfers, bellstaff at arrival/departure, unpacking)
> - Homes Away *$700* > $6.6K+
> 
> inclusions/staff varies
> ~ Scott Dunn  (some with nannies and catering)
> ~ Abercrombie & Kent  $165 > $5.1K [used EU site at time, i believe they have new villas since then]
> ~ there are lots of catered chalets in europe
> 
> new from villazzo (no inclusions, weekly housekeeping)
> x Villazzo V Villas  $1.5K > $12K



...



Kagehitokiri2 said:


> A&K realized $1.5 million of licensing fees in 2006, down from $6.5 million in 2005.
Click to expand...


----------



## Jack1234

golfisking said:


> Just heard my Tuscany reservation this week will not be honored!  Where is the email list to get organized?



Do you know if this was a leased or owned property?  Are any trips still "on" or have all been cancelled at this time?


----------



## TarheelTraveler

Could members not have been given some forewarning with respect to their reservations?  Haven't members been through enough?  This kind of stuff drives me nuts.  I can't imagine given the circumstances that members will OK management going back to the member well again, but I guess we'll see.  Of course, they might have been more likely to vote yes before they knew what was going on with their reservations.

Interesting articles on DCNews regarding the various UE options (http://www.destinationclubnews.com), with a little more editorializing by DCNews than normal, which makes it more interesting.  Still nothing on SherpaReport about all of this.

By the way, UE member postings regarding their concerns with recent UE communications have been removed from the Facebook site.

Also an interesting article on Demeure from the esteemed Susan Kime http://destinationclubnews.com/News_A_Second_Look_At_Demeure.php

I knew she was writing for Luxist, but didn't know that she was doing articles for DC News as well.  Demeure is a very interesting model and has a lot of potential benefits, but it does seem like it would have some of the inevitable shortcomings of other exchange or lease programs like inconsistencies in amenities and the quality of the management of properties and the properties themselves.  I understand that the community nature of it is supposed to reduce some of these issues, but I don't think it's possible to replicate that without one centralized manager overseeing every property.  The DC homes that I've stayed in have always been maintained better than a privately owned rental.  Also, I don't get the whole 40% off even if I don't contribute property.  It seems like owners of popular properties might not be happy renting at 40% off if it really is 40% off their normal rates.  Might be feasible for moving excess inventory, but not for prime rental weeks.  In any event, it's another model to look at and certainly a lot better than the non-equity model IMO.


----------



## Kagehitokiri2

TarheelTraveler said:


> .By the way, UE member postings regarding their concerns with recent UE communications have been removed from the Facebook site.



from the _member_'s page??? jesus christ.

agree re exchange companies, anything involving uneven deposits means exchanges. although demeure plans to own some homes... no clue how that will work. looking through 2 articles soon, will quote anything that jumps out at me.

meh. no mention of buying properties, which was mentioned a while ago. 

"It’s always been much more expensive to operate vacation homes than estimated." 
its very simple and easy if you have hotel managed - simply divide that monthly cost among members.
thats what the barebones clubs do - simply add it up, and divide it up. doesnt matter what level of service youre providing. just be transparent.


----------



## Jack1234

Kagehitokiri2 said:


> from the _member_'s page??? jesus christ.



I believe TT means from The UE Facebook page (controlled by UE) where members could post comments, not from individual member's pages.

JT is quick to buy bad web press for worthless stock but I don't think he's buying space on member's pages!


----------



## Desties

I believe the Tuscany sig property is owned. I remember when it came online that Rich was offering members an opportunity to become investors in the property itself (to line up financing, one would think).

I went ahead and put in a reservation request earlier this afternoon, but have not yet heard back from the club. 

I'm guessing this is the last I'll see of those Aveda shampoo bottles.


----------



## Kagehitokiri2

http://www.sherpareport.com/destination-clubs/demeure-launches-1209.html


> 21 December 2009
> Demeure club  divides its properties into three tiers of $0.5m-$1.5m, $1.5m-$3m and $3m+ homes. The clubs goal is to reach *400* member-contributed homes (equal to 60 full time equivalents) and *20* club-purchased homes, throughout the world. In years 20-25 the club plans to wind up and distribute the proceeds from the sale of club owned homes to members. The club is off to a good start with 37 member contributed homes.


concept dropped?


----------



## Mullyclu

Love your comment!



Desties said:


> Yikes! I probably should have taken home some of the spare Aveda Rosemary Mint shampoo bottles during my last stay. I'll miss those -- though not as much as my deposit.


----------



## TarheelTraveler

Jack1234 said:


> I believe TT means from The UE Facebook page (controlled by UE) where members could post comments, not from individual member's pages.



Correct, Jack.  The UE post on JoJo the dolphin is now again the most recent post.


----------



## Mullyclu

Not really any new news, but not sure if it was posted. Saw this on FractionalLife.com  

"after several years of working to reduce our operating costs" (4th paragraph)

Yea right. BS on this statement. Should have got the ax out before that member assessment.

http://www.fractionallife.com/news_destination_club_ultimate_escapes_in_crisis1241.asp


----------



## golfisking

*Facebook*

Is there a way for us to form a facebook group?  Any takers?


----------



## Northof49

Please add my name to any lists for further communication concerning the UE disaster should other options arise.  I just rec'd notice from a JT email that results should be out on the vote by end of business tomorrow.


----------



## ClubsRDead

Northof49 said:


> Please add my name to any lists for further communication concerning the UE disaster should other options arise.  I just rec'd notice from a JT email that results should be out on the vote by end of business tomorrow.




We're putting a group together and will add you.

I don't think any of us need to await Jim's "official results" to know what the outcome was.  The real question is, what are we going to do now?


----------



## Desties

For those who haven't checked their email in the past hour, JT sent out a note that an update on the poll results will go out to members tomorrow after the close of business.


----------



## Northof49

Hard to say as being a Canadian member has always presented different challenges.  We felt even more isolated than most PE/UE members just because of where we are so to even have other member contacts up here is minimal.  I do have a couple others who would probably like to join up for the information once the official word drops from UE.  Depending on what CS does and how the majority votes will tell the membership their options.  Until then anyone planning travel with UE in short term is rolling the dice.


----------



## BestHC

ClubsRDead said:


> We're putting a group together and will add you.
> 
> I don't think any of us need to await Jim's "official results" to know what the outcome was.  The real question is, what are we going to do now?



Your running a little late with this idea....the hyenia's have devoured most of the carcus


----------



## dfr

I would also like to be included if you put a group together.  I'm glad I put off making my airline reservations for Christmas travel.


----------



## ClubsRDead

*UE PE Member Options Email*

Not that we may have many, but the email to send your contact info to is
UEMemberOptions@gmail.com.

This is a confidential list - we're going to attempt to verify those asking to be included are actually UE / UR / PE / TH (prior) members.  

Send an email and we'll continue the discussions more offline and then via conference calls as necessary.

Also, let others you know that this exists.  We had a pretty viable list during our TH days and a few are working to resurrect that right now.


----------



## Desties

dfr said:


> I'm glad I put off making my airline reservations for Christmas travel.



I suddenly feel like a winner for coming up short in the holiday lottery!

I do have Thanksgiving, though -- with the flight already booked. Thankfully it's NYC where there are plenty of options.


----------



## ClubsRDead

BestHC said:


> Your running a little late with this idea....the hyenia's have devoured most of the carcus




I don't think it's over until it's over....and there pretty much has to be a bankruptcy of some sort to eliminate the debts, member bonds, JTs employment contracts, etc.  Hard to imagine how any club wants to take on the liabilities, it would be cheaper to start from scratch.  If they don't stick it into bankruptcy soon then I would definitely be worried - because it doesn't appear they're paying bills or answering the phones right now.


----------



## BestHC

ClubsRDead said:


> I don't think it's over until it's over....and there pretty much has to be a bankruptcy of some sort to eliminate the debts, member bonds, JTs employment contracts, etc.  Hard to imagine how any club wants to take on the liabilities, it would be cheaper to start from scratch.  If they don't stick it into bankruptcy soon then I would definitely be worried - because it doesn't appear they're paying bills or answering the phones right now.



My suggestion to you is to start quickly with a law firm who has a great deal of familiarity with the DC industry.  At least some of the preliminary leg work will have been done in the past saving you guys some valuable time and dollars


----------



## willmyclubmakeit

*no more attorneys*

I don't think we need more attorneys yet.  We have enough people trying to get a piece of the pot but things could change if we get the short shaft as part of some deal.  I would hope the equity holders don't get anything before we do.


----------



## EOD

BestHC said:


> My suggestion to you is to start quickly with a law firm who has a great deal of familiarity with the DC industry.  At least some of the preliminary leg work will have been done in the past saving you guys some valuable time and dollars



I simply went to cases filed in the past to find a lawyer with experience in the industry. That said, I would think a good bankruptcy firm is probably more important given what seems to be transpiring.   However, given history of DC's to date that have failed, probably that is money wasted.  better to just walk away...


----------



## BestHC

EOD said:


> I simply went to cases filed in the past to find a lawyer with experience in the industry. That said, I would think a good bankruptcy firm is probably more important given what seems to be transpiring.   However, given history of DC's to date that have failed, probably that is money wasted.  better to just walk away...



I couldn't agree less with you guys...but hey  you have skin in the game and it's your decision to make


----------



## Jack1234

If one of the attorneys here could clarify that would be great...
Am I correct to think that if Cap is in a first position and they can't come out whole a member who paid a deposit would receive nothing?  I just don't see how it could make sense to litigate if there is nothing to win.  I believe I am just an unsecured creditor in a BK and could collect zip unless the secured folks are paid (and I think we all can agree they can't be made whole).

Please correct me if I am missing the idea here.  Thanks!


----------



## EOD

BestHC said:


> I couldn't agree less with you guys...but hey  you have skin in the game and it's your decision to make



I don't have skin in this game thankfully, but I suppose you are right having counsel to represent the whole group is not much as a distributed cost and clearly can't hurt to have someone protecting whatever there is to save and speaking for the group with other clubs, etc.   So i take it back, you are right, at small cost per member it is probably money better spent than buying ULEI stock at 3.97....


----------



## willmyclubmakeit

*not an attorney*

I am NOT an attorney but a very good transaction attorney who looked at joining UE and joined ER diagrammed the legal structure for me a couple of years ago.  Jack I think you have it right in a liquidation or a preference viewpoint (we have the first interest from our RAP after the mortgage holders if my memory is correct).   If Cap Source is under water on its mortgagee there is nothing left of that value but there maybe also value in other properties which they are not a mortgagee.  I presume they are cross-collateralized on all UE assets including the membership and other intangibles but don't know for sure.

Also there is the business issues that if someone were to bid on the entity I would not be surprised that the court may consider other interests even if unsecured like the members that have paid their annual dues and the deposit/RAP liabilities (again in a non-liquidation viewpoint).   I hope I'm wrong that a court would not allow equity players to get funding before we would get such therefore in the sale of assets.   Attorneys and restructuring advisers please comment.


----------



## Jack1234

Good point.  I forgot that Cap is not first mortgagee on all props but unfortunately I think you are correct that if they are at all careful would have cross-collateralized with all assets of company effectively leaving zip for all other creditors in this situation.  Have to wonder why they haven't filed yet...maybe waiting for JT to finish counting all those vital non-binding votes....


----------



## AKTHUE

Jack1234 said:


> Good point.  I forgot that Cap is not first mortgagee on all props but unfortunately I think you are correct that if they are at all careful would have cross-collateralized with all assets of company effectively leaving zip for all other creditors in this situation.  Have to wonder why they haven't filed yet...maybe waiting for JT to finish counting all those vital non-binding votes....



I imagine this BK could be complicated and an attorney might want a $500K retainer. 

I would think there is a non-BK way for CapSource to foreclose on the homes. 

This thing may go into some kind of receivership without a BK, because I doubt there's anyone who stands enough to gain to fund the BK process.


----------



## ClubsRDead

Jack1234 said:


> If one of the attorneys here could clarify that would be great...
> Am I correct to think that if Cap is in a first position and they can't come out whole a member who paid a deposit would receive nothing?



I think this is the problem that we all see - the priority debt of Cap Source.  It presumably has been one of the key problems that JT has had raising money.  Well, that and his predominantly devious approach to clearly telling us the facts.

Doesn't appear that any sane person will bid on this unless they can get a real deal on the assets as a whole.  There is no protection for a private investor in this deal.


----------



## BestHC

willmyclubmakeit said:


> I am NOT an attorney but a very good transaction attorney who looked at joining UE and joined ER diagrammed the legal structure for me a couple of years ago.  Jack I think you have it right in a liquidation or a preference viewpoint (we have the first interest from our RAP after the mortgage holders if my memory is correct).   If Cap Source is under water on its mortgagee there is nothing left of that value but there maybe also value in other properties which they are not a mortgagee.  I presume they are cross-collateralized on all UE assets including the membership and other intangibles but don't know for sure.
> 
> Also there is the business issues that if someone were to bid on the entity I would not be surprised that the court may consider other interests even if unsecured like the members that have paid their annual dues and the deposit/RAP liabilities (again in a non-liquidation viewpoint).   I hope I'm wrong that a court would not allow equity players to get funding before we would get such therefore in the sale of assets.   Attorneys and restructuring advisers please comment.



There is a line of secured creditors before members and equity holders would be considered for renumeration.  It's never too late to be a secured creditor


----------



## DestiFan

BestHC said:


> There is a line of secured creditors before members and equity holders would be considered for renumeration.  It's never too late to be a secured creditor



Guys, no money will come to members in liquidation outside of those that are owed money from lawsuits previously settled...and even that may not get covered.  Remember there are employee salaries, HOA fees, and many other payables that will be Senior in claim as well in liquidation preference.  One genius thing, if I remember correctly (someone can check the latest Q or K) is that UE paid off Keredike LLC - which was a management controlled lender at some point over the past year according to the filing.  Now, Rich and others may have taken stock or just forgiven, but I remember reading something about that paper getting resolved.


----------



## Leonardo

BestHC said:


> It's never too late to be a secured creditor



Can you elaborate?  How do you convert unsecured debt to secured?


----------



## willmyclubmakeit

*secured creditors*

are you suggesting we file a lien/lawsuit to get such?  do you think there is much value after the mortgage holders?   isn't this the #1 reason to use BK to clear these sort of actual and threatened liabilities and a post-bk investor therefore wouldn't have to worry about this (other than assuming there is no equity in the fresh start #s)?


----------



## ClubsRDead

willmyclubmakeit said:


> are you suggesting we file a lien/lawsuit to get such?  do you think there is much value after the mortgage holders?   isn't this the #1 reason to use BK to clear these sort of actual and threatened liabilities and a post-bk investor therefore wouldn't have to worry about this (other than assuming there is no equity in the fresh start #s)?



Let's remember folks, filing a lawsuit regarding anything is going to get wiped, or stayed in bankruptcy (depending on how they file, I suspect).  There's a large # of us who are part of the still pending suit over the THAK thing.  That has gone no where.  Additionally, during TH some people sued individuals personally (civil) for fraud and misrepresentation and I think all of those were stayed as well.  Now, we may have a different scenario here since UE is apparently insolvent right now, and I suspect JT is also.  Thus, if we sued him as a corporate officer there is probably no insurance in place for him to fall back on for legal fees or claims.  That being said, there's probably no recovery either - but it would make him uncomfortable.  We have to ask, what do we hope to accomplish by doing this?  I doubt I will be given a claim for my prior TH deposit that I haven't earned yet at UR / UE.  Even if they give me one it will be as worthless as the paper it is written on, just like my TH one was, ie there will be no recovery and no distributions to unsecured creditors.  Between what is owed to Cap Source and all the other mortgage holders, we will no doubt, again, be at the bottom of the bucket.  If any of us believe that they can sell everything, pay off all the misc vendor bills, not to mention the ridiculous lawyer and CRO fees that will accrue and there will be money left at the end of the day - there won't be.  The best alternative we have is to walk away with some form of member club even if we want to go forward.  In my mind, it will depend on what homes and at what debt level before I would even consider.  I suspect the vultures are lining up at the door right now and our "offers" should start soon.  I too have, on my own, talked to a few other clubs to see what incentives they might offer us - they are for the most part being tight lipped but some are more vocal than others.  I just want to keep the trips I have already paid for now ( I may have 2 of 4 that are "okay") and that doesn't even seem real probable since no one answers my calls this morning and my planner hasn't returned my emails.  Has anybody heard anything new?


----------



## BestHC

willmyclubmakeit said:


> are you suggesting we file a lien/lawsuit to get such?  do you think there is much value after the mortgage holders?   isn't this the #1 reason to use BK to clear these sort of actual and threatened liabilities and a post-bk investor therefore wouldn't have to worry about this (other than assuming there is no equity in the fresh start #s)?



I cannot and am not suggesting anything...I have no skin in this game and in all probability should be watching from the sidelines.  I will say doing nothing means getting nothing.  It's as simple as that...


----------



## Desties

ClubsRDead said:


> Has anybody heard anything new?



Nothing new -- but the same as you.

I put in a trip request yesterday (I had 13 available days yet unbooked, so I figured I may as well get something on the books in case a suitor comes in miraculously for continuance). 

I haven't heard back. We'll have to see what JT's update is this afternoon, but I'm not optimistic. They wouldn't be axing upcoming reservations (i.e. - the Tuscany case posted here -- but has anyone else been contacted about an upcoming trip) and not getting back to customers unless they couldn't care less about customer service at this point because they know that they won't be part of our future. 

Bid $0.56 and Ask $1.45 on the stock right now. That's an insane spread, but one would expect a lot of selling to drive down the bid if insiders knew that a bankruptcy filing was coming tonight. I still think that's the most likely scenario. If JT was in crisis mode last week, how about now? Dreams of a cash infusion of a Q or ER buyout as a way for THEM to go public and cash in on UE's tax loss carryforwards seem remote at best right now.


----------



## Desties

Bid $0.25 - Ask $0.75 -- after someone sold off a block of 2,500 shares at the old bid. This is NOT the stock chart I want to see, but I've done enough soul searching this month to accept the worst. 

As logical as it would seem for the suitor that's been in talks for 6 months to wait until a bankruptcy filing to make a move here, the industry's reputation is going in for a serious bruising.


----------



## willmyclubmakeit

*kc*

I understand the planners in KC that remain employees were recommended to stay home as the company may not have funding to pay them....I think we are all in a wait and see situation (and probably bad for us that they are not there to help us but good for them that they are not working for free and creating more litigation and planning for unknown trips at present doesn't help one much unless you are scheduled to leave soon).


----------



## DCTaken

*My bad dream*

I had a dream last night that I bought a really expensive cross country trip on a first class bus. I was excited to take my whole family, and when we got on board, it seemed strange that there weren’t more riders, but the finish of the bus was so nice and the scenery outside the window so pleasing, we just sat back and enjoyed the ride. The driver would come on the PA every now and again and comment on how fantastic the trip was and how the bus was the best cross country bus in the world. Frequently the bus would stop and someone would get on. All went well until we reached a toll plaza at the Mississippi and the driver told us that because he didn’t sell all the seats on the bus, they didn’t have enough for toll, and so if we really wanted to reach the destination, we would have to come out of pocket to cover the “one time” expense. That didn’t seem fair (you would have thought they would have sold enough tickets to pay for the trip before departing), but I had invested so much in the trip, I figured chipping in for tolls was better than getting off the bus. I even decided to pay the driver a bit more so I could move up to a better seat.

As we crossed the plains and entered the desert I noticed no new passengers were getting on, and the driver became less communicative. He popped on periodically to say if we had friends and relatives along the way, we should encourage them to spring for a ticket and get on the bus. As we neared the Grand Canyon the driver stopped talking all together. Several passengers pointed out that the canyon edge appeared very close and we seemed to be driving too fast. As we reached 50 feet from the canyon edge the driver rediscovered the PA and announced that he planned to begin applying the brakes (why not apply the brakes miles back???).

As the front wheels left the road and started into the canyon, the driver came on the intercom and announced that the bus was now in crisis mode, that we were about to plunge into the canyon, and that he wanted a quick vote on who would support the building of a bridge across the canyon. He didn’t have any plans for the bridge nor any firm idea what it would cost, but wanted us to indicate if we would support the principle of building the bridge. The specific plans for the bridge would be developed later and circulated to the passengers for formal approval, but it was extremely important that the passengers express support for the bridge project. Of course, the idea to build a bridge alone didn’t support the weight of a bus and it plunged into the abyss.

Then I woke up, ashamed of myself for not carefully diligencing the viability of the trip in the first place…


----------



## Northof49

*Bad dream*

Brilliant .  Too bad the passengers on the bus couldn't have all met years ago to develop a plan to hire new bus drivers as the trip as advertised was worth it.  The isolation of members by managment was definitely a power control tactic from the start to protect the Leadership team.  Even the voting of members for the advisory commitee for each club level added little to no value to members as far as getting real information was concerned.


----------



## ClubsRDead

Desties said:


> Bid $0.25 - Ask $0.75 -- after someone sold off a block of 2,500 shares at the old bid.



Maybe Jim needed lunch money.  Or the old forums guy decided to get his "pay" for his site.

The issue with our planners is disturbing.  I am preparing as if there will be no club going forward and trying to get alternate lodging arrangements.

Have we received the announcement yet which JT promised for COB today?  Maybe he meant PST?


----------



## wilkes591

DCTaken said:


> Then I woke up, ashamed of myself for not carefully diligencing the viability of the trip in the first place…



Should have, anyone could of seen this coming before the two year "merger" or after the assessment, or after that B.S. SPAC conversion, it still is playing out and 1200 fools with money have value.

I am 1 of the 1200 fouls! However, I saw this wreck coming after the assessment.


----------



## DestiFan

Northof49 said:


> Brilliant .  Too bad the passengers on the bus couldn't have all met years ago to develop a plan to hire new bus drivers as the trip as advertised was worth it.  The isolation of members by managment was definitely a power control tactic from the start to protect the Leadership team.  Even the voting of members for the advisory commitee for each club level added little to no value to members as far as getting real information was concerned.



I wish now, more than ever, that our efforts last year would have been successful.  Many members thought we were crazy for trying to enact change or to force management out.  I still wonder how many people even knew about our group of "rogue" members.


----------



## wilkes591

DestiFan said:


> Many members thought we were crazy for trying to enact change or to force management out.  I still wonder how many people even knew about our group of "rogue" members.



There was no realistic way of doing that then, Chapter 11 or 7 is the only way when the owners are management.


----------



## Northof49

We were only aware of about the '400 or so trouble makers' through the club reps.  The Club really tried to play both sides against each other in a blame game incase all went for not.  We already felt helpless after being herded through the PE / UR merger shortly after joining with no guidance or options from the Club.  From that point on I knew we were not in a good place or represented by people with our best interests at heart.  I wish we had been able to make contact back then as well.


----------



## PuntaEscape

*Its time!*

Well, by my watch it is 6:25 Eastern time.  I believe that that is at least an hour after close of business.  This group does not know what truth or respect mean.  Darn the trips were great however.  If it were me I would have sent a message at 5 stating more time was required.  Not these guys.  I have also asked a question about a Thanksgiving trip to Mexico.  Siimply asked if it was safe to order tickets, but i have also heard nothing.
Don't they say no news is good news.  Somehow I have a feel the COB news will be very good until you digest and realize we are right back where we were, send money and get 15 more free days.  JT are you awake.
JIM MUST GO.....


----------



## TarheelTraveler

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

DC News article on member group.


----------



## Kagehitokiri2

sorting through emails..

in email from X >


> [JT owns UE orlando office space (presumably getting rental income) at]
> 
> La Miranda Plaza
> 3501 West Vine Street, Kissimmee, FL‎ 34741
> 
> I am pretty sure Jim T owns all the land between W Vine Street and W Columbia Ave (site of the defunct movie theater) totaling 17 acres


unfortunately im not sure when ill get around to looking at assessor maps

in email from Y >


> UE bought out Sherpa


----------



## ClubsRDead

PuntaEscape said:


> Well, by my watch it is 6:25 Eastern time.  I believe that that is at least an hour after close of business.



Of course, Jim will now just tell us that you had to actually be open for business in order for their to be a "close of business" during the day...


----------



## golfisking

I have to say that some of you guys are REALLY funny.  Wish we all had a chance to meet in some productive manner.  At this point I am thinking that I would take a deal where I lose the deposit and become a dues paying member of another club that has an ounce of integrity.  Of course this statement is non-binding.


----------



## Desties

PuntaEscape said:


> Well, by my watch it is 6:25 Eastern time.  I believe that that is at least an hour after close of business.



Yep, they can't even say by close of business Fort Collins time anymore, so it's past COB in KC and Orlando. 

Obviously you should NOT buy your airline tickets at this point. It was posted earlier that the KC staff was told not to come in today (I also never got a response from a trip I tried to book yesterday). 

We may be in a better place in a few weeks or months, but it won't be under this mgmt party. The last of the bridges have been burned by cancelling upcoming vacations and shutting down customer service. 

I paid the assessment, without even batting a lash. This was around the same time that Q doubled its rates and ER was about to roughly double the rates for its earliest members (eventually modified to rise at a scaled rate). I understood the industry challenges, and how all three of the biggies were struggling to generate positive cash flow with referrals drying up and investors weren't subsidizing the losses as real estate prices were going down. 

However, this late push for solvency -- at the 11th hour instead of several months ago when payments were already falling behind -- is not indicative of the open management that I signed up for when I joined PE and the UE that I thought I was getting myself into. I hope JT can pull another rabbit out of the hat, but I'm not springing for the hat again.


----------



## wilkes591

golfisking said:


> a dues paying member of another club that has an ounce of integrity.



Which club is that? All of them just want your money. They will tell you anything.


----------



## golfisking

I'm wondering if anyone knows a member that is in a home right now and have they gotten any vacate calls, etc?


----------



## ClubsRDead

Wouldn't it have just been simpler if he had put another poll on the website...

1.  Do you want your money back right now   Y or N

2.  Do you want me to remain in control of the club  Y or N

3.  Would you like to continue with all reservations that you have on the books at this time?   Y   N

4.  Do you want to give me all of your money so I can continue to make bad decisions?  Y    N

5.  Did I sound genuine when I said I was willing to cut my $500k salary (which you pay) in half until we got profitable?

6.  Are you upset that I have a $2000/mo company leased vehicle and two (2) complimentary, "lifetime" and "due free" memberships - one in Signature, and one in Elite?   Y   N

6.  What is the average # of bankruptcies in a destination club that each of you have been through?   1   2   2 or more

Had JT cared about us our phones would have been answered the last couple days so at least we could have been told how screwed we are.  At TH all sorts of people called and at least gave the impression that they cared and were trying to work something out.  I only lost one booking and they found me an alternate.

At a minimum, before he sent the planners home he could have just had them impose our member information onto claim forms so we didn't have to hassle with that.  I suspect they have many of ours from the last time and could just change the case number.


----------



## Jack1234

Perhaps Jim is hiding out in one of the Hawaii homes...by his watch he still has 3 more hours.....

My guess is that he is trying to close something with someone and hoping he can pull yet another rabbit out of his hat.  That way he can send out a successful email.  I don't see it happening but we all know his methodology by now...


----------



## TarheelTraveler

Kagehitokiri2 said:


> sorting through emails..
> 
> in email from X >
> 
> unfortunately im not sure when ill get around to looking at assessor maps
> 
> in email from Y >



Was Y being sarcastic or was Y confused and thinking about UE's purchase of DC4MS?

How can a DC news site be objective if it's owned by a DC? 

I did notice that there is no longer DC advertising on there.  If the site was purchased by a DC, it would make sense that no other DC would pay to advertise on it.


----------



## ClubsRDead

*Email From JT - Note The CRO is Involved Now...*

Dear Members:

We sincerely want to thank you all for your swift response to the
Member POLL over the weekend. Nearly 1,000 Members participated, the
votes were tallied and the results were approximately 2:1 against the
conversion to a Member-owned Club on the terms proposed. The support
of our Members is critical for our business.

The Company continues to explore all alternatives, including ongoing
discussions with a number of parties regarding a potential
acquisition and we will keep you apprised of developments in the
forthcoming days. We are aware of the frustrations many of you have
experienced in the last couple of days in attempting to communicate
with the Company and also with regard to timely Member communications
and we are working hard to rectify this within the constraints of our
current situation. Thanks for your continued support and patience.

Warm regards,


Jim Tousignant          Sheon Karol
President & CEO         CRO


----------



## Jack1234

No surprise but notice the new signature... Now communications come from both JT & SK


----------



## PuntaEscape

*SEC*

Since we are a pubicly traded company, I thought that all material conditions were required to be communicated to share holders in a timely manner.  It would appear to me that defaulting on loan agreements in June was  material and therefore needed to be disclosed.  As a share holder have yet to even see the last 10K from the company much less in three months receive absolutely no notification of potential bankruptcy.  This is criminal.


----------



## PuntaEscape

*Misspelling*

Publicly traded company above.  I guess this was a freudian slip.


----------



## PuntaEscape

*No Confidence*

Why would anyone vote against a possible  option in a non-binding poll?  We effectively took the eguity option off the table.  I voted against.  Why? Because I have been lied to, told half truths and continue to be told that service is number one etc. etc. etc.  I have no confidence in the leadership of this club, they can't even calculate close of business.  24 hours to count 1000 votes, that is only 44 per hour, I guess it really was a lot of work.  Even Bernie Madoff kept the scam going for 10 years or so.  This is not really a vote against the equity option, it is a vote against Jim T and Rich, ( where is he) Keith.


----------



## Desties

Oddly enough, I hadn't seen the last missive. It turns out that it went into my Spam folder. I guess that should be telling me something.

As for 10-K and 10-Q filings, they are always available online:

http://ir.ultimateescapes.com/sec.cfm

Or through the SEC site itself.

Quarterly reports rarely -- if ever -- get mailed out. There may have not been an official annual report go out earlier this year since the company has just completed its deal to go public, but even then you wouldn't have read about any shortcomings back in April.

And I don't think it took this long to count the nay votes. Perhaps JT was buying time for a deal that failed to materialize (as of tonight). Either way, every day that he keeps the customer support center closed with folks in dissarray over immediate vacation plans, the longer the odds that the club can get back on its feet with present management. 

I'm considering myself lucky that I don't have another trip planned for another two months -- and then nothing until early next year. I seriously wonder what's going on with folks set to travel in the next week or two.


----------



## ClubsRDead

How come I never heard about the "rogue" group of 400 or so members?  I would have obviously joined.

I had forgotten about this little "gem" of a presentation they used to convert the company to a public offering.  It's a shame they blew so much of our cash on this transaction:

http://www.secureamericacorp.net/up...capes_Investor_Presentation-_FINAL_9_3_09.pdf

I guess when he put the show on the other night we were the "pentamillionaires" referred to herein.  However, my favorite slide is the last one, #40 - which states:

• Large destination clubs have been reasonably resilient through the global 
market downturn, due to strong member appeal, critical operational scale and affluent membership demographics 
– High-net-worth member base has continued to pay annual dues and maintain frequent travel plans despite a broader slow-down in business and leisure travel  (1st Quarter 2009 busiest quarter ever for volume of member travel) 
• Ultimate Escapes’ property values have held better than overall market-as 
evidenced by recent appraisals completed by the Company’s lender (CapitalSource) 
• Tremendous property acquisition opportunities in soft luxury real estate 
markets during 2009 and 2010 
– Successful transaction with Secure America will generate minimum of $20 
million of new capital at closing, and potentially raise additional $100+ million from future warrant conversion, which could be used to acquire “distressed” clubs and luxury real estate 
– The UltimateReciprocity Program capitalizes on excess current capacity 
without making new property acquisitions

If bullet #1 were true, we wouldn't be where we are.  If #2 were true, Cap Source wouldn't be where they are, and if #3 were true - we'd have some assets to travel to and wouldn't have had all of our reservations dumped because we're in leased homes having sold so many "owned homes."

But...life goes on, right?  Very impressive presentation JT and team, the "seasoned management team" sure pulled it off.


----------



## Kagehitokiri2

TarheelTraveler said:


> Was Y being sarcastic or was Y confused and thinking about UE's purchase of DC4MS?
> 
> How can a DC news site be objective if it's owned by a DC?
> 
> I did notice that there is no longer DC advertising on there.  If the site was purchased by a DC, it would make sense that no other DC would pay to advertise on it.


just thought id post, as usual no claims re veracity. but also no coverage of UE... pretty big news... even something ridiculously short. veras may be editorializing some (some of it simply being blunt like discussion here?) rather than just posting blurbs, but a bunch of them were PE guys.



ClubsRDead said:


> Nearly 1,000 Members participated, the votes were tallied and the results were approximately 2:1 against the conversion to a Member-owned Club on the terms proposed.


finally. awesome. nearly everyone voted, about 666 to 333.

i wonder if they really got as much as $5mm in march.


----------



## HereWeGoAgain

*The near term future.....*

A guess...

Filing Ch 11 this week or early next.  That eliminates some unsecured debt, the so-called redemption plan obligations (which were always funky accounting), and allows leases and other contracts to be terminated.

Capital Source provides some cash to keep things going for a (very) short time - sort of a DIP loan but with a short time horizon.

Travel continues for some, but cancellations occur - maybe worse than in T&H.

The CRO and CS pursue a few "options" with a primary focus on getting CS as much $$ as possible now (and here's the only hope for members) *or over time*.  Maybe CS would understand that the overhead in UE was the killer and there are alternate business models.  In any case, it seems likely CS has already reserved against this loan, don't you think???

If CS realizes the real estate is worth more in a functioning club rather than a fast liquidation, maybe they would take a haircut and allow a new operator to come into the game.

Here's where it gets interesting - despite the possibilities of other DCs having an interest, the highest value for CS might just be to work with the members to design an equity based club with a separate management company.  No JT or RK involvement, period.

The MOC ("member owned club") would require some new capital to pay down a bit of the CS loan, so who knows where that would come from - the members?? an investor??  a government bailout like GM??  (the last is a joke, btw..)

What form of a MOC would you support (if any) and would you commit new money (maybe $10,000 to $20,000 from 500 or folks to get some new cash into the business)???  Maybe a design with some folks putting in $$ and getting an ownership interest in the real estate (admittedly with a big mortgage) and others just paying dues might work if CS gets some $$ from a few property sales and takes a haircut on the balance.

The question is, would the members support such a deal?  So that's my question to the board....

Does a MOC make sense and would you support it??


----------



## Kagehitokiri2

cost of management company (and "their" cost running properties) is an issue.

although luxus and rocksure do have barebones models to examine.

seems to me it works great for Q to have lusso, UE, etc go bankrupt and then pick up at least some members if nothing else. they might simply be waiting for same thing with oyster. the whole UE/everlands deal looks ridiculous now. but again, Q could easily be looking at Q's long term best interest.


----------



## willmyclubmakeit

*UE calendar*

I had not looked at availability for a while and decided to take a look and noticed that several properties now show no availability (Both Silver Lake properties in Deer Valley, Bend, OR and others (of course I have reservations at the first two).  Does anyone know when these changes were made and if they are new?  Any insight?


----------



## TarheelTraveler

BestHC said:


> There is a line of secured creditors before members and equity holders would be considered for renumeration.  It's never too late to be a secured creditor



While I know that you can't confirm, I assume that you're one of the litigants with whom there is a settlement and certain property set aside for sale.  I remember seeing that in one of the filings.  I suspect that some folks at this point regret not joining you.


----------



## BestHC

TarheelTraveler said:


> While I know that you can't confirm, I assume that you're one of the litigants with whom there is a settlement and certain property set aside for sale.  I remember seeing that in one of the filings.  I suspect that some folks at this point regret not joining you.



Sometimes even the brightest individuals (which you all are) procrastinate just a little too long when some sort of action is indicated.  I'm sorry for those who will miss the boat (they blew the "BOARD" whistle for a long time) but not the slightest bit suprised by the ultimate outcome.


----------



## DestiFan

HereWeGoAgain said:


> A guess...
> 
> Filing Ch 11 this week or early next.  That eliminates some unsecured debt, the so-called redemption plan obligations (which were always funky accounting), and allows leases and other contracts to be terminated.
> 
> Capital Source provides some cash to keep things going for a (very) short time - sort of a DIP loan but with a short time horizon.
> 
> Travel continues for some, but cancellations occur - maybe worse than in T&H.
> 
> The CRO and CS pursue a few "options" with a primary focus on getting CS as much $$ as possible now (and here's the only hope for members) *or over time*.  Maybe CS would understand that the overhead in UE was the killer and there are alternate business models.  In any case, it seems likely CS has already reserved against this loan, don't you think???
> 
> If CS realizes the real estate is worth more in a functioning club rather than a fast liquidation, maybe they would take a haircut and allow a new operator to come into the game.
> 
> Here's where it gets interesting - despite the possibilities of other DCs having an interest, the highest value for CS might just be to work with the members to design an equity based club with a separate management company.  No JT or RK involvement, period.
> 
> The MOC ("member owned club") would require some new capital to pay down a bit of the CS loan, so who knows where that would come from - the members?? an investor??  a government bailout like GM??  (the last is a joke, btw..)
> 
> What form of a MOC would you support (if any) and would you commit new money (maybe $10,000 to $20,000 from 500 or folks to get some new cash into the business)???  Maybe a design with some folks putting in $$ and getting an ownership interest in the real estate (admittedly with a big mortgage) and others just paying dues might work if CS gets some $$ from a few property sales and takes a haircut on the balance.
> 
> The question is, would the members support such a deal?  So that's my question to the board....
> 
> Does a MOC make sense and would you support it??



I continue to think that smaller MOC's could exist, but not the way it is currently structured with 3 levels.  I will say again, and Kage said earlier, the management of lots of disparate homes is expensive.  In addition, the operating expense of some of these homes - Tuscany, NYC, etc. is outrageous.  Just wait to you see the numbers.  So, members won't want those homes - but CS will not want them either.  The most likely scenario is members partnering with another Club I think.  That way the overhead is leveraged and CS feels like there is a real operating Company.  EE and AKRC are most likely in MOC format.  I do not think Q will want real estate, and I know ER does not.

So, would I support one?  Only if structured correctly.  It is going to be a hard sell like I posted earlier.  Theoretically, members could join EE or AKRC for a slightly bigger check and have homes with little to no debt.  That will not be the case in a NewCo strategy.  That being said, I have been surprised many times in this process!


----------



## ClubsRDead

On the Silver Lake I would suspect that is due to, like the Trumps, Esperanza's, etc that the HOA dues and all weren't paid.  We should own those under the Cap Source loan because they were TH assets originally.  Bend is probably the same, non-payment but also not part of the CS loan being a PE asset.

Are the troops back to work today yet to answer these types of questions?


----------



## Analogue

PuntaEscape said:


> ... I have no confidence in the leadership of this club, they can't even calculate close of business. *24 hours* to count 1000 votes, that is only 44 per hour, I guess it really was a lot of work.  Even Bernie Madoff kept the scam going for 10 years or so.  This is not really a vote against the equity option, it is a vote against Jim T and Rich, ( where is he) Keith.



They got rid of their CFO last week according to Sherpareport http://www.sherpareport.com/destination-clubs/ultimate-escapes-restructuring.html. so maybe they need more time with the math


----------



## ClubsRDead

DestiFan said:


> ITheoretically, members could join EE or AKRC for a slightly bigger check and have homes with little to no debt.  That will not be the case in a NewCo strategy.



I don't, still, follow this logic.  How do we go to EE or AKRC (who took some of our money in the first place) and utilize their homes?  They don't have enough to accommodate, so they have to buy. Especially if a bunch of us went over. Buying either means more debt, or really big checks for us to write.  We're going to have to write a check most likely in any scenario, I'd think we first try to support our own membership and club and take advantage of the homes we have.  Just remover the boundaries between premier - signature - elite - corporate and let people pay for their own usage.  If there's more homes required and we're writing checks anyway we can always buy others.  Maybe some of those not part of the CS loan will go for cheap in the liquidation?


----------



## willmyclubmakeit

*not everyone is gone yet*



Analogue said:


> They got rid of their CFO last week according to Sherpareport http://www.sherpareport.com/destination-clubs/ultimate-escapes-restructuring.html. so maybe they need more time with the math



CFO is still at UE (or was earlier this week).  I spoke with him.  He is not th culprit from my experience.


----------



## DestiFan

ClubsRDead said:


> I don't, still, follow this logic.  How do we go to EE or AKRC (who took some of our money in the first place) and utilize their homes?  They don't have enough to accommodate, so they have to buy. Especially if a bunch of us went over. Buying either means more debt, or really big checks for us to write.  We're going to have to write a check most likely in any scenario, I'd think we first try to support our own membership and club and take advantage of the homes we have.  Just remover the boundaries between premier - signature - elite - corporate and let people pay for their own usage.  If there's more homes required and we're writing checks anyway we can always buy others.  Maybe some of those not part of the CS loan will go for cheap in the liquidation?



The logic is this .... there is over $100MM in claims out there at the minimum to Capital Source.  This is not counting trade payables, HOA fees owed, etc.  In a reorg scenario, all these guys are going to get in line.  Yes, some will take haircuts, but members on here assume we will dictate terms.  The debtors, mostly CS in this case, will be dictating the terms.  In a dream scenario for us, they agree to cut principal and accrued interest by 15%.  So we owe $85MM still on a portfolio probably worth around $100-$115MM.  Unfortunately, most of the value in the portfolio is on homes that have extraordinary operating expenses - Tuscany, NYC, Turks, Esperanza, etc.  

But let's put that aside - and say a group can get around 1/2 of current membership to come together and form a NewCo and buy the portfolio from CSE.  So approximately 600 members get together and say they will put new capital in to form a go forward Company.  

What is the check the 600 have to write?  Let's make it something palatable - $30,000 on average.  That leaves the NewCo with $67,000,000 of debt.  Let's assume that CSE is helpful again and allows the NewCo to pay interest only for the first year years at 8%.  The carry cost on the interest alone per year would be $5.4MM or around $9,000 per member.  

I have been told by various DC's, including UE, that the per night cost to run a home for a DC (utilities, housekeeping, general updates, etc.) is around $500.  Before you scoff at that, realize that housekeeping (the big cleanup before and after a member comes to a house) runs at least $250 by itself - usually more.  I am not sure how many homes NewCo has, but if it has 75 and members use the homes for an average of 175 days a year, the hard operating costs are around $6,562,500 (75x175x$500).  This is another $10,938 per member.  

Now, this does not count HOA fees, taxes and other mandatory expenses that are extremely high in a lot of these places.  Let's assume $20,000 per home - and I think that is too low b/c I know that NYC, Esperanza, Tuscany and many other homes have crazy high taxes and HOA association fees.  That is $1,500,000 or another $2,500 per person.  

There are still more expenses you need people to run NewCo, to do an audit, to do updated appraisals, to maintain and update the website, to do a preliminary and final K-1 every year, etc.  How much will that cost?  I don't know - but it's not cheap.  Someone can help me out with that number.

I have not included local hosts, shampoo, pre-stock, etc.  That is all extra.  Lastly, the big problem, Capital Source will want debt paydown (remember we assumed they and others already gifted $15MM or more in principal and payments) and they will probably want it soon.  If you straight line amortize it over 15 years - its $4,500,000 or an extra $7,500 per member per year.

Add it all up the cost per year will be more than $30K per member without management and accounting overhead plus $30K more into NewCo upfront - and I know I am undershooting a lot of expenses.  

Guys, we used to debate this on the old board all the time.  It took me awhile to see the light, but the killer of this model is debt.  A NewCo that has a significant amount of debt is still a bad investment for members IMHO.  

I am not sure about AKRC, but for similar money on a PV basis, I know one could join EE on a 1/2 membership and have better homes and almost no debt.  I did this math last year prior to joining. Don't get me wrong, I do not think a lot of people will sign up to do that either - b/c of the deposit required - but partnering with one of the other equity DC's would give NewCo a reduction in overhead and a better overall experience. 

Sorry for the long post.  Obviously, I am playing with complete funny money above - but I sincerely believe (from our research last year and new data from filings) that there is an outrageous amount of expenses that are unavoidable in the current portfolio construction - not counting the debt that comes with them.  

Totally open to being wrong here...but I went through this during the assessment process and myself, and others, thought the math was not great for NewCo.  Maybe things have changed....


----------



## DestiFan

willmyclubmakeit said:


> CFO is still at UE (or was earlier this week).  I spoke with him.  He is not th culprit from my experience.



Any CFO that allowed the numbers to be presented last year during assessment process and allowed go forward expense structure is definitely a culprit.


----------



## aisa

Been here before. I assume all deposits are lost and will start from that premise. Assuming 750-1000 potential members, you would think that some club could get enough commitments from members to pay into a new equity club with a low membership fee to make a bid. I might consider a 100k investment if it meant no debt from the start.......800 members at 100k would get us close.

Members at this level of dues are very expensive for clubs to accumulate. Has to be worth something.......

Just a thought.......


----------



## TarheelTraveler

I'll reiterate DestiFan's comments.  Having now been privvy to the financials for several DCs, I can attest that it is very expensive to run a DC, and most of the costs are not capable of being reduced (property taxes, insurance, HOA fees, maintenance, etc.).  Sure, you can cut staffing, but only so much before the service and maintenance suffers.  I would think a larger DC would have some advantages in that regard though, as long as they were kept lean enough.

Most of the people that I've talked to in the industry say that you need at least $800-$1,100 per night ($3M level) to break even from an operational standpoint without new sales, with the big variable being the debt that the club has.  Sales and debt in the past heavily subsidized operations, and when those went away (i.e., no sales and credit was unobtainable), the structure (pyramid like in some cases) crumbled.

What amazes me is that the management of DCs have always known what it costs to run a club, yet the competitive landscape, particularly among the non-equity DCs, was to bring in new members at all costs, even if completely unsustainable without ever increasing sales in order to pay for past sins.

I have no idea what will happen with UE.  Given that most members will not pay a deposit, I wouldn't be surprised if members get another offer unsustainable in the long-run.  I understand the perspective of not wanting to pay another deposit though.  Hopefully, a plan can be crafted that will provide more stability, smaller deposits deposited into a member entity, but not necessarily full deposits.


----------



## HereWeGoAgain

DestiFan said:


> The logic is this .... there is over $100MM in claims out there at the minimum to Capital Source.  This is not counting trade payables, HOA fees owed, etc.  In a reorg scenario, all these guys are going to get in line.  Yes, some will take haircuts, but members on here assume we will dictate terms.  The debtors, mostly CS in this case, will be dictating the terms.  In a dream scenario for us, they agree to cut principal and accrued interest by 15%.  So we owe $85MM still on a portfolio probably worth around $100-$115MM.  Unfortunately, most of the value in the portfolio is on homes that have extraordinary operating expenses - Tuscany, NYC, Turks, Esperanza, etc.



Agreed re the operating costs - they are high.  Of course, I seem to spend and spend and spend on the place I call "home" as well, so no real surprise there I guess... 

The key would therefore be to sell off a few of the higher cost homes and focus on ones with high usage but better cost structures.  If there are 70-80 homes in the CS portfolio (does anyone know the exact number - or better, have a list?), maybe it shrinks a bit - but that's OK.  The non-CS homes I have no idea about (number, loans, much of anything really), so I simply disregard them for now.

And, as a former commercial banker, I can assure you that CS has already reserved against this loan given the missed payments and all.  How much, I have no idea, but I wouldn't be surprised if it is more than your 15%, so there may be room for more of a reduction than that in a MOC reorg, especially if they get some cash from a few sales and maybe from new deposits or an investor.  The question is, does CS want whatever it can get now in a hurry, or is it willing to be patient and try to get more back over time?

I called KC today - 50% of them are gone for good they say and the rest basically know nothing...not even if reservations next week will be honored..amazing..!!   

This continues to be a saga of no information - which does differ from the T&H bankruptcy as I recall.


----------



## Kagehitokiri2

TarheelTraveler said:


> While I know that you can't confirm, I assume that you're one of the litigants with whom there is a *settlement and certain property set aside for sale*.  I remember seeing that in one of the filings.  I suspect that some folks at this point regret not joining you.



smart indeed. wow. thanks for posting, as i must have forgotten about that, or missed it. 



DestiFan said:


> EE or AKRC for a slightly bigger check and have homes with little to no debt.



EE has huge debt cap. same with m private residences. AK is 5% ("backup") and luxus/rocksure (barebones) have no debt. hideaways i dont know.



TarheelTraveler said:


> Most of the people that I've talked to in the industry say that you need at least $800-$1,100 per night ($3M level) to break even from an operational standpoint without new sales, with the big variable being the debt that the club has.  Sales and debt in the past heavily subsidized operations, and when those went away (i.e., no sales and credit was unobtainable), the structure (pyramid like in some cases) crumbled.


any discussion of how that scales above $3MM? (*SciFrog* and i being interested in higher end, although im not in market at this exact moment.)


----------



## wilkes591

BestHC said:


> Sometimes even the brightest individuals (which you all are) procrastinate just a little too long when some sort of action is indicated.  I'm sorry for those who will miss the boat (they blew the "BOARD" whistle for a long time) but not the slightest bit suprised by the ultimate outcome.



You are getting pennies for dollars. Not everyone, paid huge deposits to join the club as you will see in the filing. So some decisions are based on different circumstances then yours.


----------



## aisa

Seems to me that the only long term solution has to remove most if not all the debt.  The problem, repeatably for these clubs that fail, is that they are under capitalized from the get go. The first few homes, needed to be funded by the owners of the business.

That being said, member deposits are surely gone.  Many members, myself included, didn't even put up large deposits when UE took over T&H. The only numbers that I can seem to get to work include a substantially discounted. but still real new deposit from members that still want to travel.

Some sort of appreciation share down the road may be a possibility, but a long shot. Doesn't really matter to me at this point. The money is gone, but would like to find a way to still travel.


----------



## PuntaEscape

*UE is working*

Just got a bill from a trip last week.  They have not answered my e-mails but they at least got the bill out.


----------



## ClubsRDead

PuntaEscape said:


> Just got a bill from a trip last week.  They have not answered my e-mails but they at least got the bill out.



I can only imagine what a hurry you are in to pay that, right?


----------



## Baily

Hey...before you pay that bill, you could always pay it to me, since I'm still on the resignation list awaiting my large deposit. Ha ha.


----------



## Baily

We absolutely would have joined the legal fight with the rest of the members who did, except that our situation was different and we were not able to join because of that.  There was never, ever a question in our minds that the only way out was legally.  Then, and now.  And obviously, now there really is not a way out that will be satisfactory.  Reading the posts here, I wonder how many people are going to leave UE, and never go back to a DC.  Not everyone wants to fork out more money, whether you have it or not.


----------



## Kagehitokiri2

http://webcache.googleusercontent.c...rlands&cd=9&hl=en&ct=clnk&gl=us&client=safari

interesting


----------



## wilkes591

Baily said:


> We absolutely would have joined the legal fight with the rest of the members who did, except that our situation was different and we were not able to join because of that.



The legal outcome was posted many moons ago. I guess that was his "BIG NEWS", If I recall from the old forum, BestHC had health issues and could not travel anymore, at least he got part of their money back. Good for them!

What is the benefit of coming around now and posting? Perhaps he does not realize the majority of UE members did not post large deposits and basically travel for dues only. I think the reason and what he is posting is obvious from the post. Some people like to throw salt in wounds or gasoline on a fire. Others just think they are smarter then everyone else, with out realizing the facts. Evryone has reason for posting here and they are not very hard to figure out.

Anyway, who cares. I do not. Great for him, I hope he is happy. My only interest is the outcome of my planned vacations coming up and achieving that with the least amount of out of pocket money to me and the most enjoyment. 

If there is any information in regards to that, I thank you for the Info and help!

Best of luck to ALL!


----------



## Kagehitokiri2

you go offtopic a lot about people being offtopic.


----------



## Desties

ClubsRDead said:


> The Company continues to explore all alternatives, including ongoing discussions with a number of parties regarding a potential acquisition and we will keep you apprised of developments in the
> forthcoming days.



This flew past me last night, but what do you all think JT means by _a number_ of parties? Is it really just Quintess or ER -- and JT is trying to get them to close the deal by making them believe that there are rival bidders -- or is there really the potential for a Disney or Marriott to be considering this as an easy way to become the second largest company in this space. I mean, we're the Murphy Bed of membership bases for an upstart (i.e. - built in). 

Once again, another day with no bankruptcy filing so what's up?


----------



## Kagehitokiri2

i hear from good source that in addition to Q and ER there is one other DC, and one other company.

i still think Q may have broken off negotiations to try and speed up bankruptcy and then pick up pieces.

ER surprises me. but if theyre not breakeven until end of phased dues increases... they certainly have scale to absorb.

the other DC and company im quite curious about what their proposals are. 

whatever happens is going to be interesting and revealing.


----------



## ClubsRDead

Kagehitokiri2 said:


> i hear from good source that in addition to Q and ER there is one other DC, and one other company.



Don't tease us KAGE, what do you know?  

Assume the "other DC" is AKRC.  Who is the "company?"  

Heard something about a time share operation of some sort kicking the tires, and also a private group of investors, bankers, members who are working on negotiating the debt (and membership) from Cap Source.  Heard their proposal was actually the "most attractive" but like everyone else, they want to wait for the BK so all the stuff can be dealt with.  No one will want to bite the debt apple on this mess.


----------



## Torn and Frayed

BestHC said:


> Sometimes even the brightest individuals (which you all are) procrastinate just a little too long when some sort of action is indicated.  I'm sorry for those who will miss the boat (they blew the "BOARD" whistle for a long time) but not the slightest bit suprised by the ultimate outcome.



As an old poster from the former independent forum, I believe that it would be in everyone's best interests (including that of BestHCs'-are you listening?) if BestHC  cultivated another hobby other than wasting his time posting on this forum.  Hey, but what the heck do I know?


----------



## Kagehitokiri2

no comment.

what would AK/m/ee/hideaways propose, as equity..? very curious.

interesting EE lonestar is $1.5mm>$2.5mm (m/hideaways) and 8-10 properties with 50 full memberships (rocksure's first 2 funds)
(although they list 12 targeted destinations)
clearly biggest question is how reciprocity works.

do we really need the personal stuff?


----------



## acheson

*ultimate*

i have been out of the country...what is the latest regarding the member vote?


----------



## Kagehitokiri2

acheson said:


> i have been out of the country...what is the latest regarding the member vote?


this? 


Kagehitokiri2 said:


> ClubsRDead said:
> 
> 
> 
> Nearly 1,000 Members participated, the votes were tallied and the results were approximately 2:1 against the conversion to a Member-owned Club on the terms proposed.
> 
> 
> 
> 
> finally. awesome. nearly everyone voted, about 666 to 333.
Click to expand...

there hasnt been another vote has there?


----------



## Desties

ClubsRDead said:


> but like everyone else, they want to wait for the BK so all the stuff can be dealt with.  No one will want to bite the debt apple on this mess.



One of the reasons why I thought this would be attractive to an acquirer before Chapter 11 is the tax loss carryforwards. As of Q2, there was an accumulated deficit of $81.6 million. That's $30-35 million in value right there for a company that can see the club eventually turning a profit under THEIR watch. I thought -- and hopefully a tax expert here can clear it up -- that a bankruptcy reorganization would wipe that away.


----------



## Kagehitokiri2

would that be part of why ER might be interested?


----------



## BestHC

wilkes591 said:


> You are getting pennies for dollars. Not everyone, paid huge deposits to join the club as you will see in the filing. So some decisions are based on different circumstances then yours.



Would love to address this falacy....will at another time


----------



## BestHC

wilkes591 said:


> The legal outcome was posted many moons ago. I guess that was his "BIG NEWS", If I recall from the old forum, BestHC had health issues and could not travel anymore, at least he got part of their money back. Good for them!
> 
> What is the benefit of coming around now and posting? Perhaps he does not realize the majority of UE members did not post large deposits and basically travel for dues only. I think the reason and what he is posting is obvious from the post. Some people like to throw salt in wounds or gasoline on a fire. Others just think they are smarter then everyone else, with out realizing the facts. Evryone has reason for posting here and they are not very hard to figure out.
> 
> Anyway, who cares. I do not. Great for him, I hope he is happy. My only interest is the outcome of my planned vacations coming up and achieving that with the least amount of out of pocket money to me and the most enjoyment.
> 
> If there is any information in regards to that, I thank you for the Info and help!
> 
> Best of luck to ALL!



LOL   Health issues.....share your stash


----------



## BestHC

Torn and Frayed said:


> As an old poster from the former independent forum, I believe that it would be in everyone's best interests (including that of BestHCs'-are you listening?) if BestHC  cultivated another hobby other than wasting his time posting on this forum.  Hey, but what the heck do I know?



Yah  Yah  you made your point......OK I'll stop but these people deserve....


----------



## wilkes591

BestHC said:


> Yah  Yah  you made your point......OK I'll stop but these people deserve....



See Kage, was right on target.


----------



## Kagehitokiri2

wilkes591 said:


> See Kage, was right on target.



pot. kettle. black.


----------



## HereWeGoAgain

*www.ultimatemembers.org*

I understand that this web site is now active.

*www.ultimatemembers.org*

This is a web site that has been used twice previously (during the T&H bankruptcy and the assessment process) for members (and, one assumes, others) to communicate.

It is certainly NOT at all a "commercial enterprise", as the originator simply pays the very modest costs himself and has the tech background to make it work.

If it is OK to post here the email address of a group of UE members trying to get organized, I certainly would assume it is OK to post this URL.  I also would hope that the moderator here at TUG will understand that the UE members, many from T&H and once again about to lose $$$ millions in dues and deposits, would like to have a place to communicate on many topics.  

Please leave this info available here so others can find it.


----------



## Desties

Kagehitokiri2 said:


> i hear from good source that in addition to Q and ER there is one other DC, and one other company.



That's awesome news, if true. I think the best thing would be a non-DC buyer. With a capital infusion, new management, realistic cost structure, and perhaps even a new brand, UE can work. 

ER's name is obviously interesting. Maybe Case is eyeing this as a way to go public by acquiring a smaller public shell of a club. This happened a couple of years ago when NYSE Group combined with publicly traded Archipelago to go public (and NYSE got most of the stock).

Either way, the more interested parties the better for us, regardless if something gets done pre or post bankruptcy.


----------



## ClubsRDead

Q made an offer today to the members - or most of them.  Collecting the details, my email just arrived...


----------



## Desties

There's nothing from Q in my inbox. 

It may have gone out to only Elite or maybe T&H members, but as a PE Legacy Signature, my inbox and Spam inbox didn't catch it. 

Is the offering being done in cahoots with UE, like when Q would pay Lusso for everybody who signed up if a certain amount did? Didn't that offer go out AFTER the bankruptcy filing. I find it odd that UE would do this when there are still, reportedly, other interested parties out there.


----------



## willmyclubmakeit

*Q offer*

given some questions/comments i received from UE including requesting a copy which I declined to send to them I'm pretty sure they were not involved or authorizing this....I suspect someone has a member list but maybe it was incomplete (or only people that converted or something).   I have no idea but I know I'm signature and received it and I know other signature members also received it and also Elite members that came over from PE.  Do you feel left out Desties?


----------



## AKTHUE

willmyclubmakeit said:


> given some questions/comments i received from UE



Is UE monitoring this forum?


----------



## Desties

willmyclubmakeit said:


> Do you feel left out Desties?



If Q is still demanding that folks on the resignation list for years continue to pay the escalating dues, it's not going to sway me one bit -- though I hate being the last kid picked in the sandlot.


----------



## willmyclubmakeit

*not private*

Heck yes people at UE and people that used to be at UE and probably others that are making or considering offers are monitoring this.   This is NOT private but a public bulletin board and I personally have received responses from many at UE and former UE "employees" about postings so they are surely reading this stuff.


----------



## ClubsRDead

willmyclubmakeit said:


> Do you feel left out Desties?



I don't know if UE approved it or not, but somehow Q got our names, info, club levels, etc.  Don't feel left out.

If anyone just wants to send me $50k, I promise I will in 5 years give you back all sorts of money based on figures and dollars that I don't have at some arbitrary percentage.  Isn't this how a good portion of us got into this problem in the first place - paying to prop up an unsupportable deal?

Just drop your money off behind the brick building tonight after sundown...


----------



## ClubsRDead

Now the company sends out an email saying they didn't have any knowledge of the offer.


----------



## TarheelTraveler

Isn't this a pretty strong indication that Q was the suitor that had been negotiating with UE for six months, went through the due diligence process with, etc. as discussed in the filings?  I assume that they would have access to all of that member information in that case.  However, assuming good counsel, you'd think the NDA paperwork would also prevent them from using proprietary information to their benefit.

As I speculated previously, it also may explain why UE was not making the most significant cost cuts until immediately before the "crisis" (presumably because they thought they had a deal).

Do fill us in on the offer, crd or wmcmi?  I'd be curious if it's similar to the Lusso offer.  Also, would be curious what EOD and Scifrog think?


----------



## AKTHUE

TarheelTraveler said:


> Isn't this a pretty strong indication that Q was the suitor that had been negotiating with UE for six months, went through the due diligence process with, etc. as discussed in the filings?  I assume that they would have access to all of that member information in that case.  However, assuming good counsel, you'd think the NDA paperwork would also prevent them from using proprietary information to their benefit.
> 
> As I speculated previously, it also may explain why UE was not making the most significant cost cuts until immediately before the "crisis" (presumably because they thought they had a deal).



And then JT overplayed his hand, wanting an employment contract and assumption of his loan?


----------



## aisa

I doubt JT is involved with the offer. Just doesn't seem to fix enough of his issues....I would love to count him out, but this guy has more lives then a cat...


----------



## UEgly

AKTHUE said:


> Is UE monitoring this forum?



*Within hours *of exposing their purchase of DC4Ms, the DC4Ms site was completely down, no longer pretending to be down temporarily for improvements (as the landing page message read for, what, 8 months?).  I'm not surprised they are keeping close tabs of this forum now, but that was before the sh**storm over the last 7 days.  So I'd guess that they spend an inordinate amount of time monitoring what is said, and maybe even by whom... 

With that in mind, I'd just like to say that I think JT is a standup, straight-dealing, selfless man with the scruples of a nun.  Honest as the come.  Really.


----------



## aisa

Best laugh I had all week.Thank you.  Surprised you could type AND pull the knife out of your back at the same time. Very talented I must say.


----------



## PuntaEscape

UEgly said:


> *Within hours *of exposing their purchase of DC4Ms, the DC4Ms site was completely down, no longer pretending to be down temporarily for improvements (as the landing page message read for, what, 8 months?).  I'm not surprised they are keeping close tabs of this forum now, but that was before the sh**storm over the last 7 days.  So I'd guess that they spend an inordinate amount of time monitoring what is said, and maybe even by whom...
> 
> With that in mind, I'd just like to say that I think JT is a standup, straight-dealing, selfless man with the scruples of a nun.  Honest as the come.  Really.



I agree about the nun part, however I think he is wearing the habit backwards, that is why he is reality challenged.


----------



## TarheelTraveler

Anybody watching the UE stock? $.15/share, down another 40% today.

http://www.marketwatch.com/investing/stock/ULEI

Marketwatch says the market capitalization is less than a deposit probably put up by some members.  That can't be right, can it?  It is a little insulting that the proposal was for members to buy shares at almost $4/share given the market valuation and the fact that they've put up the bulk of the capital already between deposits, assessments, share purchases, etc.


----------



## Kagehitokiri2

Desties said:


> Tcapital infusion, new management, realistic cost structure



the company i heard isnt really along those lines.


----------



## TarheelTraveler

*Quintess Offer to UE Members*

http://www.destinationclubnews.com/...s_Not_Authorize_Quintess_Offer_To_Members.php

"Dear Members: 

You may have recently received an offer to join another destination club. You should be aware that this offer and communication was NOT authorized by Ultimate Escapes, and also that the Company continues active discussions with a number of interested parties regarding a potential transaction. We will keep you apprised of developments in the forthcoming days. Until that time, the Company recommends you take NO action regarding ANY offer you may receive. 

In addition, the Company is actively working with our lender to provide our Members with greater clarity ASAP regarding existing member reservations, particularly those reservations previously booked for arrival over the next 30 days, and we expect to be able to update Members no later than Monday, September 20th regarding all existing reservations, including existing reservations in both owned and leased homes. We apologize for any inconvenience and we greatly appreciate your patience in this matter. 

Warm regards 

Jim Tousignant, President & CEO
Sheon Karol, CRO..." 

"Earlier this morning, some Ultimate Escapes members received an offer from Quintess about an option to join their destination club by paying a "Transfer Fee" and annual dues. With Ultimate Escapes disavowing their association with such an offer, how Quintess came about the Ultimate Escapes member list and information is unknown, but there are some interesting details in the Quintess offer. For example, a "release of claims" document is required to be signed by members protecting Quintess from any actions or claims against Ultimate Escapes and those who received the Quintess proposal had customized plans specific to their Ultimate Escapes membership, indicating someone at Ultimate Escapes, CapitalSource, CRG Partners, or another party close to the situation was likely involved at some point. As Ultimate Escapes continues to work on other alternatives, we hope that this does not impact any of their dealings as they evaluate others offers currently on the table."

What do they mean by a "transfer fee?"  What is being transferred?  Is the transfer fee always 50K or does it vary depending on the type of membership?  Why the release of claims?  Without really knowing the details, it sounds a lot like the Lusso deal, which never made economic sense to me.


----------



## ClubsRDead

TarheelTraveler said:


> http://www.destinationclubnews.com/...s_Not_Authorize_Quintess_Offer_To_Members.php
> 
> What do they mean by a "transfer fee?"



It's short for "we don't have any money and need your funds to pay our debt and corporate structure."


----------



## OneMoreTime

ClubsRDead said:


> It's short for "we don't have any money and need your funds to pay our debt and corporate structure."



Amen brother, amen. Why should we use our money to help you buy us?


----------



## Desties

OneMoreTime said:


> Amen brother, amen. Why should we use our money to help you buy us?



The "transfer fee" is what's being offered to select UE members. It has nothing to do with a potential buyout. It's just trying to pluck away members, perhaps because Q's six months of negotiations with UE have proved to be fruitless. For Q's sake, I hope it didn't sign any NDAs with regard to accessing member info during the negotiations, because if UE didn't authorize the pilfering -- and Q is using customer-specific info based on their exact existing plans for personalized offers -- it's gonna be a catfight in the courtroom.

It doesn't seem like a very serious attempt, all the same. The dues proposed are outrageous (above and beyond the transfer fee) and the 4-in, 1-out policy -- for a club that has historically forced folks on the resignation to keep paying -- is a life sentence.  

I'm going to apprach the potential suitors the same way I approach picking up Scrabble tiles. . .

Please, anything but Q.


----------



## BetterClient

*I'm going to get flamed for this.....*

Hard to view what Q sent out today as anything other than a spoiler sort of an offer. We can't buy/steal your club, so we'll just try and upset everyone. 

What an offer! Holy smokes-give us money, and if enough other folks sign up too, we'll start leasing homes. Way too difficult for them to just wave us on the club they already have, with homes that are underutilized as is, right now. 

Really believe that a good workable solution has to be out there-if you look at the dues of $18MM, and consider that pre-interest expense the club was almost flat for the half (subtracting depreciation, amortization, & $1.4MM of new SGA YOY), a restructured club with new management can work. 

The debt is too high. (Duhh!) If the senior creditor lowers the interest rate from 12% to 6%, the member liabilities disappear or become equity along with all of the other subordinated debt, presto-chango, we'll have a solvent entity. The folks on the resignation list can have their choice of traveling again, or of getting paid 5% on the dollar. Sorry-that's just the way it is. 

Ok-flame away, now.....


----------



## SciFrog

Looks like Q is being creative without endangering their existing club. This is expected. Not sure what UE members were expecting, but seeing there is no more cash, unless you get the homes for free, money needs to come in one way or the other. Q home inventory is probably about adequate, no more underutilization FYI (unlike at Lusso time). So no cheap deal.


----------



## ClubsRDead

SciFrog said:


> Looks like Q is being creative without endangering their existing club. This is expected. Not sure what UE members were expecting, but seeing there is no more cash, unless you get the homes for free, money needs to come in one way or the other. Q home inventory is probably about adequate, no more underutilization FYI (unlike at Lusso time). So no cheap deal.



Let's define "creative"...

If you mean sending out an offer that UE claims was not authorized (okay, that part we all knowing is BS), then that is one thing.

But there is nothing "creative" about charging over market price dues, in addition to a one time "fee" which is equivalent to about the dues.  So an average member has an "in" price of about $50k, first year.

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.  Presumably that would go towards adding assets, which one suspect would be carved out someone from the existing Cap Source loan.  Or, maybe not.  But you have to imagine that CS would do something here, as they have yet to foreclose or exercise their rights under the expiration of the forbearance agreement.

Needless to say, while I don't think most members expect anything to be free anymore, I do think we have to look at the economics.

What if 500, or even 700 members internally gave $50k....huge debt reduction, if that were the place it would all go.  Our confidence in senior management is gone, their ability to make good decisions is lacking and more importantly, they tell us nothing - communication sucks, at best.  So, no -- nobody will give Jim T a dime and the "vote" demonstrated that.

The fallacy in the whole process is that UE is selling the company.  There is no "selling" of it if we members have to pay the purchase price.

Odder, the redemption offer that Q offered makes no more sense than the one that JT offered to everyone who joined UR at the TH demise.  How can anyone promise an outrageous return on a member deposit they have never received?  It's like we're just passing our member bonds from one company to another - first TH, AK, then UR, then UE -- and on to Q?  It's pretty evident that no one can, wants to, will, or will even be able to pay these liabilities.  So quit saying you will as an inducement.  It's all BS, smoke and mirrors, and totally unsustainable.  We may be dumb for having done something a little crazy more than once, but I'd like to think that most are fairly sophisticated and able to do the math.

This time I think we're all just moving on....and I think we should.  There is no reason members should accept ANY of the BS deals on the table, or that will come.  Not initially.  If we take our time and evaluate all options, yes we may lose some travel for a bit -- most already are.  But, we might be able to create something better than what we are being presented with.  And, we may even get the lenders involved to loosen up a little.

Maybe not...


----------



## SciFrog

You seem to forget the offer on the table is totally independent of UE probable bankruptcy, it is just a way for Q to add members with realistic price for both the club and ex UE members. As for member redemption, it is paid with the 4 in 1 out clause. 

The key for UE is capsource, they are the senior debtholder. They will not accept any reduction of face value if the current homes are worth about the same as their loan. What amazes me is that the management would let reservations being canceled and let go of their employees while trying to save the company. They must have known this would happen months ago. What have they done to postpone it?


----------



## TarheelTraveler

ClubsRDead said:


> Let's define "creative"...
> 
> 
> Odder, the redemption offer that Q offered makes no more sense than the one that JT offered to everyone who joined UR at the TH demise.  How can anyone promise an outrageous return on a member deposit they have never received?  It's like we're just passing our member bonds from one company to another - first TH, AK, then UR, then UE -- and on to Q?  It's pretty evident that no one can, wants to, will, or will even be able to pay these liabilities.  So quit saying you will as an inducement.  It's all BS, smoke and mirrors, and totally unsustainable.  We may be dumb for having done something a little crazy more than once, but I'd like to think that most are fairly sophisticated and able to do the math.



Similar to the Lusso deal, the redemption is definitely the part that I don't get economically.  How do you offer a redemption on a deposit that you never got?  I understand what SciFrog is saying.  The redemption is supposed to come out of future deposits much like UE promised (and can't fulfill).  However, assuming member sales really are that good to allow for this 4 in: 1 out for a large number of UE members, wouldn't Q be much better off financially using the deposits for the financial health of the club rather than redeeming out members who did not contribute a deposit?  Seems that as a member you'd either be ticked off that people are getting deposits out of your club when they contributed none (and you did) or you view it as a smoke screen or virtual impossibility to where I'm not sure why it's being promised.


----------



## Kagehitokiri2

other clubs _*could be*_ just as transparent as luxus/rocksure.



ClubsRDead said:


> over market price dues


$1K/nt is market average, luxus/rocksure are cheap, and some are closer to $500/nt (not incl EE) 


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.


now that is "interesting"...

$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?


*SciFrog* what do you think of my statement that Q may have dragged out negotiations with lusso and UE to ensure bankrupty, so they could try to maximize benefit to them? perhaps it seems someone else might benefit more, so they put out what may be a poorly timed/structured offer now.

as someone who is only looking at industry, i cant really criticize them, when its clear that at the very least UE senior mgmt needs to go.


----------



## SciFrog

Looks like Q doesn't think bankruptcy would bring them anything (forced liquidation?) so they are trying to get members though a high dues, low upfront scheme. We need to see all the details though. 

As said before though, I am relieved Q is not giving memberships away like at lusso time.


----------



## HereWeGoAgain

ClubsRDead said:


> <snip>
> Odder, the redemption offer that Q offered makes no more sense than the one that JT offered to everyone who joined UR at the TH demise.  How can anyone promise an outrageous return on a member deposit they have never received?  It's like we're just passing our member bonds from one company to another - first TH, AK, then UR, then UE -- and on to Q?  It's pretty evident that no one can, wants to, will, or will even be able to pay these liabilities.  So quit saying you will as an inducement.  It's all BS, smoke and mirrors, and totally unsustainable.  We may be dumb for having done something a little crazy more than once, but I'd like to think that most are fairly sophisticated and able to do the math.
> <snip>



Not to defend Q, but I think all the comments about how the redemption works in the DC industry are off-track.

Q doesn't need *any* funding to make a redemption promise.  All they need to do is sell memberships in the future.  It is the new member's money that is used to redeem departing members.  Thus the clubs esentially plan that they will have lower net growth because future sales will go 33% (or 25% with Q) to the redemption process.

Now, you can certainly argue that there won't be any future sales (or that they will be way too small to support a large number of resignations - which seems to be the actual history), but the current or even future Q balance sheet has nothing to do with redemptions, so this discussion should acknowledge that fact I think.

By the way - I just received a flyer with some interesting offers from Staples, but then got a message from Office Depot saying _"Staples wasn't 'authorized' to make any offer to you"_ so of course I won't be buying anything from Staples...     :rofl: 

I do so love JT's view of the world....


----------



## HereWeGoAgain

TarheelTraveler said:


> Similar to the Lusso deal, the redemption is definitely the part that I don't get economically.  How do you offer a redemption on a deposit that you never got?  I understand what SciFrog is saying.  The redemption is supposed to come out of future deposits much like UE promised (and can't fulfill).  However, assuming member sales really are that good to allow for this 4 in: 1 out for a large number of UE members, wouldn't Q be much better off financially using the deposits for the financial health of the club rather than redeeming out members who did not contribute a deposit?  Seems that as a member you'd either be ticked off that people are getting deposits out of your club when they contributed none (and you did) or you view it as a smoke screen or virtual impossibility to where I'm not sure why it's being promised.



Sure, any business would be better keeping all its revenues and having no expenses, but the "DC model" developed from golf clubs and elsewhere tried to allow members to depart by using some portion of future sales to redeem out departing members.  Thus, the managers of DC businesses tend to fall back on what they already do - "I'll redeem you with someone else's money someday"........

The concept is certainly unsustainable eventually (after all possible candidates become members, how does anyone get out??), but the DC industry doesn't seem to think beyond next Tuesday in many ways.


----------



## ClubsRDead

HereWeGoAgain said:


> I do so love JT's view of the world....



JTs view of the world is simple....there is only ONE view, his.

As to the redemption issue, we can all agree that new sales drive it, but then what happens to the reported 100+ folks on the redemption list at Q if all the UE folks would come in?  Let me guess, they would get told "sorry, they didn't come in as full members."  Which as an existing member would piss me off even more.

Rumors are Q has 75-100 on redemption list.  Anybody confirm that?


----------



## SciFrog

I will not confirm the size of the resignation list, however please note there aren't many penalties to be on the list, so if it ever starts to shrink significantly again, many people on the list might not resign anyway.


----------



## Northof49

Whomever has the ear of CS right now, with the best case scenario business plan, will capitalize on the best assets of the club whether it is the member group or any of the competitors circling the decomposing remains of UE like vultures.  The size of the blood bath will be up to how much CS is willing to give away and how many true white knight offers are out there with long term viable solutions for everyone.  The potential for a start up Club now is huge with available properties at a low cost as long as debt is managed properly and a fiscally responsible management team is in place.  A complete purchase of properties from CS is not realistic as not all properties are of as much value dollar wise or usage wise. 

Also where all three groups currently fit in down the road is questionable.  Maybe 2 levels is more viable with at least one home of each club in every location to maximize on local people and expenses.  I am from PE Legacy as a Premier member and in going forward, I feel our position and stake is at most risk as our number of members is the lowest in the club, our contribution is the smallest on both membership and dues but our cost for capital is also the lowest on the upside.  I hope that everyone that wants to move forward in whatever is proposed gets a chance to participate and aren't kicked to the curb just because of our lesser percieved value.  

Hopefully a core Member group has had contact with CS to show the members are interested investors but not as pieces of meat this time, but actually owning the butcher shop so WE decide who's heads get chopped when required.  Strength in numbers people and thanks to everyone who is posting, reasearching and reaching out to all other members who have been abandoned and left voiceless in the old UE world!!


----------



## Kagehitokiri2

ClubsRDead said:


> As to the redemption issue, we can all agree that new sales drive it, but then what happens to the reported 100+ folks on the redemption list at Q if all the UE folks would come in?  Let me guess, they would get told "sorry, they didn't come in as full members."



different clubs played different games with this, indeed. there were also changes between different measurements, like dollar figures, days, etc.

was lusso only one to have cap and time limit when cap reached?



Northof49 said:


> Maybe 2 levels is more viable



interesting. PE added 3rd tier very late with mostly rentals right?

UE i dont remember, but it was pretty much entirely TH homes after acquisition right?


----------



## Northof49

I am not sure when PE added the entry level Premier Club and I also don't know what houses were owned, if any, versus leased.  As you can see I bought in on 'The Dream' assuming that salesmen don't lie and that customer satisfaction was the number one objective for PE.  I don't know much about the TH situation or how it even came to be.


----------



## ClubsRDead

Kagehitokiri2 said:


> UE i dont remember, but it was pretty much entirely TH homes after acquisition right?



Filings show that UR bought about 60 homes from TH in the transaction.  I do recall that UR did not buy everything as anticipated as they did not have the money to do so.  Those purchased include the "duplicates" though, like 4 Trumps = 4 separate homes in listing, 6 Esperanzas, same thing.  So 10/60 in clusters, including a couple condos in Deer Valley and other places.  Most were PR (private retreats), but some were DR (distinctive retreats) level which equated to Signature or Elite at UR.

UR / UE filings show home sales in varying amounts but don't know which ones were sold after the TH closing and then supplemented with rentals or leases.


----------



## smtraveler

When I joined PE in 2006 or thereabouts, the Premiere level was the only level and the Signature level was added shortly after.  Premiere was the original PE club and I believe that almost all of the PE Premiere homes were owned.


----------



## Desties

Kagehitokiri2 said:


> PE added 3rd tier very late with mostly rentals right?



The third tier was the higher club -- now Elite. It only had roughly 20 members and 6 properties (a Charleston property with a problematic zoning problem that ultimately had to be sold off, a lease with purchase option on the best property in Abaco Club, an NYC Penthouse, etc.).


----------



## PuntaEscape

*Owned homes*



smtraveler said:


> When I joined PE in 2006 or thereabouts, the Premiere level was the only level and the Signature level was added shortly after.  Premiere was the original PE club and I believe that almost all of the PE Premiere homes were owned.



You are right when you look at their original filings all the Premier homes except one were owned, and in the sales presentations they discussed how ownership would be oone home for every six members and that they did not plan on leasing as that model does not work.  I joined in 2004


----------



## PuntaEscape

*Take the money*



Northof49 said:


> Whomever has the ear of CS right now, with the best case scenario business plan, will capitalize on the best assets of the club whether it is the member group or any of the competitors circling the decomposing remains of UE like vultures.  The size of the blood bath will be up to how much CS is willing to give away and how many true white knight offers are out there with long term viable solutions for everyone.  The potential for a start up Club now is huge with available properties at a low cost as long as debt is managed properly and a fiscally responsible management team is in place.  A complete purchase of properties from CS is not realistic as not all properties are of as much value dollar wise or usage wise.
> 
> Also where all three groups currently fit in down the road is questionable.  Maybe 2 levels is more viable with at least one home of each club in every location to maximize on local people and expenses.  I am from PE Legacy as a Premier member and in going forward, I feel our position and stake is at most risk as our number of members is the lowest in the club, our contribution is the smallest on both membership and dues but our cost for capital is also the lowest on the upside.  I hope that everyone that wants to move forward in whatever is proposed gets a chance to participate and aren't kicked to the curb just because of our lesser percieved value.
> 
> Hopefully a core Member group has had contact with CS to show the members are interested investors but not as pieces of meat this time, but actually owning the butcher shop so WE decide who's heads get chopped when required.  Strength in numbers people and thanks to everyone who is posting, reasearching and reaching out to all other members who have been abandoned and left voiceless in the old UE world!!



Capital Source does not want to run a club, they want to have solvent loans, they will write this down, sell the properties, eliminate the leases and contracts and get out.  Time is running out if not already gone from Cap Source.


----------



## EOD

Kage:  To suggest that Q may have had some nefarious plan to ensure bankruptcy of UE and Lusso is prob over-reaching a touch.   All of us at DC4MS were posting UE was doomed after the SPAC deal using simple math.  The SPAC deal was a total scam as they fleeced members into putting in more cash in return for equity knowing full well that outside investors would be putting in paltry amounts. In the end, both Lusso and UE went bankrupt as a result of their own problems--if Q took their time looking at them, it was incumbent on those companies to seek all available other options--which were obviously none.  I do recall laughing when some UE members said last fall that UE would be buying Q...

Ignoring Desties hysterical "anything but Q" commentary, i would think UE members have a probability question similar to the one faced by Lusso members last year.  As i recall, Lusso members put up 15K for a shot to get back 350K or so at some point in futures.  4% is cheap price for a call on real estate.   UE members need simply to figure the value of the future consideration they may be receiving versus payment made now and decide what Q prob of bankruptcy is.  4% is a layup, 50% is prob a bad call.   Recall, Q does have locked in equity investor which UE never had so there is more stability there.  But resignation list is long....

I know it is long as I remain on the resignation list at Q. They remain utterly non-responsive so i've lawyered up...it's annoying waste of time and energy.  They do send me the Q photo of the month, presumably to mock me....

Anyone needs objective advice on Q, feel free to PM me.


----------



## ClubsRDead

EOD said:


> Recall, Q does have locked in equity investor which UE never had so there is more stability there.  But resignation list is long....
> 
> I know it is long as I remain on the resignation list at Q. They remain utterly non-responsive so i've lawyered up...it's annoying waste of time and energy.  They do send me the Q photo of the month, presumably to mock me....
> 
> Anyone needs objective advice on Q, feel free to PM me.



Does anyone have the details of this mysterious "locked in" investor?  Surely in a process like negotiations with UE (or whomever) someone would require some due diligence on this.  Like, Cap Source isn't going to just approve some debt swap or something and take it on the word of "we have a really rich guy who pays our bills."

How long have you been on their resignation list?  So when they boast some 550 or so members in 80 homes, is that inclusive of those who are waiting to get out?

Or, can you not say on here?


----------



## SciFrog

Non responsive how? The list won't clear anytime soon and you are at the end of it... I might be there soon too for reasons that have nothing to do with DC or economic crisis...

You still travel and pay dues on the resignation list...

UE was doomed from the get go, not enough cash at the T&H deal...


----------



## BetterClient

*Quintess: Their Secret Investors Are.....*

To ascertain the identity of their secret investors-you'll need access to only two databases. One is the SEC's Edgar database, and the other is Google. 

If you pull up Club Holdings filings for their private placements, you'll see the addresses of the LLC's controlled by the "Secret Investors." 

If you'll then Google those addresses-you'll know exactly who they are!

PS-If you're lucky enough to become a multimillionaire or a billionaire, invest $50 a year in PO Box so your financial affairs can actually remain private. Don't use your home address for your LLC's.:rofl:


----------



## Kagehitokiri2

EOD said:


> Kage:  To suggest that Q may have had some nefarious plan to ensure bankruptcy of UE and Lusso is prob over-reaching a touch.



the long negotiations that were ended, in Q's case abruptly. (and lusso)

the recent Q offer.

that they havent acquired oyster yet.

its just a thought, not a really carefully analyzed hypothesis. 


BetterClient said:


> To ascertain the identity of their secret investors-you'll need access to only two databases. One is the SEC's Edgar database, and the other is Google.
> 
> If you pull up Club Holdings filings for their private placements, you'll see the addresses of the LLC's controlled by the "Secret Investors."
> 
> If you'll then Google those addresses-you'll know exactly who they are!
> 
> PS-If you're lucky enough to become a multimillionaire or a billionaire, invest $50 a year in PO Box so your financial affairs can actually remain private. Don't use your home address for your LLC's.:rofl:


hmmm


PuntaEscape said:


> You are right when you look at their original filings all the Premier homes except one were owned, and in the sales presentations they discussed how ownership would be oone home for every six members and that they did not plan on leasing as that model does not work.  I joined in 2004


my bad - interesting re their statements on leases


----------



## Kagehitokiri2

UE's quick response >


UEgly said:


> *Within hours *of exposing their purchase of DC4Ms, the DC4Ms site was completely down, no longer pretending to be down temporarily for improvements (as the landing page message read for, what, 8 months?).



then we have >

September 15, 2010, 06:08 AM 


Kagehitokiri2 said:


> just thought id post, as usual no claims re veracity. but also no coverage of UE... pretty big news... even something ridiculously short.


15 September 2010 06:41 
http://www.sherpareport.com/destination-clubs/ultimate-escapes-restructuring.html
incl >


> Correction: The original version of this article noted that the CFO had left Ultimate Escapes last week. We have now been informed that he is still at the company.


cause of correction? >


willmyclubmakeit said:


> CFO is still at UE (or was earlier this week).  I spoke with him.  He is not th culprit from my experience.


----------



## EOD

BetterClient said:


> To ascertain the identity of their secret investors-you'll need access to only two databases. One is the SEC's Edgar database, and the other is Google.
> 
> If you pull up Club Holdings filings for their private placements, you'll see the addresses of the LLC's controlled by the "Secret Investors."
> 
> If you'll then Google those addresses-you'll know exactly who they are!
> 
> PS-If you're lucky enough to become a multimillionaire or a billionaire, invest $50 a year in PO Box so your financial affairs can actually remain private. Don't use your home address for your LLC's.:rofl:



at long last....a non-Q person has found it. of course, only a Non-Q person could post it due to NDA's.


----------



## EOD

ClubsRDead said:


> Does anyone have the details of this mysterious "locked in" investor?  Surely in a process like negotiations with UE (or whomever) someone would require some due diligence on this.  Like, Cap Source isn't going to just approve some debt swap or something and take it on the word of "we have a really rich guy who pays our bills."
> 
> How long have you been on their resignation list?  So when they boast some 550 or so members in 80 homes, is that inclusive of those who are waiting to get out?
> 
> Or, can you not say on here?



I think what was often posted was that q's resignation list was not materially different from competitors when compared on DC4MS...

My q story is a bit different. I went on list during restructure, came off as they gave us some inducements to come off.  After that they changed a number of aspects of our membership agreements (holiday lottery change, reciprocal use plan changes, etc) that basically made my holiday membership useless.  

Again, for UE members it's a simple question of what you might get versus what you have to put up with Q to get it.   I wouldn't trust this management team any more than any other, but you are at least getting some economic value for joining vs others.


----------



## AKTHUE

BetterClient said:


> To ascertain the identity of their secret investors-you'll need access to only two databases. One is the SEC's Edgar database, and the other is Google.
> 
> If you pull up Club Holdings filings for their private placements, you'll see the addresses of the LLC's controlled by the "Secret Investors."
> 
> If you'll then Google those addresses-you'll know exactly who they are!
> 
> PS-If you're lucky enough to become a multimillionaire or a billionaire, invest $50 a year in PO Box so your financial affairs can actually remain private. Don't use your home address for your LLC's.:rofl:



Why don't you save us the time and post the answer if it is publicly available


----------



## HereWeGoAgain

*Here is one investor in Q*

*http://www.stcloudcapital.com/index.htm*

Club Holdings, LLC  
www.quintess.com 

St. Cloud invested in Club Holdings, LLC, in the form of Series B preferred stock. The funds will be used for working capital and acquisitions. Club Holdings provides hospitality services to members at a variety of destinations including: Telluride, Cabo San Lucas, Napa, New York City, Amelia Island, Hawaii, Scottsdale, Palm Springs, Jackson Hole, Kiawah Island, and Beaver Creek.

_______________________________________________________

Not likely to be the "$200 million secret investor however..."


----------



## Desties

EOD said:


> Ignoring Desties hysterical "anything but Q" commentary.



EOD, I know we had our differences during the DC4MS days, but aren't we saying the same thing here? 

Q's homes look superb, but the deal breaker for me is that the club demands you keep paying, even after you formally go on the resignation list. UE has never done that (even though there's a laundry list of pain there, too). You bring it up as if it's a probability question -- the shot at paying a transfer fee (which is closer to 10% of the deposits) for the chance to get 75% to 100% of one's deposit back in five years. However, the sticking point is that after five years of dues (which is roughly what deposits are anyway) folks may STILL have to keep paying the annual dues until the 4-in, 1-out process works its course. If you've been on the resignation list for some time, imagine how many years after those first five that UE members will find themselves on said queue.

That is my ONLY beef with Q that would be considered a deal breaker, and isn't it the same reason why you have had to lawyer up?


----------



## EOD

Desties said:


> EOD, I know we had our differences during the DC4MS days, but aren't we saying the same thing here?
> 
> Q's homes look superb, but the deal breaker for me is that the club demands you keep paying, even after you formally go on the resignation list. UE has never done that (even though there's a laundry list of pain there, too). You bring it up as if it's a probability question -- the shot at paying a transfer fee (which is closer to 10% of the deposits) for the chance to get 75% to 100% of one's deposit back in five years. However, the sticking point is that after five years of dues (which is roughly what deposits are anyway) folks may STILL have to keep paying the annual dues until the 4-in, 1-out process works its course. If you've been on the resignation list for some time, imagine how many years after those first five that UE members will find themselves on said queue.
> 
> That is my ONLY beef with Q that would be considered a deal breaker, and isn't it the same reason why you have had to lawyer up?



It is not the same reason why i have hired a lawyer.  My specifics can't be discussed here, though. 

 So, although I'm an unhappy member, the good news is it seems you will be joining Q!   I think they'll be excited.  Here's why: it is still a probability question.   a factor, as you point out, could be that a UE member may not be able to perpetually afford dues. But what happens if the UE member turned Q member stops paying dues?  He loses what?  As far as I can see, if you don't take the Q deal and join EE  you assuredly lose the UE deposit.   If you take the Q deal, stop paying dues in 4 years, you forfeit the shot at getting back...the same UE deposit.  The annual dues are presumably to pay for travel so either choice you travel, but *only in the Q plan do you get a chance at getting back the refund*.   if the penalty for failing to pay dues is losing a deposit otherwise worth zero anyway, who cares?!  So, CONGRATS ON JOINING Q!  I have great tips for the Tuscany and Hawaii properties!

That said, if dues were too high + 10% deposit too much, you might start reaching probability levels you don't like. 

If for some reason the world recovers strongly (as it does most of the time in 2nd half of a president's first term), you could easily get the deposit back.  Not saying it's 90% assured, but is it less than 20%?  Not sure.

Let's face it UE members have been fleeced into much worst investments. Buying equity in a de facto bankrupt company is a lot worse than buying a call option of future return of deposit.  Sure you could lose, but the expected value is so much better here.


----------



## TarheelTraveler

Some food for thought:

1. As opposed to a member owned company or other equity plan, the Q transfer fee is going into someone else's company.  I would think that would be a non-starter for a lot of people burned by putting capital infusions into someone else's company.  I bet a lot of UE members will (or at least should) insist that any new deposits go into something that they own and probably control.

2. If you assume 100 on the Q resignation list currently, and say 100 UE members were on the resignation list ahead of you, wouldn't that mean you'd need 700 paying new members joining before you could see that deposit returned?  Wouldn't that be more than have ever joined Q since it began?  What sort of time frame do you think that we're talking about?  What about time value of money?  I bet if you ran the numbers and put 50K into actual assets that you owned, you may end up better without as much risk.

3. Hasn't the whole idea of we'll find money down the road to pay for liabilities we're creating now worked pretty miserably in the DC world?  I know this is also how our government works, but I don't have a practical choice of putting money into it.

4. I understand the concept that if I didn't really put in a deposit (although the transfer fee might be considered a deposit), what do I have to lose.  However, I assume that you're still on the hook for the dues regardless of whether you give up your right to a return of the deposit and/or transfer fee.  In other words, I assume Q can still come after you for the dues.  Unlike the DC world in general , I assume most members are better about paying their bills and don't want to owe people money or have creditors coming after them.

5. Certain clubs have been quite liberal in changing the terms of member agreements.  Can a UE member feel comfortable that their Q deal will "stick?"  Hasn't that come up time and time again in litigation against Q.  I'm not saying those people are right as the court would need to decide that, but it has come up many times.

6.  At least Q has a much deeper pocketed equity investor than UE, which is obviously a very good thing.  That's why they're one of the few clubs left standing. I think the wild card is what are the conditions for continuing investments.  Seems they could provide a redacted version of the agreement for a prospective member.  I'd certainly want to know, because that is a CRITICAL component in future dues, stability of the club, etc.  IIRC, SciFrog and EOD have noted that the equity investor pays much of the debt service on the houses for the club, which is actually the right way to do it IMO if you're going to have a non-equity club.  If someone else gets the appreciation on the real estate portfolio, they should at least ante up so to speak.  I definitely give Q credit for that.

7. I know that no one likes paying lawyers, but I'd recommend that UE members wisely spend some money to have their lawyer look at any prospective agreements.  Having reviewed at least 5 different DC's member agreements over the years, I can vouch that there are huge differences between them.  I know that they all look similar to a non-lawyer, but the devil is always in the details.  You can tell a lot about how a member can (and likely will) be treated when you examine the nuances.  Many clubs have had clauses that arguably allow them to change the terms of a contract in their discretion, essentially making it binding on you but not on them.  I'm skeptical that a lot of lawyers would have let their clients sign some of the agreements that are out there.

Hopefully, the UE circus will be resolved soon, and members can have some peace again.


----------



## BetterClient

*Q/UE-What money are they putting into this?*

Carefully reading their opportunistic offer-they do not say anywhere that their investors are advancing capital to the 3 new proposed clubs. Their investors are accelerating their capital into the parent corp, Club Holdings. 

How much if any capital they would be infusing into Q Elite, Q Signature, and Q Premier is unknown. I suspect that they are like an internet real estate guru, trying to do this with no money down of theirs. UE members post a "transfer fee" and that working capital will be used to secure leases and or to lease usage from Q homes. 

As proposed it is a great deal for Quintess, not so good for UE members. 

I will wait and see what next week brings. Still believe that we as a group are valuable to any number of prospective real estate operators. 

Frame this like a piece of rental property with an appraised value of $75MM-$100MM, and $18MM in annual revenues against that-if the debt costs are materially lowered-it can work. There will be some pain-those on the resignation lists can choose to travel again, or to receive very small payouts, those with sweetheart deals will need to start paying market rates on their dues-all of us need to understand that ever getting capital back is an extremely remote possibility. 

I hope that a solution that allows us to continue to travel is the one that is found.


----------



## Desties

TarheelTraveler said:


> 2. If you assume 100 on the Q resignation list currently, and say 100 UE members were on the resignation list ahead of you, wouldn't that mean you'd need 700 paying new members joining before you could see that deposit returned?



What I read wasn't exactly clear on that front. UE folks aren't being asked to join Q, the way that Lusso members did. This is the formation of a new club by Q, so it may mean 4-in, 1-out WITHIN that particular offering. Given that the dues are higher than UE members are presently paying, I can't imagine it being much of a sell WITH a front-end deposit in the future, so it's hard to say what kind of deposit folks will be looking at, given that the redemption is based on what folks are paying in deposits 5 years from now. 

So, the good news is that UE refugees probably won't be behind those on the Q resignation list and the Lusso members that will get on the list in four years. The bad news is that it's hard to see this gaining traction. UE had problems making this 3-tiered system work with 1200 members, how is Q going to manage if just 30-50 UE members take them up on this offer? Q's plans seem to based on what it was thinking several months ago -- of a complete combination with UE -- but now that it appears to have broken off, I don't see how Q can make UE Lite work given what should be a very small number of members and even fewer base of properties (unless reciprocity within Q homes is part of this).


----------



## ClubsRDead

So what are we assuming here, that this Q offer is in some fashion "approved" by CapSource, that they would move or realign some of the UE / PE assets in the existing loan to either other Q loans, or new loan arrangements that would divvy up the assets amongst the new Q level clubs?

As a member who never was really restricted by "boundaries" of clubs until the UR / UE thing, and then PE infusion - I don't like it.

How much paper does Q have with Cap Source?

More importantly, it looks like the one who really benefits from a Q offer would be JT and his mgmt team, whichever of them they would take.  I can't imagine the "offer" went out without JTs approval in some fashion despite what the follow up email said.  And its doubtful he would support or approve of any sale or merger that didn't personally benefit him, even if it meant just doing the right thing for the members and creditors.  At least McGrath and co walked away and let the thing get sorted out.

Assuming the UE / CapSource relationship isn't one of love and mutual respect, is there a better relationship between Q and them that would foster something like this?


----------



## Northof49

This is a fear I have that the members will be bought and sold like livestock to a 3rd party w/o any of us having a chance to do anything different, tag along along and pay more into someone els's pocket with no control on how and where that money goes.  Hopefully CS knows there is a member driven desire to at least make an attempt to take a run at this if it even makes sense.  A member run/owned club would have the membership as it's primary focus with debt repayment obviously a primary concern for a longterm viable go forward club.  Can that be said about any of the other non-equity clubs out there at this time??


----------



## AKTHUE

Northof49 said:


> This is a fear I have that the members will be bought and sold like livestock to a 3rd party w/o any of us having a chance to do anything different, tag along along and pay more into someone els's pocket with no control on how and where that money goes.  Hopefully CS knows there is a member driven desire to at least make an attempt to take a run at this if it even makes sense.  A member run/owned club would have the membership as it's primary focus with debt repayment obviously a primary concern for a longterm viable go forward club.  Can that be said about any of the other non-equity clubs out there at this time??



The CRO's assignment is to cut expenses to the bone to stop cash loss, and to sell the assets, which includes the member base, to the entity which will generate the highest amount of cash for UE's creditors. Pleasing members or ensuring long-term viabiliity is not his assignment, other than to the extent it increases the value of the members to an acquirer. He serves at the pleasure of CapSource.


----------



## ClubsRDead

AKTHUE said:


> The CRO's assignment is to cut expenses to the bone to stop cash loss, and to sell the assets, which includes the member base, to the entity which will generate the highest amount of cash for UE's creditors. Pleasing members or ensuring long-term viabiliity is not his assignment, other than to the extent it increases the value of the members to an acquirer. He serves at the pleasure of CapSource.



Two things based on what you stated:

1.  The CRO (or firm itself) in this case appears thus far to be impotent.  Obviously put in place by CapSource, presumably any fees they incur will be paid by CapSource (and ultimately us or the acquirer or the loan, in some fashion).  We haven't heard from this CRO other than as a tagalong on JTs dumb emails.  They don't even email us from their own email addresses so one can easily reply.  So while I contend that what the role of the CRO should be is to do exactly what you stated, I would argue that they are doing anything, at least that is visible, at this point.

2.  If they're going to put a value on us members, then they need to be hearing what we want, or think.  JTs poll of "no" votes should have been a starting place.  They can promise us to someone but they can't make us go.

I hope enough of us just say "no" to whatever dumb things they come up with until we have a chance to thoroughly examine all options, if any.  And that can't happen with an absentee CRO or lack of process.  More importantly, it won't happen so long as JT is at the helm with his chief mates because I don't think anyone will support anything he is involved in.


----------



## HereWeGoAgain

EOD said:


> <snip>
> Here's why: it is still a probability question.   a factor, as you point out, could be that a UE member may not be able to perpetually afford dues. But what happens if the UE member turned Q member stops paying dues?  He loses what?  As far as I can see, if you don't take the Q deal and join EE  you assuredly lose the UE deposit.   If you take the Q deal, stop paying dues in 4 years, you forfeit the shot at getting back...the same UE deposit.  The annual dues are presumably to pay for travel so either choice you travel, but *only in the Q plan do you get a chance at getting back the refund*.
> <snip>



Thus, much the same deal as UE (then UR) offered the T&H members - _"join now and pay dues, and a 'modest' upgrade fee if you want more days, and you will get [some of] your membership deposit back after 5-7 years because we will keep selling memberships and every third one will go to a redemption."_

Can anyone explain how Q's offer differs in material substance from that...???


----------



## ClubsRDead

HereWeGoAgain said:


> Can anyone explain how Q's offer differs in material substance from that...???



It doesn't, that's why it's sh*t and totally unsustainable.  They're just hoping a large enough # of us jump for it, like we did at UE / UR, and they pull it off for a while.

It seems very few actually received it, well maybe 40-50% of the membership base?  JT says it was an error, so who knows.  I suspect by the end of the weekend we see something else come out....either another JT plea for cash or some revised version of Q.  Has anyone heard anything about the Option #5, a bankruptcy filing yet?


----------



## AKTHUE

ClubsRDead said:


> Two things based on what you stated:
> 
> 1.  The CRO (or firm itself) in this case appears thus far to be impotent.  Obviously put in place by CapSource, presumably any fees they incur will be paid by CapSource (and ultimately us or the acquirer or the loan, in some fashion).  We haven't heard from this CRO other than as a tagalong on JTs dumb emails.  They don't even email us from their own email addresses so one can easily reply.  So while I contend that what the role of the CRO should be is to do exactly what you stated, I would argue that they are doing anything, at least that is visible, at this point.
> 
> 2.  If they're going to put a value on us members, then they need to be hearing what we want, or think.  JTs poll of "no" votes should have been a starting place.  They can promise us to someone but they can't make us go.
> 
> I hope enough of us just say "no" to whatever dumb things they come up with until we have a chance to thoroughly examine all options, if any.  And that can't happen with an absentee CRO or lack of process.  More importantly, it won't happen so long as JT is at the helm with his chief mates because I don't think anyone will support anything he is involved in.



I believe that the CRO is controlling more than you see. Probably every expenditure and every binding agreement needs to by approved by the CRO. The decision to close Ft. Collins and the layoffs to date were probably made by the CRO, as were decisions to cancel leases and cancel reservations at hotels which required payments by UE.

I suspect that JT hates the CRO and is working at cross purposes with the CRO and not communicating well with him, and possibly is withholding information and having his own discussions with potential acquirors. It's likely that JT's underlying goal is to cut his own best deal, and that he's not motivated to help the CRO, nor CapSource, nor the members; instead just looking for the deal that gives him an employment contract or debt that could be paid or stock/options/warrants that could be worth something - that is if he no longer believes he has a chance to make the existing ULEI entity worth anything, and I think the appeal to members was his last attempt at that. 

I would not be at all surprised if JT was a party to the Q offer many members received, without the CROs knowledge. Perhaps JT had been offered employment by the new club, or a portion of the transfer fees generated (or both). When the CRO found out about it, he demanded that it be withdrawn. Yes the email had both names but that doesn't mean anything. 

It is a fair comment that the CRO hasn't done a good job of communicating with members - maybe it is because he doesn't understand the business or isn't very hands-on. Certainly it appeared that Holly Etlin was much more visible in the T&H restructuring, and clearly placed a premium on maintaining member satisfaction - in part to collect monthly dues, I think, and because she saw value in selling a supportive membership base. We don't know why the CRO here hasn't engaged the members. Perhaps he doesn't see value in the member base in this economy. Perhaps he's been given a limit on how many hours he can spend. Perhaps he's just trying to do a quick sale. Perhaps our CRO is getting no cooperation from the UE execs.

Certainly the lack of communication from the CRO is disheartening.

As UE members, our best outcome will be if we get organized and have some leaders who can speak for us collectively, ideally leaders who are experienced in real estate and law, and that we negotiate collectively. If individual members cut deals with Q, ER, A&K, EE, etc. our value and power is reduced. If we get organized, then we can have a seat at the table and negotiate a deal, whether in cooperation with CapSource and the CRO, or separately, and get some of the value of the member base for ourselves.

However, I haven't seen any real sign of getting organized, beyond collecting email addresses, and this BB plus the one at www.ultimatemembers.org - but I haven't seen anyone step forward with a plan or inside knowledge. It seemed we were better represented in the T&H reorganization, though in retrospect that hasn't turned out so well. If there are proposals being worked on, it would be nice if there were some disclosure and transparency for the members.

But most important of all - UE members should not commit to anything individually until there is some disclosure of group actions and some kind of forum for all the members to communicate among one another.


----------



## AKTHUE

ClubsRDead said:


> It doesn't, that's why it's sh*t and totally unsustainable.  They're just hoping a large enough # of us jump for it, like we did at UE / UR, and they pull it off for a while.
> 
> It seems very few actually received it, well maybe 40-50% of the membership base?  JT says it was an error, so who knows.  I suspect by the end of the weekend we see something else come out....either another JT plea for cash or some revised version of Q.  Has anyone heard anything about the Option #5, a bankruptcy filing yet?



I agree that the Q proposal as described here is not attractive at all, doesn't create any sustainable business model, and is designed like all the other bait and switch offers we keep hearing - they make sure that we have a sunk cost, some future trips to protect, and the promise of a payment in 3-5 years so that we keep paying in the meantime. 

I have heard speculation that the Q offer was emailed to those members who voted yes in JT's poll. In fact, perhaps the real goal of the poll wasn't to show anything to CapSource, but to collect the prospect list of those who were most gullible or the easiest target for an offer like the Q offer. 

The Q offer clearly came with the cooperation of someone very senior in the company who had access to the membership data base. Likely JT. The disavowal was forced on him by the CRO or CapSource. Neither JT nor CapSource have member interests at heart other than to the extent they can get value out of the member base. We need to be organized.


----------



## Northof49

I agree completely that the member base needs a reliable business plan with professionals from within helping to steer, if not ultimately negotiating a possible offer.  Just because 2:1 voted against JT's offer doesn't mean that all the members are behind a member owned equity club as the devil is in the details and the total number willing to do this yet again.  

I know I won't give more money to any club that is not equity based but at the same time can I realistically afford the 'Member Solution' buy-in and yearly dues, whatever that even looks like?  As a Legacy PE Premier member, my financial obligation is/would be much less than either the Signature or Elite folks based upon our type of homes.  Will the Premier Club still be there or will it only be Signature and Elite or some other variation of the 3 Clubs?  It is all fine and good to say you won't support any of the offers out there now, but until we see what the true costs are to run our own club, and that has been discussed in other posts, how we can truthfully tell each other we have value and a way out as a member group?  It has been stated there is value in the membership, and I concur, yet each of us has to evaluate what our go forward position is based upon what someone else tells us we are worth.  

I feel it is getting down to the 11th hour for getting this type of info to members truly interested in going forward with an equity club as talk really is cheap, although necessary.  I don't know how the US bankruptcy system works but if the assets are sold by CS to the highest bidder as they please when they please, whether the members are somehow included in a club buyout or not, the members need to be at the table at the same time.  We can control our destiny with eyes wide open or catch the last train car out and pay full fare for destination unknown or we all walk away with hands in pockets upset that the big bully took OUR ball from us yet again and told us to play somewhere else because we aren't any good.


----------



## Northof49

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.


----------



## AKTHUE

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.



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.


----------



## Northof49

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.


----------



## Jack1234

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).


----------



## ClubsRDead

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.


----------



## Jack1234

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.


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## ClubsRDead

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.


----------



## Teddy AK

ClubsRDead said:


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



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


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## EOD

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 ???)


----------



## Kagehitokiri2

EOD said:


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





Kagehitokiri2 said:


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





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.





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".


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





Kagehitokiri2 said:


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


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?


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


----------



## EOD

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.


----------



## Kagehitokiri2

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.
> 
> 
> 
> $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?
Click to expand...

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.


----------



## Kagehitokiri2

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


----------



## EOD

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
> >



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).....


----------



## Kagehitokiri2

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).....



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.


----------



## Desties

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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## Kagehitokiri2

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*.


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


----------



## EOD

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.


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


----------



## ClubsRDead

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?


----------



## DestiFan

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.


----------



## travelguy

*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.


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.


----------



## ClubsRDead

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.



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.


----------



## Northof49

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.


----------



## Kagehitokiri2

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....



hello, SLAPP lawsuit settlement...

UE membership? what?


----------



## Bourne

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.


----------



## Leonardo

Bourne said:


> 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.



So the HCC homes went to Phoenix Club which was 'purchased' by:

          possibly Q in order to have inventory to launch the three tier club to replace UE?

          or the mysterious 'other interested party' that was/is shopping the UE deal?


----------



## Kagehitokiri2

previously >


Bourne said:


> 1. Phoenix has rights to the "other properties" with an agreement worked out on some of the "Sheldon Good" properties wherever possible.
> 2. The new club brings together all the three groups mentioned in the previous post.


----------



## AKTHUE

*Bloomberg article on Ultimate Escapes*

http://www.bloomberg.com/news/2010-...-a-lifetime-club-says-it-s-near-collapse.html

Nothing really new in the article.


----------



## ClubsRDead

AKTHUE said:


> http://www.bloomberg.com/news/2010-...-a-lifetime-club-says-it-s-near-collapse.html
> 
> Nothing really new in the article.



Nope...just JT blaming his (our) demise on the economic woes of the economy, housing market, etc. - nothing to do with his poor fiscal management and lack of accountability, bad ideas.


----------



## travelguy

ClubsRDead said:


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



The problem is that any type of BR filing will have the effect of freezing the club and it's assets unless the creditors can agree to keep the club operating (which they won't).  Members don't understand that the BR process takes years before anything is even agreed to and will be even longer based on the complexity of the PE/UR/UE/JT/CP/FU M&A.  As evidenced by the fact that Bourne is just now posting about the Phoenix Club rising from the ashes of HCC that are so cold that the members singed membership deposits have been scattered to the remote corners of the world by the winds of time (as has any potential value of that group of former dues-paying members).

Member apathy and disinterest is the real problem when DCs end up in this situation.  Members can't decide if they should trust management (again), so they don't.  Members don't want to throw good money after bad, so they don't.  Members don't want to be fools again and risk losing another DC deposit, so they don't.  Members don't want to relive the uncertainty of not knowing if their travel plans will be cancelled last minute, so they don't.  Members don't know if making another DC dues investment will crash and burn, so they don't.

After their initial shock, pain and anger … members simply end-up wanting to forget the painful experience of the failed DC and walk away beaten down and disinterested in beating their heads against the walk anymore.


----------



## HereWeGoAgain

ClubsRDead said:


> 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.



The www.ultimatemembers.org web site *is* the same forum (renamed and with old posts re T&H and the UR assessment removed) as the others, so if you ever registered in the prior incarnations, you have access.

Maybe you meant to say "is now" rather than "is not"....????

Over there some folks are trying to plan a meet-up in NYC re this mess...might be worth checking it out.


----------



## DCworker

*UE Files For Bankruptcy Finally*

As a former employee they just let go in Colorado they are finally getting what they deserve, great job Rich K running it into the ground...


Ultimate Escapes Luxury Vacation Club Files for Bankruptcy Protection

http://www.bloomberg.com/news/2010-...ion-club-files-for-bankruptcy-protection.html


----------



## Aladdin69

DCworker said:


> As a former employee they just let go in Colorado they are finally getting what they deserve, great job Rich K running it into the ground...
> 
> 
> Ultimate Escapes Luxury Vacation Club Files for Bankruptcy Protection
> 
> http://www.bloomberg.com/news/2010-...ion-club-files-for-bankruptcy-protection.html


Unfortunately....they are NOT getting what they deserve.....They deserve some time in prison, and forfeiture of their assests!! We, the members, are getting what we don't deserve....a financial haircut, and months , if not years of misery!! As a former employee, I'm surprised that you didn't consider us??
I'm sure if we all put our heads together...we could collectively come up with some issues that might make Jimmy T, and fellow cohort, Rich K...culpable of something that might get them thrown in jail!!
Most of us know about the "sweetheart deals", they cooked up with friends and fellow investors etc... the favorable leases for their own personal properties, or those of their friends etc... cash back at closings for overpayment on properties... on n on!! Let's put our heads together, and see if we can't get this group put in a new "long term DC"....where they all belong!!!


----------



## Desties

Well, the list is out. Some leases/properties are immediately terminated, others MAY honor upcoming reservations. All of the seasonal/annual leases that were going to be brought on next month, naturally, are toast.

End result is that 70 properties remain available for new bookings -- but only for stays through October 19 under DIP financing -- as CapSource/UE go through the bankruptcy process to smoke out a suitor. If anyone wants to work the cruel availability math of 1200 members into 70 properties, you're a braver soul than I.


----------



## AKTHUE

Desties said:


> Well, the list is out. Some leases/properties are immediately terminated, others MAY honor upcoming reservations. All of the seasonal/annual leases that were going to be brought on next month, naturally, are toast.
> 
> End result is that 70 properties remain available for new bookings as CapSource/UE go through the bankruptcy process to smoke out a suitor. If anyone wants to work the cruel availability math of 1200 members into 70 properties, you're a braver soul than I.



As I read the letter, only bookings through Oct 19. After Oct 19 nothing unless someone buys the club and funds it.


----------



## Desties

AKTHUE said:


> As I read the letter, only bookings through Oct 19. After Oct 19 nothing unless someone buys the club and funds it.



Yep, I guess I was editing that as you were responding to it. You're right. Those properties are only available through October 19 -- though one would assume that someone acquiring the club would be getting the 1200 members and those 70 properties (though, as noted, they can be sold off individually).

I love the part about escape planners working diligently, because I have yet to get a response to a tentative reservation I placed LAST WEEK.


----------



## Kagehitokiri2

http://www.sherpareport.com/destination-clubs/ultimate-escapes-bankruptcy-0910.html



> The overall filing listed 85 companies which are going through this process. There are so many companies because many of the clubs individual homes are held in their own separate club owned companies. The filing showed estimated assets of $188,676,000 and estimated liabilities of $222,010,000.
> 
> As we reported last week, the largest secured creditor is Capital Source who is owed in the region of $90m.


----------



## ClubsRDead

Desties said:


> I love the part about escape planners working diligently, because I have yet to get a response to a tentative reservation I placed LAST WEEK.



In fairness, we need to give our planners a break.  Mine said there are only a couple of them left and they've been given no direction.  And they've had their payroll late and delayed several times already.

It sounds like JT and RK are still at the wheel of this bus.  Very disturbing.

And by the way, no one is buying this club and all of us, and all of the homes in 30 days.  Impossible.


----------



## Desties

ClubsRDead said:


> In fairness, we need to give our planners a break.  Mine said there are only a couple of them left and they've been given no direction.  And they've had their payroll late and delayed several times already.
> 
> It sounds like JT and RK are still at the wheel of this bus.  Very disturbing.
> 
> And by the way, no one is buying this club and all of us, and all of the homes in 30 days.  Impossible.



I didn't mean that as a shot at the planners themselves, because I know full well that they have a handful doing the job of many. I just find it amusing that ADDITIONAL service is being offered from its already delpeted fleet.

And I'm not sure about the JT & RK conspiracy theories. Did you notice that this is the first missive WITHOUT JT's signature at the end? I think this is CapSource's game now. 

As for a buyer stepping up before DIP dries up, it's really a matter of what CapSource is willing to concede here. If any club wants a chance at all -- or most -- of UE's 1200 the time to act is while it's still under Chapter 11 (as was the case with 650 of the 750 T&H members going to UR, no?).

Either way, while I did have a late November stay booked at one of the 70 properties still around, I went ahead and made alternate reservations this afternoon because we can't count on anything after October 19.


----------



## HereWeGoAgain

Desties said:


> And I'm not sure about the JT & RK conspiracy theories. Did you notice that this is the first missive WITHOUT JT's signature at the end? I think this is CapSource's game now.



Slightly disagree.....I fear JT is using his leverage with CapSource ("do what I want or I'll do a CH7 and you won't even get to have any control") to stay in some amount of control here.  CapSource can't get a real role in decisons until a Court gives them that right...the whole idea of the US Bankruptcy code is to protect debtors, not creditors...and I imagine JT is taking full advantage of that.

Let's hope the CRO steps up at some point.  Right now, they should be embarrassed by the comparison with the CRO in the T&H BK since she ran conference calls, took control and got McGrath out of the operations, and kept members informed.  These guys have done nothing to make members supportive.


----------



## HereWeGoAgain

*From the www.ultimatemembers.org web site*

And probably a pretty good guess.....

*Posted by : uesigmember*


_"Pretty obvious that JT is still in charge and rumors floating he "cut a deal" for cash and authority during this process. Even the CRO not sending out this communication directly is a tell tale sign. People are going to be, or should be, quite irate that JT or RK or any of that high paid team has anything to do with this process anymore, especially if they continue to get paid.

All they are doing by interjecting themselves is hurting the sale process and any and all viable alternatives to come to the table by depleting value. No one in their right mind is going to bid on the company, share their thoughts or ideas which help us with them still being around.

Too bad the CRO doesnt have a conference call memo out already like the last time we lost our cash and say basically the same thing "I am in charge, they (JT,RK, etc) are gone and I am here to help you.

Big, big fumbling of the ball here. Accordingly, I'd expect the next 30 days to be a disaster."_


----------



## Boccalu

Have been lurking for a while. Posting now that the fat lady has sung...

JT and RK are the lowest of the low. They did all they could to mislead members and coax (extort) money from anyone they could . They did almost nothing (nothing that I can think of anyway) that evidenced concern for members anywhere in this process. Thier modus operandi was akin to a highway robber; taking your vacations and sunk costs hostage and demanding additional money to allow you to see them again.

They felt no remorse in continuing to take fat salaries as they drove the bus into a wall. As someone who started a business and felt I owed it to my investors to work for subsistence wages when times were tough, thier lack of willingess to share our pain was what caused me to balk at the asessment and forgo what had been a great experience.

The UE saga has convinced me that the DC model just cannot work. I know that one of my primary motivations for joining was the thought that "I can't own and maintain one vacation property for what this is going to cost me and with the DC I'll get mutiple properties in multiple locations with incredible service." In the back of my mind a voice told me this was too good to be true and, alas, it was. 

Obviously JT and RK's self dealing hastened UE's demise. But do the rest of you actually believe a DC can be run in such a way as to provide the experiences we have all gotten use to and remain solvent (never mind profitable) unless prices rise well beyond what most of us would be willing to pay?


----------



## TarheelTraveler

*Bankruptcy Petition*

I took a brief look at the UE bankruptcy petition and list of creditors.

Lists $10-50M in estimated assets and $100-500M in estimated debts. 

Some of the biggest unsecured creditors are Trump NY, lawyers (two with around 300-400K in fees (I'm guessing at least in part related to the potential deal with Quintess)), and 5 or 6 members that litigated and settled.  I assume it does not include all litigants, because if IIRC, some of those settling members were smart enough to get assets set aside to satisfy their settlements from the sale of houses.

Interesting to see the pretty generous settlements that folks were able to obtain.


----------



## Torn and Frayed

Boccalu said:


> Have been lurking for a while. Posting now that the fat lady has sung...
> 
> JT and RK are the lowest of the low. They did all they could to mislead members and coax (extort) money from anyone they could . They did almost nothing (nothing that I can think of anyway) that evidenced concern for members anywhere in this process. Thier modus operandi was akin to a highway robber; taking your vacations and sunk costs hostage and demanding additional money to allow you to see them again.
> 
> They felt no remorse in continuing to take fat salaries as they drove the bus into a wall. As someone who started a business and felt I owed it to my investors to work for subsistence wages when times were tough, thier lack of willingess to share our pain was what caused me to balk at the asessment and forgo what had been a great experience.
> 
> The UE saga has convinced me that the DC model just cannot work. I know that one of my primary motivations for joining was the thought that "I can't own and maintain one vacation property for what this is going to cost me and with the DC I'll get mutiple properties in multiple locations with incredible service." In the back of my mind a voice told me this was too good to be true and, alas, it was.
> 
> Obviously JT and RK's self dealing hastened UE's demise. But do the rest of you actually believe a DC can be run in such a way as to provide the experiences we have all gotten use to and remain solvent (never mind profitable) unless prices rise well beyond what most of us would be willing to pay?



So BestHC pursuant to page 3, paragraph 4 of our Settlement Agreement with the various entities know collectively as "Ultimate Escapes", you and I are now free to disclose our "Confidential Information". I will gracefully yield the floor... .  Thank you for being relatively reticent to this point. 

P.S. If you do not still have the draft complaint, I do.


----------



## Leonardo

TarheelTraveler said:


> I took a brief look at the UE bankruptcy petition and list of creditors.
> 
> Interesting to see the pretty generous settlements that folks were able to obtain.



*Tarheel*, when you say these were 'generous settlements', what are you basing that on?  I know you followed many of these lawsuits, but do you know how the settlements compared to the deposits these members put down?  For example, the largest creditor from a legal settlement was for $231K, then next largest was $171.7K, then $152K, etc; all of which may well have been significantly less then they were owed... Can you comment further???


----------



## TarheelTraveler

Leonardo said:


> *Tarheel*, when you say these were 'generous settlements', what are you basing that on?  I know you followed many of these lawsuits, but do you know how the settlements compared to the deposits these members put down?  For example, the largest creditor from a legal settlement was for $231K, then next largest was $171.7K, then $152K, etc; all of which may well have been significantly less then they were owed... Can you comment further???



I don't remember the deposits that were put down.  Seemed like they varied pretty significantly.  However, they were certainly settled for a lot more than "nuisance value."  IMHO, it shows you what the lawyers thought they were worth based on the facts of those cases.


----------



## AKTHUE

Leonardo said:


> *Tarheel*, when you say these were 'generous settlements', what are you basing that on?  I know you followed many of these lawsuits, but do you know how the settlements compared to the deposits these members put down?  For example, the largest creditor from a legal settlement was for $231K, then next largest was $171.7K, then $152K, etc; all of which may well have been significantly less then they were owed... Can you comment further???



If they were unsecured, they may be worth 0


----------



## TarheelTraveler

AKTHUE said:


> If they were unsecured, they may be worth 0



I agree with you.


----------



## BestHC

Torn and Frayed said:


> So BestHC pursuant to page 3, paragraph 4 of our Settlement Agreement with the various entities know collectively as "Ultimate Escapes", you and I are now free to disclose our "Confidential Information". I will gracefully yield the floor... .  Thank you for being relatively reticent to this point.
> 
> P.S. If you do not still have the draft complaint, I do.



  You are far more eloquent than I...feel free to share


----------



## ClubsRDead

AKTHUE said:


> If they were unsecured, they may be worth 0



As I recall, these were agreed upon settlement amounts for various claims based on non-refunded deposits.  The problem is, they didn't get paid, they just agreed on a settlement amount.  Unless they have a claim tied to any of the assets pari passu with the lender, they've just been moved to the unsecured pool.  The fact that they're listed in the category of "largest unsecured's" tells you what the outcome is going to be......zero dollars recovery.


----------



## DCworker

Aladdin69 said:


> As a former employee, I'm surprised that you didn't consider us??
> 
> Most of us know about the "sweetheart deals", they cooked up with friends and fellow investors etc... the favorable leases for their own personal properties, or those of their friends etc... cash back at closings for overpayment on properties... on n on!!



Hey i didnt discount the members nor do i you all paid our bills.  and yes plenty of under the table deals, Jim personal candlewood lake house, rich's golf places and breckenridge.  all their friends getting free memberships and the best bookings.  company leased bentleys.  they used every vendor and didnt pay them and made us make excuses for them when the bills went to collections.  they missed payrolls numerous times but kept giving themselves raises.  and they laughed about members who bought company stock some of you dummies did.  in the old days rich k wouldnt take pay to make sure bills got paid but once he got around jimmy t and saw how he operated he started doing the same thing, me me me.  you guys always talk about member groups and lawyers but youve never beaten these folks down.  you know what happened you said it above do something about it and then supoena the employees the right way to get them to testify.  hey the rest will be out of jobs soon so make them a sweetheart deal too and probably will sing like birds.


----------



## Aladdin69

DCworker said:


> Hey i didnt discount the members nor do i you all paid our bills.  and yes plenty of under the table deals, Jim personal candlewood lake house, rich's golf places and breckenridge.  all their friends getting free memberships and the best bookings.  company leased bentleys.  they used every vendor and didnt pay them and made us make excuses for them when the bills went to collections.  they missed payrolls numerous times but kept giving themselves raises.  and they laughed about members who bought company stock some of you dummies did.  in the old days rich k wouldnt take pay to make sure bills got paid but once he got around jimmy t and saw how he operated he started doing the same thing, me me me.  you guys always talk about member groups and lawyers but youve never beaten these folks down.  you know what happened you said it above do something about it and then supoena the employees the right way to get them to testify.  hey the rest will be out of jobs soon so make them a sweetheart deal too and probably will sing like birds.


Now you're talking !! I have been hearing these stories from members, planners, local hosts, and several disgruntled former employees....and even a former girlfriendof one of the "boys"!!! You are 100% correct...We must "man up", and take these rats to task!! Money is gone, but we can at least attempt to regain some dignity by putting these guys away for a while...and taking away their "toys"!! That goes for Mr Tom McMillen as well and his band of Wall Street thieves!!!! Check out his situation, benefits, pay offs, and you'll see CONSPIRACY...written all over the place!!!
1200 members...$500.00 each, would make a nice pay day for some good criminal lawyer to get the ball rolling!!! Depose everyone ....Follow the money!!! We all know something!!


----------



## EOD

The comp and benefits stuff is fair warning for the rest of us in surviving dc's.   Are these guys keeping us afloat to keep milking the members of their cash or are they legitimately putting in LT plan.   Looking at executive list at Q, we sure have a lot of guys between the various clubs.


----------



## TarheelTraveler

Good Luxist article from Susan Kime on the UE bankruptcy:

http://www.luxist.com/2010/09/21/another-destination-club-bankruptcy-the-latest-on-crisis-and-op/

I'm actually a little surprised how much info. is on the UE website now about the bankruptcy.  At least that's an improvement from how Lusso did things.


----------



## TarheelTraveler

*ER's Trial Offer*

Article on ER's Trial Offer to UE members:

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

"Available exclusively to Ultimate Escapes members, a one-year limited trial offer has been created, allowing for 10 days of vacation for $14,900. Members are able to make one Advanced Reservation for up to seven of their vacation days with the remaining balance used as a Space Available Reservation. The 10 nights must be used by December 15, 2011.

To not cannibalize availability for existing club members, Exclusive Resorts is only making 100 of these limited trial offers available. Members that do take advantage of this opportunity and enjoy the Exclusive Resorts experience will be able to have 100% of their one-time fee credited towards their membership purchase if they join before September 30, 2011."


----------



## Desties

Unbelievable. 

ER's lifeboat is a dues-only plan for 10 days at a 50% markup? The 10-day member plan is just $9,995. Did ER discountinue the "Sponsored Guest" program, because that would even be cheaper? After that, it's join at the published rate (minus the $14,900) or bye-bye. 

I was really hoping that ER would sieze this opportunity. I don't think it will have to worry about the 100-member cap taking this offer. I'm starting to think that PE/UE was my first and last destination club.


----------



## SciFrog

Don't you guys get it?
Why would the other clubs make the same mistake UE made with TH?


----------



## Desties

SciFrog said:


> Don't you guy get it?
> Why would the other clubs make the same mistake UE made with TH?



Was it a mistake to add 650 club members overnight? Was it a mistake for Q to add 50 Lusso refugees overnight? The thing is, I can't think of a single fellow UE member who wants to jump right back into another non-equity club if it means paying a deposit, even if it means paying just $50k to Q or a deposit minus $15k after a year for ER. 

The $14,900 year offer is a joke, because it's just $10k worth of nights -- and that is a lot LESS than what ER spends in member acquisition costs. 

We're low-lying fruit and the club offers are still missing.


----------



## Jack1234

As long as none of us jumps at these absurd offers they will only improve.  As several folks have said, "no need to rush"....


----------



## SciFrog

How many times will we need to say lusso was different because Q already had bought the homes? Also only 50 lusso members vs 450 existing Q, and still 3 in one out clause.


----------



## Kagehitokiri2

*SciFrog*, seriously? the mistake was ~$100mm loan.

99% sure ER still has sponsored trips, so... although i guess the point is youre not limited to certain destinations, and can break it down however you want? could see if castello di casole is available or something. for it, rental rates start at 2K euros.


----------



## Buon Viaggio

The offer seems true to form for ER.  They've always been fairly conservative and they let the product speak for itself.  Sure, the UE meltdown could be a great opportunity for a club like ER but to come up with an offer that UE members might really jump on but may not be fiscally prudent for the club.  ER doesn't need new members to stay on course, contrary to all the posts lately that insist that non-equity clubs must have new members to survive.  ER has trimmed expenses and they are living within their means.  The dues are now set to achieve break-even on schedule and to survive.  I'm sure they would welcome new members from any club but they are thinking long-term survival.  Regarding this offer, the price seems somewhat inflated but at least it is applicable to a membership deposit.


----------



## SciFrog

Too much deposit money spent, no real financial backing...


----------



## Desties

SciFrog said:


> Too much deposit money spent, no real financial backing...



I hear ya, but do you think the Q and ER board rooms really think this through. I mean, why make these offers at all? They have to know that they're not going to stick with a crowd of 1200 of the most jaded luxury vacation travel customers. 

The gap between what's feasible to offer and what's reasonable to accept is wide. Does that mean that the clubs let 1200 scarred travelers walk? 

It would be a first.


----------



## Buon Viaggio

It's the dampening effect of this rotten economy.  There could be just a handful of UE members who actually land in another club.


----------



## NeilGoBlue

Desties said:


> Was it a mistake to add 650 club members overnight? Was it a mistake for Q to add 50 Lusso refugees overnight? The thing is, I can't think of a single fellow UE member who wants to jump right back into another non-equity club if it means paying a deposit, even if it means paying just $50k to Q or a deposit minus $15k after a year for ER.
> 
> The $14,900 year offer is a joke, because it's just $10k worth of nights -- and that is a lot LESS than what ER spends in member acquisition costs.
> 
> We're low-lying fruit and the club offers are still missing.



The numbers just don't work without a deposit or enough of a dues markup to compensate for MGMT putting up the equity to buy the house to be able to rent...


----------



## ClubsRDead

NeilGoBlue said:


> The numbers just don't work without a deposit or enough of a dues markup to compensate for MGMT putting up the equity to buy the house to be able to rent...



That I totally agree with.  Which means the Q offer sucked, the ER offer sucks even more (and is probably just using the inventory they're trying to sell) and anything from AK will certainly have more teeth to it, right?  Because if they next kick out an "offer" that contemplates no cash per member, then what?


----------



## NeilGoBlue

I certainly wouldn't support it.. And I don't think it's likely.. there is not much access inventory. (the only way it make sense is if there is access inventory) They might try some trial program... but nothing that won't involve a deposit at sometime in the next 18 months.. That's my guess.. but I don't have any inside info...

And, realistically, AK Residence club is not set up to take on 100s of members.  AK corporate could probably handle it, but that would take a major shift of resources...


----------



## ClubsRDead

That I would agree with.  It would seem if you're an AK equity holder there would be direct disadvantages to having a bunch of lesser paying members storm your club.  On the flip side, not sure what "shift of resources" means but AK Corp can't just move or allocate dollars from the AKRC, can they, because you all own the club?

Regarding the ER offer, I guess I can't figure out what the appeal would be to pay them $15k for something that I could get for $10k off of the shelf.  How is that supposed to excite me as a UE member?

The Q offer, while probably quite unsustainable at least removed the entry to barrier, ie if I under normal circumstances was looking to join Q, then this was a discount.  The ER one, I don't know if either party benefits, but that may be why they put it out in the first place.


----------



## ClubsRDead

http://www.orlandosentinel.com/business/os-ultimate-escapes-bankruptcy-20100921,0,3160855.story

Oh, so big Rich and Jim, you've been "trying to sell the company."  It's obvious what your intentions were all along, run up the debt, get a bunch of equity, do an IPO and cash out.  But to see it in print just rubs me wrong.

This is a classic story in JT's hometown (that refers to them as "luxury time share") because it captures the essence of the entire problem - you both have been trying to bone us and send us on down the road for some time now.

Not that we'd follow, listen or believe - but somewhat strange you can't at least get a statement out of the company lawyer or CEO that is something like "we're working hard to preserve the business and our members travel," or "find a solution to our financing problems."

You both just start sucking more every single day...


----------



## NeilGoBlue

ClubsRDead said:


> That I would agree with.  It would seem if you're an AK equity holder there would be direct disadvantages to having a bunch of lesser paying members storm your club.  On the flip side, not sure what "shift of resources" means but AK Corp can't just move or allocate dollars from the AKRC, can they, because you all own the club?
> 
> Regarding the ER offer, I guess I can't figure out what the appeal would be to pay them $15k for something that I could get for $10k off of the shelf.  How is that supposed to excite me as a UE member?
> 
> The Q offer, while probably quite unsustainable at least removed the entry to barrier, ie if I under normal circumstances was looking to join Q, then this was a discount.  The ER one, I don't know if either party benefits, but that may be why they put it out in the first place.



I was speaking more of 'people' resources.  If we add 300 UE members, we would have to shift people assets from corporate over to the residence club.  It could be done, but wouldn't be pretty...


----------



## Desties

I certainly don't expect sweeter offers on the equity side. 

It's finally dawning on me that NO club is going to belly up to the bar with the kind of offer to take more than a dozen or so of us. The only way this ends without 1200 members going their separate ways is if an entity outbids CapSource for the club. 

New brand (if it's a hospitality company), new leadership, new cost structure that makes sense. Even if Q or ER are the ones to buy UE in bankruptcy and build on the 70 homes, it would probably have to be to let the 3-tier model coast on its own -- apart from teh club (which appears to be exactly what Q was thinking, since last week's offer made it seem as if the 3-tier plan at Q was already going to happen).


----------



## ClubsRDead

Desties said:


> I certainly don't expect sweeter offers on the equity side.



Nor should we, right?  A true equity offering is going to require a capital commitment.  If it doesn't, it will fail.



Desties said:


> It's finally dawning on me that NO club is going to belly up to the bar with the kind of offer to take more than a dozen or so of us. The only way this ends without 1200 members going their separate ways is if an entity outbids CapSource for the club.



If anyone outbids Cap Source then you can expect the same fate we face now.  No one is that dumb.  



Desties said:


> New brand (if it's a hospitality company), new leadership, new cost structure that makes sense. Even if Q or ER are the ones to buy UE in bankruptcy and build on the 70 homes, it would probably have to be to let the 3-tier model coast on its own -- apart from teh club (which appears to be exactly what Q was thinking, since last week's offer made it seem as if the 3-tier plan at Q was already going to happen).



Agree, new structure, faces and money.  But don't think anyone logical would go down the road of 3-tiers.  Too much asset individualization and hard to service in the destinations.  The barriers need to be removed between the clubs.


----------



## brit007

*Corporate office in Orlando*

Has anybody heard that this has been closed?


----------



## AKTHUE

ClubsRDead said:


> But don't think anyone logical would go down the road of 3-tiers.  Too much asset individualization and hard to service in the destinations.  The barriers need to be removed between the clubs.



I totally agree about the tiers. Nothing wrong with having a mix of larger and smaller properties at the same locations, and members can reserve what they need for a given trip. Maybe the smaller ones have better availability as the large ones get booked further ahead of time for more significant trips. If necessary, have a variable cleaning fee, or even a variable per night fee in place of a portion of dues to encourage members to reserve the size they need. Or create some currency where bigger/more expensive units cost more credits than smaller/cheaper ones. But make it possible and easy for all members to use all properties. 

Unless a club makes us a no-risk offer (which of course means they don't have the capital to buy homes), I cannot see joining any non-equity club ever again. 

I don't think the root cause of the UE collapse was the economy. While the economy was a contributing factor, and with a good economy perhaps it wouldn't have collapsed, the underlying problems of the UE collapse were that management didn't have a business plan that they managed to, and made adjustments when needed, and that management was too focused on their own personal rewards and chasing financial upside, rather than building a sustainable business.

At its core, in a non-equity DC, members have a put a lot of money at risk, but the finanical upside belongs to the owners/investors and management. The inherent conflict is far too great. Even in an equity DC with a for-profit, non-member-controlled manager that conflict still exists, but is more measured, especially if the contract with the manager can be terminated by a member board after a certain number of memberships are sold or after a certain period of time.


----------



## AKTHUE

brit007 said:


> Has anybody heard that this has been closed?



It would make sense to close it since most of the operatios in in KC. The Orlando office is for JT convenience (and leased from him too). Don't need it anymore.


----------



## OneMoreTime

Orlando will be the last office to close because JT will be the last employee. He does not have the dignity to leave the room. Look at the DIP funding- they are paying that lease, and his payroll.


----------



## ClubsRDead

While I wouldn't encourage anyone to just run out and join Q under the terms of the offer we received last week - I don't think we've heard the last of them.  It appears that the attempt by JT / UE to get a restraining order on Q in court was rejected today by the Judge.

Turns out JT and company either borrowed or owe some money to Q, and subject to repayment terms, which they violated (short for "didn't pay,") just like everyone else on this planet -- Q was given the ability to market the membership or a portion thereof.

Way to go JT -- what did you use that money for??


----------



## DCTraveler

*Protecting Director Assets in Troubled Times*

Hello Again Everybody!  Here is the profile of the guy supposedly doing the restructuring.  In case anybody was working with the thought that possibly they were trying to do the right thing and save the club or our deposits -- they are not.  If you look at Sheon Karol's speciality (he just wrote a book about it) it is *Protecting Director Assets in Troubled Times*.  They are using our money to pay him to protect all of their money.  Perfect!  Thanks Rich and Jim!!!

DC Traveler

Sheon Karol


Sheon Karol has a unique combination of turnaround, executive and legal experience spanning more than 20 years, with an emphasis on out-of-court restructurings, bankruptcy proceedings and mergers and acquisitions. Mr. Karol is an innovative, collaborative leader with expertise in a wide variety of industries, including:
•	Agriculture 
•	Commodities 
•	Consumer goods 
•	Food and grocery	•	Medical research 
•	Real estate 
•	Retail
A seasoned executive, Mr. Karol has led several prominent restructuring engagements and played an essential role in numerous others. He has served in several management and interim management positions, such as chief restructuring officer (CRO) and senior vice president. In addition, he has renegotiated the debt of companies in a variety of industries. Noteworthy engagements include:
•	Financial advisor to Grupo Mexico in its successful retention of equity in ASARCO's contested confirmation hearing 
•	CRO of a $1 billion private company 
•	Managed more than $200 million in asset sales for an $8 billion supermarket chain in Chapter 11, where he successfully sold 326 stores in a 90-day period and directed claims reconciliation after the company emerged from bankruptcy 
•	Provided general bankruptcy advice and managed operations for the restructuring of certain business units affiliated with a $250 million medical diagnostic company 
•	Guided the auction and sale of a $12 billion farm cooperative’s nitrogen fertilizer business, netting $25 million more than the stalking horse bid 
•	Senior vice president, general counsel and the board secretary of a national kitchen and housewares retailer with more than $400 million in annual sales 
•	The Caldor Corporation, a 145-store discount retailer, with approximately $3 billion in annual sales
Prior to his corporate experience, Mr. Karol was a lawyer with a leading New York firm. His practice focused on mergers and acquisitions, private placements, securities, financing, bankruptcies and workouts.
Mr. Karol holds a bachelor’s degree from Yeshiva College and his juris doctorate from Yale Law School. He is a frequent speaker at restructuring and legal conferences and *recently co-authored “Protecting Director Assets in Troubled Times” in The Corporate Board.*


----------



## Kagehitokiri2

the article >
http://www.crgpartners.com/files/news/CorporateBoard.KarolFinz.pdf


> Protecting Director Assets
> In Troubled Times by Sheon Karol and David Finz
> Two years of economic turmoil have led some companies to extreme survival measures, including bankruptcy, mergers and major restructurings. Hard times not only endanger companies, but their directors and officers as well. Liability threats increase, often at the same moment a major corporate change puts board members’ insurance coverage in peril. What can directors do to protect themselves while protecting the company?



someone just sent me the thing from CRO to UE members. definitely interesting - timing, wording, etc.

from Q


> The Club's La Samanna enclave is a huge hit among Members. We initiated the enclave with two villas, Colibiri and Fregate, and are now opening two additional villas, Pelican and Egrette, for Member stays beginning Saturday, January 8, 2011.


----------



## ClubsRDead

Sounds about right.  No wonder he got bent over this past weekend by the board of managers and equity holders.  Who knows, maybe he conspired with them and got their board payments, payroll and even anticipated board legal fees covered in the DIP because this is his specialty.  Also explains his weak attempts at emailing us acting like he is in charge OF THE BANKRUPTCY, only, because he's certainly not in charge of the company.  Too bad no one is in charge of member reservations and accommodations.


----------



## Desties

I got the La Samanna email -- and I have NEVER received email from Quintess. 

I'm fairly sure that Q must have raided all of the UE contacts, because the email I got it is rarely used (outside of UE-related emails). 

I'm guessing that Q had all 1200 member infos, and then cherry picked the 200 or so most likely to fall for last week's offer. It wouldn't surprise me if we ALL get a sweetened offer. 

Is there a UE member that did NOT get the Q email about an hour ago about the new enclave properties?


----------



## Baily

Is there a UE member that did NOT get the Q email about an hour ago about the new enclave properties?[/QUOTE]

I did not receive the offer...but I'm sure it's because I'm still PE...


----------



## ClubsRDead

Baily said:


> Is there a UE member that did NOT get the Q email about an hour ago about the new enclave properties?



I did not receive the offer...but I'm sure it's because I'm still PE...[/QUOTE]

You're not missing anything.  The BS offer to join last week was one thing, supposedly to about 200 or so.  The mailer tonight was just a mass mailer to members (or prospects, I assume) announcing new properties.  Have to hand it to Q and the folks at Club Holdings; they're timing on everything is right on...


----------



## Nwtm74a

*Q offer*

I received an e-mail from Q tonight.  I have never had any contact with them before.  I'm legacy UR.


----------



## ClubsRDead

Nwtm74a said:


> I received an e-mail from Q tonight.  I have never had any contact with them before.  I'm legacy UR.



I think it's fair to say we're all going to get all sorts of emails now.  Don't be surprised about having no prior contact, they already had all of our info as part of the mismanaged JT / RK process related to the sale of a property in NYC that we still owed them money on for the closing.

And, even M Residence Club emailed me tonight - latest offer, "six months of free dues."  The curse of the McGrath days right there....

We're all fair game now.  Sure as hell JT doesn't have a plan to salvage this.

Maybe we all sue him / RK  for distributing our confidential info...


----------



## TarheelTraveler

*UE vs. Quintess*

http://www.bloomberg.com/news/2010-09-22/lehman-abitibi-ultimate-escapes-sea-island-bankruptcy.html

"Ultimate Escapes Sues Competitor Club Holdings 

Ultimate Escapes Inc., the destination club operator that filed for Chapter 11 protection on Sept. 20, started a lawsuit yesterday against Club Holdings LLC, one of its competitors. 

The complaint says that the two companies entered into a confidentiality agreement in April allowing Club Holdings, based in Broomfield, Colorado, to investigate the possibility of an acquisition. The complaint alleges that Club Holdings, operating as Quintess, used information obtained through the confidentiality agreement to solicit about 200 of Ultimate Escapes’ members. 

Ultimate Escapes wants the bankruptcy judge in Delaware to sign a temporary restraining order halting use of the customer lists. The company contends contacting customers violates the confidentiality agreement and the so-called automatic stay resulting from the Chapter 11 filing. 

The complaint also alleges Club Holdings received a fraudulent transfer. The basis for the allegation isn’t known because the complaint was redacted to blank out relevant allegations. 

Ultimate Escapes, based in Kissimmee, Florida, intends to sell the business to secured lender CapitalSource Finance LLC unless a better offer turns up at auction on Oct. 20. It owns or leases 119 residences in 45 destinations and has about 1,250 members. The June 30 balance sheet had $189 million in assets against total liabilities of $222 million. 

The case is In re Ultimate Escapes Holdings LLC, 10-12915, U.S. Bankruptcy Court, District of Delaware (Wilmington)."


----------



## ClubsRDead

From Kage re Sheon's profile:  _"Hard times not only endanger companies, but their directors and officers as well. Liability threats increase, often at the same moment a major corporate change puts board members’ insurance coverage in peril. What can directors do to protect themselves while protecting the company?"_

This is interesting.  Certainly fits with what CRG is not doing to further the club business and cater to mgmt and board demands.  Look at the DIP cash sheet, they have about 300k in there for D&O Tail Coverage, and allowed for $50k of legal for the board.  Think they are expecting the worst?


----------



## Aladdin69

*Divide and Conquer!!*

:zzz: Like most of you...I sit here each night watching the posts fly back n forth...always wondering where is the ANGER, where is the frustration, where is the the togetherness that we all need right now?? We're drowning...and you're describing the water? Shouldn't we be banding together to try and come up with some course of action...instead of sitting here and analyzing what happened?? We all know what happened!! Kinda hate to admit it, but we all sat back and watched as Jimmy Boy & Co., picked our pockets...over and over again!! I guarantee he had us all rated as to how gullible each of us really were! Probably ...those were the first recipients of Q's, first offers? We've heard from DCWORKER,  about mismanagement etc... Sweetheart Deals, leased Bentleys ...on n on!! Now, he's got the Fox watching the Hen House!!! How about we all get off the Pot...hire some representation collectively, and stand up for our interests?? Jimmy has successfully kept us apart for years now...even buying the DC4M site, to keep us from banding together and sharing information...WHY??? Because he's scared of us organizing our efforts, and kicking his teeth in!! Let us do just that...It won't be easy...but it will be worth it... Otherwise...Jimmy Boy, and friends are going to slip away into the night, while we all sit here and analyze offers and equations, and speculations....These guys know what they're doing , and they're about to get away with it!!! With a small check, and less effort than we all put into these posts...we can at least begin the discovery process! If it looks promising, and I think it will...we can move forward with some formal action against those that are culpable?    It doesn't look like any of us are going to get any $$$, out of this, so let's make sure JT, & Co...don't either!!!


DCTraveler said:


> Hello Again Everybody!  Here is the profile of the guy supposedly doing the restructuring.  In case anybody was working with the thought that possibly they were trying to do the right thing and save the club or our deposits -- they are not.  If you look at Sheon Karol's speciality (he just wrote a book about it) it is *Protecting Director Assets in Troubled Times*.  They are using our money to pay him to protect all of their money.  Perfect!  Thanks Rich and Jim!!!
> 
> DC Traveler
> 
> Sheon Karol
> 
> 
> Sheon Karol has a unique combination of turnaround, executive and legal experience spanning more than 20 years, with an emphasis on out-of-court restructurings, bankruptcy proceedings and mergers and acquisitions. Mr. Karol is an innovative, collaborative leader with expertise in a wide variety of industries, including:
> •	Agriculture
> •	Commodities
> •	Consumer goods
> •	Food and grocery	•	Medical research
> •	Real estate
> •	Retail
> A seasoned executive, Mr. Karol has led several prominent restructuring engagements and played an essential role in numerous others. He has served in several management and interim management positions, such as chief restructuring officer (CRO) and senior vice president. In addition, he has renegotiated the debt of companies in a variety of industries. Noteworthy engagements include:
> •	Financial advisor to Grupo Mexico in its successful retention of equity in ASARCO's contested confirmation hearing
> •	CRO of a $1 billion private company
> •	Managed more than $200 million in asset sales for an $8 billion supermarket chain in Chapter 11, where he successfully sold 326 stores in a 90-day period and directed claims reconciliation after the company emerged from bankruptcy
> •	Provided general bankruptcy advice and managed operations for the restructuring of certain business units affiliated with a $250 million medical diagnostic company
> •	Guided the auction and sale of a $12 billion farm cooperative’s nitrogen fertilizer business, netting $25 million more than the stalking horse bid
> •	Senior vice president, general counsel and the board secretary of a national kitchen and housewares retailer with more than $400 million in annual sales
> •	The Caldor Corporation, a 145-store discount retailer, with approximately $3 billion in annual sales
> Prior to his corporate experience, Mr. Karol was a lawyer with a leading New York firm. His practice focused on mergers and acquisitions, private placements, securities, financing, bankruptcies and workouts.
> Mr. Karol holds a bachelor’s degree from Yeshiva College and his juris doctorate from Yale Law School. He is a frequent speaker at restructuring and legal conferences and *recently co-authored “Protecting Director Assets in Troubled Times” in The Corporate Board.*


----------



## Kagehitokiri2

TarheelTraveler said:


> Ultimate Escapes Inc., the destination club operator that filed for Chapter 11 protection on Sept. 20, started a lawsuit yesterday against Club Holdings LLC, one of its competitors.
> 
> The complaint says that the two companies entered into a confidentiality agreement in April allowing Club Holdings, based in Broomfield, Colorado, to investigate the possibility of an acquisition. The complaint alleges that Club Holdings, operating as Quintess, used information obtained through the confidentiality agreement to solicit about 200 of Ultimate Escapes’ members.
> 
> Ultimate Escapes wants the bankruptcy judge in Delaware to sign a temporary restraining order halting use of the customer lists. The company contends contacting customers violates the confidentiality agreement and the so-called automatic stay resulting from the Chapter 11 filing.
> 
> The complaint also alleges Club Holdings received a fraudulent transfer. The basis for the allegation isn’t known because the complaint was redacted to blank out relevant allegations.



uh


ClubsRDead said:


> It appears that the attempt by JT / UE to get a restraining order on Q in court was rejected today by the Judge.
> 
> Turns out JT and company either borrowed or owe some money to Q, and subject to repayment terms, which they violated (short for "didn't pay,") just like everyone else on this planet -- Q was given the ability to market the membership or a portion thereof.
> 
> Way to go JT -- what did you use that money for??


source?

clearly this is going to get ridiculous. 

from same article as above, re sea island resort (with ER enclave)


> An auction for the properties is scheduled to take place on Oct. 11. A company affiliated with Oaktree Capital Management LP and Avenue Capital Group is under contract to buy the business for $197.5 million. The properties are on or near St. Simons Island and Sea Island, Georgia.


----------



## TarheelTraveler

*UE*

A lot of filings in the bankruptcy case.  I took a brief look and thought a number of things were interesting.

The hearing for the temporary restraining order and preliminary injunctive relief against Club Holdings (Quintess) is scheduled for September 29.

UE is trying to file the member information under seal, so that competitors can't poach the information.  (Of course, it also makes it harder for members to communicate with each other.)

Some budgeted expenses for the next month.  Directors and officers' tail coverage (i.e., continuing coverarge) - 265K.  Over $1M in professional fees.  It's clearly expensive to do a bankruptcy filing, particularly one with this complexity.

4 potential buyers submitted letters of interest in buying all or part of the UE assets.


----------



## Desties

TarheelTraveler said:


> 4 potential buyers submitted letters of interest in buying all or part of the UE assets.



Well, that part is certainly encouraging. 4 potential bidders is better than one or none -- and adds weight to the damage that Q is causing by attempting to poach some of us with direct offers and ALL of us with unsolicited marketing material. 

This is getting interesting.


----------



## DCTraveler

*I am pissed!*

Sorry if I gave the impression that I am not REALLY PISSED OFF at this situation.  I am.  I had hired legal representation about 6 months ago, but they wouldn't settle.  My attorneys were about to file and were given the heads-up of the bankruptcy, so they didn't think it was worth my money to go through that process if it was true and a few weeks later it turned out to be.

A couple of questions for those more legal minded than I am.  If they did something wrong (and they have) and we could prove it, then wouldn't their director's and officer's insurance kick in to pay us off?

If they have 222 million in liabilities and 188 million in assets, then wouldn't that mean they could liquidate and pay us back 85% of our deposits or am I getting that wrong?  I assume that our fully refundable deposits have to be included in the 222 million in liabilities, right?


----------



## willmyclubmakeit

*thoughts*

remember that the lenders have a security position in the assets first (at least capital source) and then there are people with the RAP payments but I would bet that most of the value if not all will go to Bankruptcy costs and the lenders with little if anything left unless some funds come from sources that you suggest like D&O.


----------



## Kagehitokiri2

in the list of creditors >


> CLUB HOLDINGS, LLC
> 11101 W. 120TH AVENUE
> SUITE 300
> BROOMFIELD, CO  8002


----------



## BestHC

DCTraveler said:


> Sorry if I gave the impression that I am not REALLY PISSED OFF at this situation.  I am.  I had hired legal representation about 6 months ago, but they wouldn't settle.  My attorneys were about to file and were given the heads-up of the bankruptcy, so they didn't think it was worth my money to go through that process if it was true and a few weeks later it turned out to be.
> 
> A couple of questions for those more legal minded than I am.  If they did something wrong (and they have) and we could prove it, then wouldn't their director's and officer's insurance kick in to pay us off?
> 
> If they have 222 million in liabilities and 188 million in assets, then wouldn't that mean they could liquidate and pay us back 85% of our deposits or am I getting that wrong?  I assume that our fully refundable deposits have to be included in the 222 million in liabilities, right?



The key is to find a way to start litigating some individuals personally....Your not getiing anything out of UE...Go for it


----------



## ClubsRDead

BestHC said:


> The key is to find a way to start litigating some individuals personally....Your not getiing anything out of UE...Go for it



An absolute waste of personal dollars at this point.  All the officers / directors, if sued personally will apply to the BK Court to have an automatic stay entered, which will more than likely be approved.  Basically it will give them protection from having their personal assets attached while the company is in 11, then presumably 7.  Sure, you can wait and then go after their personal "stuff" only to find all of it encumbered with lien holders just like our homes are with CS.  Plus, FL BK law provides additional protection for homeowners of that asset.  So, assume they are all judgement proof.  Maybe Healy isn't, maybe not even JT, RK and PC to the full extent, but collection would be about as likely that you'll receive any value for your claim as an unsecured creditor.

Now, the criminal route is always one way to go - and usually works.  But, there will be no settlement from most D&O coverage for fraudulent acts.  Jail time is a strong possibility though, but that won't pay your lawyer or bring your deposit back.

In most BK cases, the estate itself or litigation trust immediately notices the D&O carrier, and tries to get the full claim amount.  Presumably in this case it will be a down the road CH 7 Trustee.

So, sometimes just taking them out in a dark alley and beating the sh*t out of them is about the best satisfaction one might receive...


----------



## Desties

DCTraveler said:


> If they have 222 million in liabilities and 188 million in assets, then wouldn't that mean they could liquidate and pay us back 85% of our deposits or am I getting that wrong?  I assume that our fully refundable deposits have to be included in the 222 million in liabilities, right?



DCT, I'm fairly sure that the only deposit-related items in liabilities is the RAP -- which is currently nil for T&H, less than two-thirds of original deposits from PE, and whatever fraction that native UR deposits had been amortized down to. 

At the end of the day, it's not a SECURED obligation, so we go behind the secured creditors (with CapSource being the biggie). 

And, no, I'm no tax pro either, so take that with a grain of salt, but it doesn't look good unless real estate prices skyrocket in the next few weeks to the point where there's anything left over after the secured creditors feed at the trough.


----------



## TarheelTraveler

BestHC said:


> The key is to find a way to start litigating some individuals personally....Your not getiing anything out of UE...Go for it



As CRD points out, a lot of it depends on if they're judgment proof and if you've got D&O insurance applicable (clearly the budget for the next month includes money for the insurance).  Certainly, a good number of Lusso members are after Steve Greer. Maybe a lawyer out there would take it on a contingency fee.


----------



## Aladdin69

My comments assume that our money is gone...  I have no doubt of that!
My feelings are simply to examine the actions of those empowered to run the company, and protect our interests, and determine if they may be guilty of any criminal acts, that may have led to our demise? They know how to play the BK game, and apparently have been considering it for some time...even when they were accepting your dues, and selling you stock? If we don't at least do some basic discovery....they will walk away from this SH** in much better shape then any of us:-(  Just imagine how good it would feel to see these crooks prosecuted for their crimes!!!
Is 500.00 , per member really too much to pay to see those cards??  Do any of us really think that all the victims here... wouldn't sing like birds to get a chance to put these guys away???  
"Don't get MAD...Get EVEN!!!!


----------



## Leonardo

Aladdin69 said:


> My comments assume that our money is gone...  I have no doubt of that!
> 
> Is 500.00 , per member really too much to pay to see those cards??  Do any of us really think that all the victims here... wouldn't sing like birds to get a chance to put these guys away???
> "Don't get MAD...Get EVEN!!!!



I'd gladly put up my share if there was a reasonable likelihood of either piercing the corporate veil and forcing them into personal bankruptcies and/or getting criminal charges filed...  And remember, in addition to personal satisfaction/revenge, if they are convicted of criminal acts (i.e. fraud) it turns our deposit losses into theft losses with much better tax consequences...


----------



## TarheelTraveler

Who in all of this protects the member's interests?  Please correct me if I'm wrong, but the CRO was hired by CapSource.  The members are creditors just like them, but in worse shape, because they're unsecured.  It seems like there should be an attorney representing the members.  Obviously, members don't want to flush another $500 down the drain, but it seems like that is a much better use of funds than buying shares or the dues that have been paid for the year.

Nice recap of the buyer situation for UE.

http://destinationclubnews.com/News_The_Potential_Buyers_Of_Ultimate_Escapes.php


----------



## Kagehitokiri2

latest phase of hybrid offering from karma
http://www.karmaresorts.com/phase-five/investment.html


> - 28 nights of free accommodation at any of the Karma resorts [DC style]
> - partnership with Quintess Luxury Vacation Club [DC partner - exchange?]
> - 3 year guaranteed rental program
> One Two Or Three Bedrooms available ... $350,000-$766,000


----------



## Aladdin69

Why not contact one or more of the attorneys that had some success against UE, representing the members? I think there are several...and they would already be up to speed on the issues, and may have already done some discovery work already! I think there was an Atty., from San Fransisco..Peter Ito, that was representing a large group of the refugee members?? If anyone knows any specifics, or has a suggestion....please publish it here
I agree with Leonardo....at least it may give us a better tax break?? 
That may be the only financial gain here, but the possibilities of actually putting the screws to JT, and RK...and anyone else that may have been a co-conspirator....PRICELESS!!!!!


----------



## Aladdin69

Why not contact one or more of the attorneys that had some success against UE, representing the members? I think there are several...and they would already be up to speed on the issues, and may have already done some discovery work already! I think there was an Atty., from San Fransisco..Peter Ito, that was representing a large group of the refugee members?? If anyone knows any specifics, or has a suggestion....please publish it here
I agree with Leonardo....at least it may give us a better tax break?? 
That may be the only financial gain here, but the possibilities of actually putting the screws to JT, and RK...and anyone else that may have been a co-conspirator....PRICELESS!!!!!


----------



## Aladdin69

Leonardo said:


> I'd gladly put up my share if there was a reasonable likelihood of either piercing the corporate veil and forcing them into personal bankruptcies and/or getting criminal charges filed...  And remember, in addition to personal satisfaction/revenge, if they are convicted of criminal acts (i.e. fraud) it turns our deposit losses into theft losses with much better tax consequences...


Why not contact one or more of the attorneys that had some success against UE, representing the members? I think there are several...and they would already be up to speed on the issues, and may have already done some discovery work already! I think there was an Atty., from San Fransisco..Peter Ito, that was representing a large group of the refugee members?? If anyone knows any specifics, or has a suggestion....please publish it here
I agree with Leonardo....at least it may give us a better tax break?? 
That may be the only financial gain here, but the possibilities of actually putting the screws to JT, and RK...and anyone else that may have been a co-conspirator....PRICELESS!!!!!


----------



## Torn and Frayed

Aladdin69 said:


> Why not contact one or more of the attorneys that had some success against UE, representing the members? I think there are several...and they would already be up to speed on the issues, and may have already done some discovery work already! I think there was an Atty., from San Fransisco..Peter Ito, that was representing a large group of the refugee members?? If anyone knows any specifics, or has a suggestion....please publish it here
> I agree with Leonardo....at least it may give us a better tax break??
> That may be the only financial gain here, but the possibilities of actually putting the screws to JT, and RK...and anyone else that may have been a co-conspirator....PRICELESS!!!!!




I could not agree more!  Peter Ito is a bankruptcy law specialist and is with the law firm of Gordon & Rees, LLP, that is well versed in civil litigation as well.  Gordon & Rees, LLP, has law offices throughout the country but Peter Ito is at the one located in Denver, CO. Phone # (303) 534-5160.


----------



## BetterClient

*Tax Losses for Fraud/Theft....*

I'm all in favor of getting favorable tax treatment on the loss of our deposits. Theft/Casualty losses are directly versus income as long as they are in excess of 5% of AGI. 

Think that can be done via a tax firm rather than a firm with DC experience. Given the disclosures of the last week-there was clearly a pattern of behavior here that provides safe harbor for the argument to be made.  


(Not tax advice, please consult your own CPA or Tax Lawyer)


----------



## acheson

*former/resigned ue members*

if you are a former/resigned ue members waiting in vain for your deposit return and are now an unsecured creditor wishing to pursue several litigation options with me email me at ach1944@gmail.com.


----------



## BetterClient

*My UE Wish List/Want List.......*

Want to be able to continue to travel

Want the club to be solvent coming out of this so we're not back in the soup in 3 or 4 years. 

Want the operations to be managed by a company that actually has experience running multiple destinations. Not interested in a younger, bolder version of Jimmy T or Professor Harold Hill. 

Member owned is a quaint idea-which member exactly would be making the decisions? What actual functional experience do they have running a far flung business enterprise such as this? The county club idea is nice-just way too many moving pieces to make it work under these circumstances. 

Want to be able to take a tax loss due to fraud. 

Want to be able to invest in the future of the club.

What do you want?


----------



## BestHC

Torn and Frayed said:


> I could not agree more!  Peter Ito is a bankruptcy law specialist and is with the law firm of Gordon & Rees, LLP, that is well versed in civil litigation as well.  Gordon & Rees, LLP, has law offices throughout the country but Peter Ito is at the one located in Denver, CO. Phone # (303) 534-5160.



   Hmmm..Sounds like you have some experience with this law firm


----------



## TarheelTraveler

*PE/UE Litigation*

Talk about bad timing.  There was a case filed on September 17 by Peter Jupp against PE, UE and Rich Keith.  Member alledgedly resigned on August 10, 2008, was supposed to get his money back on August 11, 2009, had been asking for a refund since then, hadn't gotten it, waited until September 17, 2010 to file a complaint, and then UE files for bankruptcy on September 20.  Good luck with trying to get that money.  Hope for the member that the case was done on a contingency fee arrangement.


----------



## travelguy

TarheelTraveler said:


> Talk about bad timing.  There was a case filed on September 17 by Peter Jupp against PE, UE and Rich Keith.  Member alledgedly resigned on August 10, 2008, was supposed to get his money back on August 11, 2009, had been asking for a refund since then, hadn't gotten it, waited until September 17, 2010 to file a complaint, and then UE files for bankruptcy on September 20.  Good luck with trying to get that money.  Hope for the member that the case was done on a contingency fee arrangement.



IIRC about my BR law, this and other member suits should be stayed by the BR filing regardless of the status.  Then again, I haven't been paying total attention to all the details of the PE/UR/UE situation.  I'd also guess that any member suits that are settled still have no priority and are behind secured creditors, super-priority non-secured, priority claims, etc.  Based on the filed assets and liabilities and guesstimate liquidation costs, there isn't much left for any non-priority litigation debt.


----------



## Kagehitokiri2

except the people that had sales of properties tied to their settlement became secured right?


----------



## TarheelTraveler

While I'm certainly no expert, that's consistent with my understanding as well.

Seperately and while it's too rich for my blood, here is an interesting article on the very high end Ferragamo Tuscan "fractional":

http://online.wsj.com/article/SB100...alEstate_RIGHTTopCarousel#articleTabs=article


----------



## travelguy

Kagehitokiri2 said:


> except the people that had sales of properties tied to their settlement became secured right?



Again, I didn't follow those settlements when they were happening so I'm not sure of their status and the details.  If tied to specific properties, then the equity of the property is all important???  I'd also be concerned if PE/UR/UE continued to pile debt on top of the property even if it was "set aside" for a settlement (it could happen).  The Fed BR judge has final say on all this and the large secured creditors will certainly wage war against the smaller secured creditors if there are not enough assets left to satisfy all when the dust settles.  

Also remember that many liabilities must be paid before the secured creditors and settled members even have a shot at the assets (taxes, lawyers, accountants, ongoing operating expenses, consultants, asset marketing costs, asset sales commissions, liquidation expediters, etc.).  It's probable that the employees (including the UE execs) will also receive back pay, pension funding AND possibly retention pay going forward if it's not "extraordinary" to the past pay history.  And of course the BR trustee(s) get a chunk of $$$ off the top before anyone gets paid.  There are also various levels of "secured" and "priority" creditors.

One things for sure, this will be a mess, take years to unfold, tie up assets for the duration and cost millions of $ (maybe 10s of millions) in fees before it's all over.


----------



## BetterClient

*If you want to save UE-Email or Call Walter....*

The person making the decision on whether or not to liquidate the club or to sell it is Walter Schuppe from CapitalSource. I can't imagine that a liquidation would serve his bank well given the costs (legal, accounting, marketing, and home maintainence on 70 properties.) 


His contact details are as follows:

Walter Schuppe
Director Special Assets
CapitalSource Bank
20 Waterside Drive
Suite 201
Farmington, CT 06032

wschuppe@capitalsourcebank.com

860-255-5208
860-255-5212 Fax


----------



## ClubsRDead

Considering that several members / investment groups appear to be working directly with the lender, I'm not sure that mass attacking the lender rep is the answer towards preserving value.  One might argue that the more they get delayed in their process, the more the member base disseminates.  Which of course, is the obvious goal of some.

Latest rumor today is that JT is gone.  Can anyone confirm?


----------



## Kagehitokiri2

TarheelTraveler said:


> Seperately and while it's too rich for my blood, here is an interesting article on the very high end Ferragamo Tuscan "fractional":
> 
> http://online.wsj.com/article/SB100...alEstate_RIGHTTopCarousel#articleTabs=article



good stuff. will be interesting to see how long it takes for a successful high end DC. *SciFrog* is waiting, and maybe by the time it happens ill be able to afford it.  if it had aman/FS i certainly know some people that would be interested.


----------



## TarheelTraveler

*UE vs. Quintess*

On the UE website, you can link through to the UE vs. Club Holdings/Quintess case filings.  A lot has been redacted, but still a lot of pretty interesting stuff remains.  UE alleges that:

On March 1, UE and Club Holdings entered into a mutual confidentiality agreement, whereby they agreed not to use, directly or indirectly, information gleaned for any other purposes other than to evaluate a transaciton.

On April 30, they entered into an agreement, which discussion has been redacted entirely.

On August 6, they entered into another agreement, which discussion has also been redacted almost entirely, but they say UE did not receive reasonably equivalent value in exchange for the transfers thereunder, including the property transfers related to the "Member Arrangements."  At the time, UE alleges it was insolvent or became insolvent as a result of the transfers made under the agreement.

Without consent of or coordination with UE, they allege that Q used member information to solicit approximately 200 members of UE.

On Sept. 16, counsel for UE requested that they cease and desist from using the member information. On Sept. 17, Q represented that it would not cease.

UE is seeking to set aside what it deems to be a constructively fraudulent conveyance.  Apparently UE owed Q money as a result of the agreements.

Most of the exhibits have been redacted, but Q's email to UE members is attached.  It notes that several of UE's sales and member services staff joined Q.  Also interesting is the sample offer.  Appears to provide a potential refund on a 4 in: 1 out basis at 75% of published price at resignation or up to 100% of deposits paid to prior clubs PLUS the UE assessment PLUS the transfer fee in 3-5 years (the latter two pieces being news to me).   Also included priority holiday eligibility.


----------



## Desties

TarheelTraveler said:


> Without consent of or coordination with UE, they allege that Q used member information to solicit approximately 200 members of UE.



Well, make it 201. 

I got my personalized offer tonight. There's an NDA attached, so I won't get into the specifics. I'll only say that it's way more costly than what I was paying UE as a PE Legacy, especially the per night fees. Yikes! This for a NEW club with ZERO homes at the moment?

However, what really gets my goat, is that I went over to the "Contact" screen and my mobile phone number was pre-filled! I have NEVER contacted Q. I realize that Q got a hold of my info from UE's files to formulate a plan that is similar to my own, but it's not just name, plan, and email address. 

Any minute now, the phone may start ringing. 

Stay classy, UE and Q.


----------



## Kagehitokiri2

TarheelTraveler said:


> they say UE did not receive reasonably equivalent value in exchange for the transfers thereunder, including the property transfers related to the "Member Arrangements."  At the time, UE alleges it was insolvent or became insolvent as a result of the transfers made under the agreement.


supports what ive suggested re Q's long game


----------



## EOD

Desties said:


> Well, make it 201.
> 
> I got my personalized offer tonight. There's an NDA attached, so I won't get into the specifics. I'll only say that it's way more costly than what I was paying UE as a PE Legacy, especially the per night fees. Yikes! This for a NEW club with ZERO homes at the moment?
> 
> However, what really gets my goat, is that I went over to the "Contact" screen and my mobile phone number was pre-filled! I have NEVER contacted Q. I realize that Q got a hold of my info from UE's files to formulate a plan that is similar to my own, but it's not just name, plan, and email address.
> 
> Any minute now, the phone may start ringing.
> 
> Stay classy, UE and Q.



Actually, not zero homes.   They sent a blast to q members on new club called Duo.   The word "NDA" nice and prominent if one wants details.  They did mention the new club would be using some existing Q homes.  So where Q had too many cabo and nyc homes, now some will move into the new club, giving new club quality q homes and helping Q diversify main club's locations.   Target home value in new club 2 bucks.   (uh, does this mean Q's avg home in main club isn't really worth 4-4.5 million?). I guess it is good for Q folks as we get st Martin homes in place of cabo.

On the other hand I have Serious concerns over mingling various clubs' assets and implications for deposit.  our club is selling homes at a loss to buy/lease new homes.  Club Holdings effectively resets their basis lower in the new club so investors get upside of real estate even though those properties generated losses in our club.  Allows them to make money on them in the new club as likely the probability  of the main club real-estate holdings generating gains is nil.     Cynical, I know but watching JT has taught us all something.  And I am guessing none of this helps anyone resign faster.


----------



## Desties

EOD said:


> Actually, not zero homes.



I'm on the other side of the NDA wall, and can assure you that the 10 or so homes (I'm assuming that's what the $25 million in "existing" real estate assets would fetch) are not being identified in the FAQ. It lists more than 20 locations that DUO is targeting, but the marketing pitch doesn't include the skinny on where the 10 homes that will be bookable in two months are -- or which ones they are.

Maybe it's just me, but when I was weighing my original club decision three years ago I went by terms, locations, and the actual homes that I knew were available. How silly would I have to be to buy into a club where I am presumably forced to continue paying even after I resign (that is NOT clarified in the FAQ -- but why should it stray from Q itself on that deal-breaker policy), where I don't even know if the homes and locations appeal to me in the first place?


----------



## ClubsRDead

Anyone can tell from their anticipated destinations that the plan here is, most likely, to try to pick off some of the "elite" homes from UE and make them the homes in DUO.  The destinations not only match up, but they can be hopeful to make that projected price point work by purchasing them inside of the bankruptcy, or more logically - at the liquidated prices.


----------



## Jack1234

Desties said:


> I'm on the other side of the NDA wall, and can assure you that the 10 or so homes (I'm assuming that's what the $25 million in "existing" real estate assets would fetch) are not being identified in the FAQ. It lists more than 20 locations that DUO is targeting, but the marketing pitch doesn't include the skinny on where the 10 homes that will be bookable in two months are -- or which ones they are.
> 
> Maybe it's just me, but when I was weighing my original club decision three years ago I went by terms, locations, and the actual homes that I knew were available. How silly would I have to be to buy into a club where I am presumably forced to continue paying even after I resign (that is NOT clarified in the FAQ -- but why should it stray from Q itself on that deal-breaker policy), where I don't even know if the homes and locations appeal to me in the first place?



From what I was told verbally, EOD is correct.  They told me that these were "Q" homes that were transferred to the new club in Cabo and NYC (both will start with several homes).  I believe there is also an existing home in T&C (NOT the old Q one though) and I believe a ski location.  Leaving aside the cost and without violating any NDA I just can't get around the fact of joining a club with homes I would actually use in only 2-3 locations and having zero members right now.  It makes perfect sense to me that they are doing this as a new club though as that way nobody signing up will count as "1 in" towards the Q resignation list.  The whole list of homes is clearly a mirror of the UE locations so I would have to guess that they are bidding on a bunch of the UE homes assuming they get enough folks to sign up.  Kinda a chicken and egg type of deal though as you want/need the other to get either side to act....


----------



## Desties

Jack1234 said:


> Leaving aside the cost and without violating any NDA



Jack, isn't it funny how we're taking the high road and honoring an NDA from a company that has no problem flaunting that it has our name, email, UE plan information, and telephone number? If there's a privacy-related class action in this, I am so in. 

That said, I'll honor the actual DUO pricing and terms until DestinationClubNews or someone else goes public with it, but it's ludicrous. Forgetting the "transfer fee" I have added the annual dues and per night fees of the entry-level plan and the per night cost is more than booking the Signature Trump suites at NYC, the 3 bedroom Turks property at Somerset, the La Coasta setup in Carlsbad, or the Acqualina 3 bedroom residence in Miami Beach -- and these are the Signature-level properties that have published rates. So why would I pay more for more restriced access to fewer properties? 

DUO is DOA. There. I said it.


----------



## Desties

Silly me. I forgot to open up the PDF file where a couple of the initial properties are detailed. 

Really? The WEEKLY rate at one of the properties booked through the hotel itself is roughly the NIGHTLY rate that DUO breaks down to (when you add annual dues and nightly rate, divided by the entry-level plan).

I'll have a lot more to say once the details go public, but I'll stand by my "anything but Q" Scrabble board joke from earlier in this thread.

If UE can't be salvaged at anything close to what it used to be, I'm so done.


----------



## Jack1234

Agreed!

I believe you might be looking at the annual fee and adding the nightly fee.  I don't think it's both, just shown in two ways.


----------



## SciFrog

Nice way for Q to dump so so properties...

There is no additional per night fee IMHO. 

Looks like a fair offer, and seeing how long Q has been mulling this, there will not be a better offer. This is it. Destinations look nice and well thought. 

EOD, they might sell some properties at a loss but as long as they replace them with better ones, why not. 

Overall this is yet another show of strength for Club Holdings, they are in for the long run, and with 4 in one out, the club is well protected. The only weakness is the lack of member deposits to start the club, it will need organic growth to pay it back over the years.

IMHO it will be a success, as it is probably limited. And Capsource must be happy about this if indeed Q buys some UE homes in the bk process, which makes me think Capsourse is going to liquidate UE and get it's money back.


----------



## TarheelTraveler

Just as a side note, a problem with non-equity structures is that you are completely subject to the whims of management and the portfolio being reshuffled and altered at any point in time.  About the only protection you have in most non-equity club contracts is maximum occupancy or member to home ratios, but even some of the contracts in the past have been alterable by management in their discretion.  I used to think that keeping members happy provided a decent amount of protection, but I'm not even sure that is much protection given all that we have seen.  Not talking about Q, but I've certainly heard members of non-equity clubs complain about the Club selling the properties with the most appreciation (or in some cases the least depreciation), rather than what the members actually want sold.

Separately, Quintess/Club Holdings filed their response on the UE lawsuit.  In essence based on my interpretation, they are saying UE was represented by counsel, they were all big boys in entering the contract, UE agreed to the deal, and we did what we were supposed to do on the contract, so we're going to do what we're going to do in soliciting the members.  It's too bad that the contracts are redacted.  If they're anything like some of those "payday lender like" loans that UE entered into in the final months before bankruptcy, who knows what that deal with Q/CH looked like.


----------



## Desties

SciFrog said:


> There is no additional per night fee IMHO.



You're right. I misread, as I thought that Q at some point had tacked on some nightly fee in addition to annual dues. 

That obviously makes it a better deal, but I'm not impressed at all with the properties -- particularly the two most Southern ones (I'm such a good boy, I won't name names).

Look up the hotel on one of them. Rates for the 2 bedroom suites at the boutique hotel run between $250 and $325 a night. Why the heck would someone overpay with Q? The Caribbean property is a joke compared to the one that Signature has/had. There is no way that these are $2 million properties, even by bubble standards. The only property that appears to be a good value is in a place that I have no interest in going to. 

DUO may not be as DOA as I thought, but I can't see anyone ever paying the published deposit to join -- so how does it grow beyond the handful of UE members it manages to land?


----------



## EOD

xxxxxxxxxxx


----------



## EOD

Desties said:


> Jack, isn't it funny how we're taking the high road and honoring an NDA from a company that has no problem flaunting that it has our name, email, UE plan information, and telephone number? If there's a privacy-related class action in this, I am so in.
> 
> That said, I'll honor the actual DUO pricing and terms until DestinationClubNews or someone else goes public with it, but it's ludicrous. Forgetting the "transfer fee" I have added the annual dues and per night fees of the entry-level plan and the per night cost is more than booking the Signature Trump suites at NYC, the 3 bedroom Turks property at Somerset, the La Coasta setup in Carlsbad, or the Acqualina 3 bedroom residence in Miami Beach -- and these are the Signature-level properties that have published rates. So why would I pay more for more restriced access to fewer properties?
> 
> 
> 
> DUO is DOA. There. I said it.



Not to belabor the point here, but isn't this still a pretty good deal for UE people? I..e. you get a deposit refund if the club makes it without every having put in a deposit into the club.  Many will say how can they pay money out of nothing, but using simple math since it is 4 in 1 out, effectively the club keeps 25% deposit fees on 4 new members -- covering your deposit easily.  In other words, it's not the ponzi scheme implied.  The equity guy covers much of costs of roll out in exchange for getting yet another club to grow and have upside from today's depressed housing levels.  I think you all may be making too much of a strawman out of what looks to me on its face to be a very legitimate offer.

The nightly cost for similar homes in cabo must be >1000 per night in winter--i.e. cheap vs dues they are offering you.  Remember, UE was not a sustainable entity so comparing dues at UE to Q dues is not exactly fair.  In theory, Q is trying to have sustainable DC so dues can't be as low as a company that went bankrupt.

There are other concerns, but still this seems a cheap call option on the deposit with a freshly capitalized entity.  Not trying to sound schizophrenic, just trying to balance the hysteria over DC's vs legitimate concerns about the model and management issues.


----------



## Jack1234

EOD-
I have to agree with you that the dues are really not out of line.   Yes, they are more than I was paying at UE (quite a bit more) but even I agree that my UE dues were a joke and I could not run a club with what I was paying per night.  OK, I don't like the transfer fee but it's not a make or break in the big picture.  My biggest problem is that the current, owned today, homes are not where I want to go, or as was pointed out for the Caribbean, not really a great resort.  I saw the list of "proposed" locations but have no idea if they will be added at XXX members as stated (that could be a long, long time away or next month) or what the homes are going to be.  I do like most of the Q homes but these are not Q, except where Q had too many homes and needed to move some into the new club.  I guess I would rather see a deal of some kind into the "real" Q than this if I were to look at a non-equity club.


----------



## SciFrog

Call them up, you will get some kind of deal to get in the real Q, but it will be a LOT more than the other offer as Q is an already established club.


----------



## Desties

EOD said:


> Many will say how can they pay money out of nothing, but using simple math since it is 4 in 1 out, effectively the club keeps 25% deposit fees on 4 new members -- covering your deposit easily.  In other words, it's not the ponzi scheme implied.



I'd believe that the offer could pay off if ER was doing it, but I'm not so sure about Q -- and much less a new club from scratch. Let's say that UE does die, and that DUO manages to get 100 members. After three years, where are the next 400 members -- deposit-paying members -- going to come from to cash out the first 100? No one is going to make a six-figure deposit to join a non-equity club, probably ever again outside of ER. Any thinking prospective member is going to wonder why they're only 2 major non-equity clubs when there used to be well over a dozen. 

DUO's growth will stall, Club Holdings won't add any more properties, and members will be left with some frankly unimpressive properties in a club that they can't get out of. 

Lusso members got a much sweeter deal and still Q got -- how many -- 50? DUO will get a few dozen members if UE folds completely, and then either close the club for lack of interest or absorb the club into Q (or Tour Club). Unless it adds some of the better UE properties, even a few dozen members may be too generous.


----------



## EOD

Desties said:


> Lusso members got a much sweeter deal and still Q got -- how many -- 50? DUO will get a few dozen members if UE folds completely, and then either close the club for lack of interest or absorb the club into Q (or Tour Club). Unless it adds some of the better UE properties, even a few dozen members may be too generous.



How was the Lusso deal a better deal?  I mean, specifically, how was it better?  They paid a transfer fee, paid dues, and got chance at deposit back.  I'm not sure it is different.   Only they joined existing Q which is probably less stable than a new launch quite frankly.

Certainly, it is not a 100% probability of getting your deposit back.  On the other hand, it's not zero. But say they then fold it into tour or main club as member numbers don't grow--you are still traveling and still get shot at deposit from that club.   Look, I am not saying it's a no brainer. But if you like the DC's , if the locations work and you think it has a 30% chance, that's better than your current ZERO.  Negotiate to spread transfer fee over 5 years maybe?

Destinations are a legit concern---if they have 5 homes in siberia, the cheap option on your deposit stinks.  My biggest concern though would be solid LEGAL review.  Let's all start spending money on lawyers....

Overall, though, there is too much DOA chatter which doesn't serve other UE members well if they really care about other options.  Remove hysteria, do the math, vet the locations, hire lawyers, but randomly saying it's a terrible deal is not right.  I have many open gripes with Q management, but people in UE have a chance to get made whole here and should consider it.


----------



## brit007

*JT*

'tis confirmed he is out! No editorial comment


----------



## SciFrog

Q was always supposed to be a multi club outlet,original  Q is supposed to be capped becoming 1 to 1 exit scheme. UE troubles just jump started their strategies.


----------



## fue

On September 23, 2010, the Board of Directors (the “Board”) of Ultimate Escapes, Inc. (the “Company”) removed James M. Tousignant as President and Chief Executive Officer of the Company, and terminated Mr. Tousignant’s employment with the Company, for “cause” (as defined in Mr. Tousignant’s employment agreement with the Company).  At this time, Mr. Tousignant continues to serve as a member of the Board.  The Board has not appointed a replacement President or Chief Executive Officer at this time.  The Board has, however, expanded the authority of Sheon Karol, a partner at CRG Partners Group, LLC (“CRG”) who had previously been appointed to serve as Chief Restructuring Officer of the Company’s subsidiary Ultimate Escapes Holdings, LLC (“UEH”) (as described in the Current Report on Form 8-K filed by the Company on August 31, 2010), such that Mr. Karol is now also responsible for the oversight and direction of the day to day operations of the Company.

Mr. Karol, age 53, has been a partner at CRG, a national turnaround consulting firm, since April 2009.  From March 2007 to March 2009, he was a Managing Director with Mesirow Financial Consulting, a turnaround consulting firm.  From February 2002 to March 2007, he was a Managing Director with XRoads Solutions Group, a turnaround consulting firm.  Prior to that, Mr. Karol served as Senior Vice President-General Counsel of Lechters, Inc., a specialty retailer, since May 1999.


----------



## ClubsRDead

Political maneuvering.  JT is out as Pres / CEO, but still a member of the Board, whom CRO reports too.  

Looks like they're going to have some issues in Court tomorrow, as the Trustee has objected to pretty much everything that Cap Source has requested, timing, auction process, fees, etc.


----------



## TarheelTraveler

EOD said:


> My biggest concern though would be solid LEGAL review.  Let's all start spending money on lawyers....



The devil is always in the details.  I frankly don't believe most lawyers would have advised their clients to sign the contracts that were run of the mill in the non-equity DC world over the years.  Some of the most one-sided contracts that I've ever seen.  A thousand or two on the front end would have saved people in many cases hundreds of thousands on the back end IMHO.

Interesting filing by the U.S. Trustee yesterday objecting to CapSource's motions, in essence trying to slow down CapSource's plan, with the expected result of selling substantially all of the assets of UE to them for $75M, which presumably such money would go back to them as the secured creditor.  The U.S. Trustee noted that the official committee of unsecured creditors (presumably including the members) has not even been appointed yet.  On the one hand, it seems like it's in everyone's best interests to preserve the value left in the Club by moving quickly, but I certainly hope that all of the stakeholders are involved, particularly the members.


----------



## Torn and Frayed

TarheelTraveler said:


> Interesting filing by the U.S. Trustee yesterday objecting to CapSource's motions, in essence trying to slow down CapSource's plan, with the expected result of selling substantially all of the assets of UE to them for $75M, which presumably such money would go back to them as the secured creditor.  The U.S. Trustee noted that the official committee of unsecured creditors (presumably including the members) has not even been appointed yet.  On the one hand, it seems like it's in everyone's best interests to preserve the value left in the Club by moving quickly, but I certainly hope that all of the stakeholders are involved, particularly the members.



He also objects to the fast timetable insofar as it seems it is being rushed to exclude the voices of the unsecured creditors (i.e. members).

It is also interesting that he is objecting to the sale and/or disclosure of UE's membership lists and "other personally identifiable information of its customers" to potential bidders absent any showing that such disclosure is consistent with UE's privacy policy as set forth on its website (it is not; see http://www.ultimateescapes.com/PrivacyPolicy.aspx). It is about time that someone raised a challenge to the disclosure of members' families, incomes, occupations, children's ages, addresses, phone #s, etc., without some very necessary privacy protection or oversight. A concern, of course, that neither JT or RK could give a rat's crap about.


----------



## Kagehitokiri2

what priority do penalty fees or whatever have in a bankruptcy..?


----------



## Torn and Frayed

Kagehitokiri2 said:


> what priority do penalty fees or whatever have in a bankruptcy..?



Do you mean late fees on a loan or criminal fines and restitution?


----------



## Kagehitokiri2

where do violations of privacy policies fall?


----------



## TarheelTraveler

So for any bankruptcy experts out there (or people who've had the time to really parse through the docs), does the most recent filing this afternoon mean that CapSource is approved to provide DIP credit in exchange for getting additional assets collateralized (ones that weren't previously pledged to them)?

For those in the know, what's the story behind the cited mortgage in favor of Rich Keith in the amount of 56K recorded on 9/10/10 in NY, NY?


----------



## ClubsRDead

Cap Source has attached, or applied for attachment, of all company assets, both as priority and superpriority.  That is being challenged by the Trustee.

RK's name is on all sorts of the PE properties as minor (some major) mortgage holds.  They're attempting to invalidate that too.  In RK's case with the Quintess deal, the Court is likely seeking to not have his liens upheld.


----------



## Kagehitokiri2

at least ER and Q have actual equity investors, rather than just self-compensation.

and AK/fortress.


----------



## travelguy

IMHO ... So the largest secured creditors are already fighting hard for priority status ... that does not bode well for the theory that there are even enough post liquidation assets to satisfy secured creditors.  Non-secured creditors (like members) most likely get nothing and may want to consider this before expending more on legal intervention.

This early positioning between the large creds also suggests that this will be tied up for a looong time and prohibit a return to any semblance of operation/merger/takeover/sale.  I also don't see how any outside entity (other DCs) can be talking about obtaining some of the UE properties since they likely will be tied up in the CS-Trustee fighting for awhile.

And of course the meter is running for the super-priority legal and accounting expenses incurred during all this positioning and fighting ... further sapping any remaining assets upon liquidation.

Very sad to see it play out this way ......


----------



## fue

http://www.destinationclubnews.com/News_Jim_Tousignant_Out_At_Ultimate_Escapes.php


----------



## ClubsRDead

http://www.destinationclubnews.com/...hies_For_Restructuring_A_Destination_Club.php


----------



## Torn and Frayed

fue said:


> http://www.destinationclubnews.com/News_Jim_Tousignant_Out_At_Ultimate_Escapes.php



I hope numb nut's outrageous salary and benefits package is not a priority claim in the Chapter 11. Any lawyers care to allay my fears?


----------



## ClubsRDead

Torn and Frayed said:


> I hope numb nut's outrageous salary and benefits package is not a priority claim in the Chapter 11. Any lawyers care to allay my fears?



"Numb nut's," (aka "wing nut" in our camp) will more than likely file a claim for salary, benefits, missed enjoyment of his leased Bentley, his two "free" memberships, etc - pretty much anything he can think of to get the number as high as possible.  It won't be considered priority or administrative, but he'll check that box anyway and plead for it.  Mind you, in a insolvency, which is what this is but just not apparent to most yet - it doesn't matter what you classify the claim as because priority, administrative (except for those approved by the Court) and unsecureds are all x $0.

The claim will merely become a tool for nut bag to use when he is trying to negotiate releases with the UCC attorney or the US Dept of Justice for reduced penalties (and prison time) for SEC criminal charges.  At least, in a perfect world.  One of the challenges in a zero dollar bankruptcy is having enough liquidity for the UCC to be able to pursue criminal (and stupid) activity.


----------



## Torn and Frayed

ClubsRDead said:


> The claim will merely becoming a tool for nut bag to use when he is trying to negotiate releases with the UCC attorney or the US Dept of Justice for reduced penalties and prison time for SEC criminal charges.  At least, in a perfect world.  Again, one of the challenges in a zero dollar bankruptcy is having enough liquidity for the debtor and UCC to be able to pursue criminal (and stupid) activity.



Do you think there is enough here for the government to pursue a securities fraud and wire fraud case?


----------



## Kagehitokiri2

http://destinationclubnews.com/News_The_Phoenix_Club_Rebrands_As_Second_Home_Destinations.php



> While they may no longer be known as The Phoenix Club, Second Home Destinations is crafting a special offer for members who have been burnt by Ultimate Escapes. Still in their launch phase, a club representative told us that they plan on contacting former members of High Country Club in the near future. Soon thereafter, the club will officially launch their full operations and extend an offer to members of Ultimate Escapes.



so new entry level - second home destinations (and EE lonestar?) (and will luxus launch US club?)


----------



## Spent

Yes -I believe several issues should be brought to the attention of the SEC by member/shareholders.  They should probably go to the same SEC representative.  Does anyone have a name or address for the SEC?

One of my peeves is the hour long conference call in May discussing all new properties in Puerto Rico Trump development and a very opptomistic outlook --- while we now know that at that time they were not even paying their bills.

I believe that was very misleading to member/shareholders.


----------



## Kagehitokiri2

but the SEC filings just kept getting more negative didnt they?

they just said the opposite in member communications.

you can find posts here discussing the level of discrepancy, which might give a sense of timeline/specifics/etc.

***

oct 1 objection by committee of unsecured creditors
http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_100.pdf

sept 28 objection by trustee
http://www.bmcgroup.com/restructuring/DocView.aspx?ClientID=255&DocNumber=77&CaseNo=1-10-bk-12915
incl


> In sum, if the Debtors intend to sell the personally identifiable information of its customers (or assets containing personally identifiable information), a consumer privacy ombudsman must be appointed under 11 U.S.C. §§ 363(b)(1)(B) and 332(a), given that the sale of such information is not consistent with the Debtors’ privacy policy.


aha
11 U.S.C. §§ 363(b)(1)(B)(ii) >


> finding that no showing was made that such sale or such lease would *violate applicable nonbankruptcy law*.



http://www.ftc.gov/privacy/privacyinitiatives/promises.html "Section 5 of the FTC Act prohibits unfair or deceptive acts or practices in the marketplace."

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html 
relevant cases?
3/10/05 (rental of customer data)
9/17/04 (rental of customer data)
5/09/03 (sale of survey data)
1/29/03 (sale of educational data)
7/10/00 (sale of customer data incl children)

http://www.ultimateescapes.com/PrivacyPolicy.aspx
mentions collecting data, but nothing about securing it or not sharing it...

i would assume UE has data on member's families incl children - which might make this relevant >
http://www.ftc.gov/ogc/coppa1.htm


----------



## Torn and Frayed

Kagehitokiri2 said:


> but the SEC filings just kept getting more negative didnt they?
> 
> they just said the opposite in member communications.
> 
> you can find posts here discussing the level of discrepancy, which might give a sense of timeline/specifics/etc.
> 
> ***
> 
> oct 1 objection by committee of unsecured creditors
> http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_100.pdf
> 
> sept 28 objection by trustee
> http://www.bmcgroup.com/restructuring/DocView.aspx?ClientID=255&DocNumber=77&CaseNo=1-10-bk-12915
> incl
> 
> aha
> 11 U.S.C. §§ 363(b)(1)(B)(ii) >
> 
> 
> http://www.ftc.gov/privacy/privacyinitiatives/promises.html "Section 5 of the FTC Act prohibits unfair or deceptive acts or practices in the marketplace."
> 
> http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html
> relevant cases?
> 3/10/05 (rental of customer data)
> 9/17/04 (rental of customer data)
> 5/09/03 (sale of survey data)
> 1/29/03 (sale of educational data)
> 7/10/00 (sale of customer data incl children)
> 
> http://www.ultimateescapes.com/PrivacyPolicy.aspx
> mentions collecting data, but nothing about securing it or not sharing it...
> 
> i would assume UE has data on member's families incl children - which might make this relevant >
> http://www.ftc.gov/ogc/coppa1.htm



In my opinion, if there is any fairness in this small universe of UE members one would hope that there will ultimately be a reckoning  for certain misleading/fraudulent representations, unsavory business practices and reckless behavior with entrusted funds.


----------



## ClubsRDead

Interesting objection by the UCC regarding Ultimate.  Would appear that Capital Source is now being backed into a corner.  Too bad CRG didn't shop bidders and DIP providers.


----------



## Kagehitokiri2

oct 4 objection by committee of unsecured creditors
http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_108.pdf


> A. The Value of the Collateral Far Exceeds the Value of the DIP Loan
> B. The Committee’s Ability to Investigate and Prosecute the Enforceability of Liens and Potential Claims is Severely Limited
> C. The Provisions of the Interim Order Unduly Benefit the DIP Lender and Cause Excessive Harm to Unsecured Creditors and the Estates
> D. The Proposed Financing Requires Debtors to Meet Certain Deadlines that are Unreasonable
> E. The Interim Order Incorrectly Allows for the Payment of Post-Petition Attorneys’ Fees and Costs Incurred by the Original Lender, Agents and the DIP Lender
> F. The Proposed Budget Severely Limits the Committee’s Ability to Participate in these Cases but Includes Other Inappropriate Payments
> G. Miscellaneous



http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_106.pdf


> DATE, TIME AND LOCATION OF MEETING OF CREDITORS. *October 28*, 2010 at 11:00 a.m. at the J. Caleb Boggs Federal Building, 844 King Street, Room 5209, 5th Floor, Wilmington, DE 19801.


----------



## TarheelTraveler

Interesting filing regarding the sign-in sheet for the Oct. 4th hearing.  The usual attorneys that you'd expect were there (Debtors, CapSource, Unsecured Creditors Committee).  However, also signing in were counsel for Club Holdings and Demeure.


----------



## OneMoreTime

TarheelTraveler said:


> Interesting filing regarding the sign-in sheet for the Oct. 4th hearing.  The usual attorneys that you'd expect were there (Debtors, CapSource, Unsecured Creditors Committee).  However, also signing in were counsel for Club Holdings and Demeure.



Granted Club Holdings and Demeure were "there" telephonically (listen only mode) but more interesting there was only one potential bidder in the court room that I heard of-


----------



## Kagehitokiri2

what is demeure doing, since they stopped mentioning having owned properties?

did Q just add a UE property to portfolio? 
2BR 1576ft2 on 26th floor @ 1600 broadway?
http://quintess.com/new_york,times_square_aria#highlights
still listed as creditor. seems like strategy to me.


----------



## TarheelTraveler

OneMoreTime said:


> Granted Club Holdings and Demeure were "there" telephonically (listen only mode) but more interesting there was only one potential bidder in the court room that I heard of-



Interesting.  Care to share who the one potential bidder was?

Article on DHH's founder Nick Wood buying a ski area:

http://www.choteauacantha.com/articles/2010/10/06/news/doc4cab43b436719734113325.txt

"Wood is a wealthy entrepreneur from New Zealand who currently lives on a small Fiji island. In 1993, he and his brother, Tim, created the Internet Home Users Group or “iHug,” which became one of the major Internet service providers in New Zealand and Australia. In 2003, the Woods sold their company for about $80 million, and Nick turned his business interests to resort management, purchasing and refurbishing the Octopus Resort in Fiji.

    In 2007 he founded and launched Distinctive Holiday Homes, a global vacation destination club with properties in Australia, New Zealand, the United States, France, Italy and the Mediterranean. The Teton Pass Ski Resort is the latest property purchased for the Distinctive Holiday Homes business.

    Wood told the Choteau City Council that he is investing about $1.6 million in refurbishments at the ski hill this year and plans another $1.5 million next  year. The renovation efforts will bring everything on the hill up to current mechanical and safety standards, and will provide skiers from Choteau and anywhere else in the world with an economical, outstanding winter sport experience, he said."

I could definitely be wrong, but I thought DHH was selling off properties, rather than acquiring them.


----------



## travelguy

TarheelTraveler said:


> Article on DHH's founder Nick Wood buying a ski area:
> 
> The Teton Pass Ski Resort is the latest property purchased for the Distinctive Holiday Homes business.



1100 ft. Vertical with one double chairlift, assuming that he is talking about replacing that lift with something better.  Not much vertical and just a few runs, not my idea of a ski resort.



> I could definitely be wrong, but I thought DHH was selling off properties, rather than acquiring them.



I thought so also, something about they would liquidate because of the member redemption hit a predetermined level?  The impression that I got from Wood's rant on DC4MS was that he said screw you to the DC community and decided to take his ball and go home.  My favorite memory is when he "de-friended" the DC4MS forum administrator for posting something that Woods didn't like.  Good times ...


----------



## Kagehitokiri2

re DHH remember octopus resort revenue was being shifted to club, and there was 1 club property there.





Kagehitokiri2 said:


> although demeure plans to own some homes... no clue how that will work. looking through 2 articles soon, will quote anything that jumps out at me.
> 
> meh. no mention of buying properties, which was mentioned a while ago.





Kagehitokiri2 said:


> http://www.sherpareport.com/destination-clubs/demeure-launches-1209.html
> 
> 
> 
> 21 December 2009
> Demeure club divides its properties into three tiers of $0.5m-$1.5m, $1.5m-$3m and $3m+ homes. The clubs goal is to reach 400 member-contributed homes (equal to 60 full time equivalents) and 20 club-purchased homes, throughout the world. In years 20-25 the club plans to wind up and distribute the proceeds from the sale of club owned homes to members. The club is off to a good start with 37 member contributed homes.
> 
> 
> 
> concept dropped?
Click to expand...


so are they back to looking at properties (UE's) ?

they should be talking to second home destinations, because of the property owners...


----------



## SciFrog

Quintess is officially introducing DUO, with or without UE member support:

http://destinationclubnews.com/News_Quintess_Introduces_New_Destination_Club_DUO.php

It explains the multi club approach also, which I think is a plus and explains how clubs can be eventually capped, something many doubted.


----------



## Kagehitokiri2

all anyone ever said was that things (like caps) could always be changed..

also >

Q has cap and exchange with oyster (and karma resorts?) and reciprocity between Q clubs.

EE has cap and exchange with hideaways, and reciprocity with upcoming EE lonestar.

lusso stated plans for multiple clubs with caps and reciprocity.


----------



## Desties

Okay, I'm glad that a Quintess exec is now on the record with DUO so we can discuss this.

How is this a good deal? There are just five initial destinations -- and more than half of the initial homes are in NYC and Cabo. 

And now that it's out in the open, I'll point out that the property that I was ramming my head into the wall about was the 2 bedroom in South Beach. The Carlyle is a ho-hum boutique hotel that happens to have had a starring role in a few movies. However, a quick trip to the website will show you that the 2 bedroom units there run just $275-$325 a night. Why pay more than twice as much with availability constraints? 

Why so cheap? Well, it's not exactly beachfront (then again, neither is the Quintess home in Miami). Those familiar with Ocean Drive will note that you have to cross a very busy street and then you're at a very crowded and public beach. It's not like the odd-numbered properties on Collins further north. 

Look up any of the 2 bedroom units up for sale in The Carlyle. They all sell for well below $1 million, so the $2 million tag is generous at best.

Maybe some of my fellow UE members will like the properties and destinations. It just doesn't appeal to me, even under the sweetheart terms being offered.


----------



## Kagehitokiri2

i hear UE sold member list to Q for very little, which makes me think their lawsuit against Q is probably costing more than what they made on sale of list...

although sounds like its been resolved?

*Desties*, ouch. in this market they could be buying at setai.

http://www.bmcgroup.com/restructuring/DocView.aspx?ClientID=255&DocNumber=128&CaseNo=1-10-bk-12915


> EXPEDITED EMERGENCY MOTION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER DIRECTING THE PRODUCTION OF DOCUMENTS PURSUANT TO FED. R. BANKR. P. 2004
> 
> 1. The Committee brings this Motion to protect its rights to properly investigate: (a) prepetition lien validity, perfection, and enforceability; (b) extent, amount and validity of prepetition debts and (c) potential causes of action, if any, against CapitalSource. In conjunction herewith, the Committee has served an informal document production upon CapitalSource. However, CapitalSource has already advised the Committee that it will not produce certain documents. In particular, the Committee needs to ascertain the values assigned by CapitalSource regarding certain properties. Given the extremely tight time frame in which the Committee has to investigate such claims and causes of action, the Committee has no alternative but to pursue this Motion on an emergency basis at this time.
> 
> 2.	The Committee seeks a full document production from CapitalSource regarding the market value of the properties that comprise the collateral securing the prepetition obligations, including but not limited to appraisals, liquidation analyses, and other supporting documents for each of the properties.


----------



## TarheelTraveler

The bankruptcy judge ruled against Club Holdings/Quintess and rejected the August 6, 2010 agreement between UE and CH relating to certain "real estate transactions and other business arrangements."  Wonder what happens with the "horses that have already left the barn" like the member list.  Does this mean that Quintess can no longer access the member list to market to UE members?


----------



## Kagehitokiri2

as a non lawyer, my impression was just that any _pending_ transactions were canceled?


----------



## ClubsRDead

TarheelTraveler said:


> Does this mean that Quintess can no longer access the member list to market to UE members?



Doubtful.  Due to Q announcing DUO publicly, they've set themselves up for positioning by stating "it's not just for Ultimate members."  They wouldn't be construed as soliciting if the general public can buy the product too, and they just "happen" to have the names of us UE folks.  I've been called and emailed on this several times.

Now it's rumored but unconfirmed that UE Mgmt and CRG are proposing a model to a select group of members under the guise of "member owned" and if it gets acceptance they will go widespread with it. Not sure how they can think anyone will accept anything they put out.

More interesting in Court might be what happened to the UCC and Trustee objections.  Sounds like Cap Source prevailed and may have cut a deal with the UCC to just pay their fees or something so they can keep the sale date on schedule and take back the homes.

We've seen the ER, Q, DHH, etc. attempts at interjecting into this process and competing for UE members, where is AK in this process, doing nothing?


----------



## Kagehitokiri2

99% sure AK was involved at one point. also heard EE was involved at one point.

you heard DHH? seriously?

ah, lots happening today >
http://www.bmcgroup.com/restructuring/DocView.aspx?ClientID=255&DocNumber=132&CaseNo=1-10-bk-12915
http://www.bmcgroup.com/restructuring/DocView.aspx?ClientID=255&DocNumber=133&CaseNo=1-10-bk-12915
auction set for oct 18
sale hearing set for oct 20

$32K/mo office rent being paid to JT?
http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_132_6.pdf

nice, especially nowadays, and all too rare >
http://www.elitetraveler.com/news_d...-carlton-dove-mountain-completes-re-cap-phase


> An investment by Google pioneer Ray Sidney in The Residences at The Ritz-Carlton, Dove Mountain near Tucson, AZ has signaled an “all clear” to snowbirds seeking a second home in a perfect golf resort climate. Sidney’s capital infusion has eliminated all community debt creating lower cost opportunities for luxury home buyers interested in purchasing the highly-personalized homes or custom estate homesites.
> 
> “To have the community debt-free, with all amenities completed and operating, is rare given these economic times,” explains Mehl. “By responding to the financial environment with a new capital structure, we are able to re-price our homes and homesites at about $400 per square foot. This is in line with today’s ‘new normal’ providing an unparalleled Ritz-Carlton lifestyle at an irresistible value to buyers.”
> 
> Already underway, the initial residential phase of The Residences at The Ritz-Carlton, Dove Mountain will have 110 highly-personalized homes featuring the finest in design and finishes, together with 16 custom estate homesites. New prices for the Amolillo single family homes start at $1.1 million; Seven Saguaros single family homes start at $1.5 million; and custom fairway homesites start at $590,000; villas start at $925,000; and Rockpoint Ridge custom homesites start at $605,000.



more info on what one UE member mentioned >
http://destinationclubnews.com/News_Ultimate_Escapes_Continues_To_Pursue_Member_Owned_Option.php


----------



## TarheelTraveler

http://www.destinationclubnews.com/...nveils_Offer_For_Ultimate_Escapes_Members.php

"Membership plans will be offered for between 20 and 50 nights of access annually, beginning at $12,500 for Ultimate Escapes members. DUO will segment members into groups of 100, based on when they join, adding a time sensitive component to membership. 

The first 100 to join will be classified as "Group 1" members and will have priority over "Group 2" and "Group 3" members for new reservations for up to 50% of their available nights until early November. Group 1 members will also have the lowest transfer fee and be eligible for redemption three years from their first anniversary date, the date that they first paid annual dues. 

Group 2 members, those that join following the first 100 members in Group 1, will receive priority over Group 3 for new reservations for up to 50% of their available nights during the initial orientation only until early November. Group 2 members will have a higher transfer fee than Group 1 members and will be eligible for redemption four years from their first anniversary date. 

Group 3 members will be those that join following the second group of 100 members and will be able to make new reservations for up to 50% of their available nights until early November. Members will be able to resign five years from their first anniversary date. 

Members will have two options regarding the payment of their annual dues. Those that pay their annual dues at the time of enrollment will have that day set as their anniversary date and be able to make travel reservations. Members also have the option of delaying their annual dues payment until up to January 31, 2011. The date that the annual dues are paid will then serve as the anniversary date with members capable of making reservations thereafter. 

"There are a number of reasons that an Ultimate Escapes member should join sooner rather than later," said Todd Miller, the Vice President of Marketing at Quintess. "Number one is that there are nothing but green fields in terms of availability as a new destination club. Secondly, this pricing is only available for the first 100 members, and we expect prices to go up before the month is out. Based on the flow of calls and inquiries, this is going to happen very quickly. Lastly, the best membership redemption terms are available for the first 100 to join.""

While I certainly understand that UE members have paid more than their share for the outcome that they got, it seems odd to me that someone would join a club at full price when others paid 10-15% of that price to join DUO.  New members paying the full freight are obviously necessary for UE members to exit the club and receive their original deposit back.  Maybe in enough years the DC industry can flourish again and this will all be a distant memory.


----------



## Desties

TarheelTraveler said:


> While I certainly understand that U... would hold up. Burn me just once, thank you.


----------



## ClubsRDead

Dumbest idea in the world.  Totally unsustainable.  How in the hell do they plan on offering redemptions based on dollars we paid to other clubs, and why would we believe it?  Of course it is cheaper than the bullsh*t plan the CRO is pitching right now, based on taking over $100MM of debt from Capital Source.  The big question is when will the homes be available and where are they coming from -- the UE portfolio?


----------



## Jack1234

One of the several reasons I took a pass on DUO as well.  The major reason though was the lack of homes that are real and in place today at places I would want to go.  The Stowe home was clearly not a UE home.  Nice resort but not really the most convenient for access to Stowe's wonderful bike/walking path or town center of Stowe.  

They are also making some deals for those who want to join the "real" Q with lowered deposits and spread out payments.  Don't remember the details as I was not interested but if anybody is the deals are there.


----------



## Buon Viaggio

Wow, what a complicated mess.  If any UE members join I'd love to hear the rationale.  This kind of offer really cheapens and devalues the concept of destination clubs and if Quintess is successful in attracting a significant number of members, I think it's a game changer for the industry.  At the very least it makes Quintess look desperate.


----------



## TarheelTraveler

The problem with the UE "solutions" that we've seen so far is that none of them hit on all of the issues that concern the bulk of UE members.

While I think most UE members would be glad to continue to pay dues for travel, they've been through enough all ready and want to minimize future risk.  I suspect most don't want to put up money for a "transfer fee" to fund another club that at least on its face has many of the characteristics of the club that they came from (i.e., a club that they don't own with members that paid little or nothing in deposits, with the promise of big deposit returns down the road if they stay on as members).  As compared to the club that they came from, there is the big Q mystery investor which is an advantage that UE never had, but at the same time, the portfolio is a fraction of what UE members are used to.  

Additionally, most UE members also aren't willing to put up a big new deposit for an equity club even though the economics are much understandable.

Seems to me that members need to have a few choices that are more likely going to match what they're looking for:

1. For those that aren't going to pay another dime beyond dues, you offer a non-equity option without the transfer fee, or at a minimum, a transfer fee that is not payable until a few years down the road, so you can see how the club and portfolio are actually doing before sinking more money in.  Members are frankly sick of paying "assessments" and deposits for models that end up being unsustainable, and clubs that they have no control over.

With respect to DUO, the transfer fee is so low that deferring the transfer fee would be peanuts from a cost standpoint.  Hell, build the deferral cost into the transfer fee.  Most of the clubs with offers of course want the cash now, but I don't think it's reasonable given the psyche of UE members right now.

2. For those that are willing to put up some sort of deposit in order to better make the economics work, make sure the deposit is going into assets that they actually own and that they have some say so over.

3. Offer a long-term trial plan, with a deferred deposit again going into assets that they actually own and that they have some say so over.  With enough time, the wounds of UE members can heal.  While someone might not be willing to put in a deposit now, they might down the road when they get comfortable with the new club, see stability, and see that the economics work.

I realize that no equity club could take on a huge number of trial members, because they don't have enough excess capacity, but maybe RC, A&K, and EE could each take on some members.  ER and Q could instead offer a non-equity version of this.

While the remaining clubs in the industry may not have created the problem, it seems like the industry as a whole would be smart enough to realize that they need to come up with a solution for the UE members.  All of their sales will be impacted by this if they don't.


----------



## EOD

Buon Viaggio said:


> Wow, what a complicated mess.  If any UE members join I'd love to hear the rationale.  This kind of offer really cheapens and devalues the concept of destination clubs and if Quintess is successful in attracting a significant number of members, I think it's a game changer for the industry.  At the very least it makes Quintess look desperate.



I would say rationale is obvious to join.  For small outlay of cash you have a chance of getting a deposit refund.   Just a probability analysis for UE members. Take what you pay to join divided by present value of what you get back and ask is prob of success greater than that? Remember it is being funded by eq investor as well so if you are paying 10 percent as a gamble to get 100 percent cash back it is not crazy to me.   In the meantime you get to travel and don't have to pay to join elsewhere.  The new club is an instant startup which is win for members and q investors.  The worry is when you all quit --  will 4 in 1 out work?

I saw some of homes in the pitch-- several were moved from Q main club so I doubt any ue properties are involved.    

While I have had my share of battles with q, I don't find this a desperate move at all (as lusso deal was).  They are gambling that 10 percent of ue members will take a flyer on a new club backed by real investor with a shot at recouping some of their ue losses.   Instant new dc.  The main club is benefitting as it is moving some excess cab homes out so it can invest more in st Martin.  

As for how they can pay out when they receive zero now:  simple math.   25 percent of new deposits are a fee to join so if 4 new guys join, the fee income generated more than pays out old members.   Means short term less revenue but to get instant new dc, seems like a reasonable cost.   What sweetheart deals did early er members get?   

I am not saying this is perfect and there is risk and you need to vet the docs, but let's all at least be balanced in analyzing it


----------



## SciFrog

Right on EOD. Why UE people here don't understand is beyond me. 

Anyway on Luxist Ben Addoms is saying they have 200 UE members "in the pipeline", whatever that means.


----------



## Kagehitokiri2

http://www.luxist.com/2010/10/11/duo-by-quintess-the-new-destination-club-a-new-option-for-ulti/

Q >


> A dozen people have signed up in less than ten days, and there are nearly 200 people who have started the process.
> 
> DUO residences average $2 million
> 
> There are 11 Residences which are already available for reservations including four villas in Los Cabos, four apartments in New York City, one penthouse in Turks & Caicos, and one residence in South Beach. Our latest addition , is in Stowe, Vermont on the Trapp Family Lodge Resort. ( see images) We are also very close to adding more DUO properties in Jackson Hole, Vail, and Orlando. We are also looking actively in the Caribbean and Hawaii and Italy.



*susank* >


> Quintess and Exclusive Resorts -- and others, to my knowledge, The Discovery Club, Demeure, Villazzo and Private Trade Winds, have come forth with offers



oh fun, properties and starting bids
http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_143_1.pdf
total $65mm, breakdown >
23 elite* $210k* (lake las vegas) > $3.99mm (maui)
26 signature $369k (scottsdale) > $1.14mm (miami beach)
19 premiere $217k (colorado) > *$1mm* (new york city)
(68 total)

plus >
private retreats paradiso ltd $6,120,000 (nevis - 7?)
private escapes TCI ltd $1,890,000 (turks and caicos - 4?)
private escapes borgo di vagli llc $500,000 (tuscany - 3?)

...

http://www.bmcgroup.com/restructuring/DocView.aspx?ClientID=255&DocNumber=149&CaseNo=1-10-bk-12915
rejected contracts >
68 membership agreement 
1 settlement agreement
2 employment agreements (JT and RK)
1 assignment agreement (with Q)
1 director compensation plan (mcmillen - SAAC)
2 engagement letter >
- roth capital partners LLC 
- maxim group

so, why only 69 members here...?

rejected leases include both residential and office


----------



## TarheelTraveler

EOD said:


> I would say rationale is obvious to join.  For small outlay of cash you have a chance of getting a deposit refund.   Just a probability analysis for UE members. Take what you pay to join divided by present value of what you get back and ask is prob of success greater than that? Remember it is being funded by eq investor as well so if you are paying 10 percent as a gamble to get 100 percent cash back it is not crazy to me.   In the meantime you get to travel and don't have to pay to join elsewhere.  The new club is an instant startup which is win for members and q investors.  The worry is when you all quit --  will 4 in 1 out work?
> 
> I saw some of homes in the pitch-- several were moved from Q main club so I doubt any ue properties are involved.
> 
> While I have had my share of battles with q, I don't find this a desperate move at all (as lusso deal was).  They are gambling that 10 percent of ue members will take a flyer on a new club backed by real investor with a shot at recouping some of their ue losses.   Instant new dc.  The main club is benefitting as it is moving some excess cab homes out so it can invest more in st Martin.
> 
> As for how they can pay out when they receive zero now:  simple math.   25 percent of new deposits are a fee to join so if 4 new guys join, the fee income generated more than pays out old members.   Means short term less revenue but to get instant new dc, seems like a reasonable cost.   What sweetheart deals did early er members get?
> 
> I am not saying this is perfect and there is risk and you need to vet the docs, but let's all at least be balanced in analyzing it



As discussed above, the DUO offer certainly won't be for everyone, and I wish there were a better range of options that appealed across the board to all UE members.

However, I certainly get why someone could rationally join DUO.  It's not much of a deposit, you've got that early good pricing and terms, and you've got the big secret investor.  As far as receiving your deposit back, as EOD points out, the rub is whether you can really get out when the time comes.  We've all seen how that promise has played out before.  If the investor were on the hook for the redemptions, I'd give much better odds.

In reading the Luxist interview and thinking about things, I've got two or three additional questions.

So early members (i.e., UE members) pay 10%-15% of the pricing as compared to what subsequent members are supposed to pay.  Also, UE members will pay less for dues per the Article:

"Pricing for UE members ranges from 20 nights for $12,500 to 50 nights for $26,500. The Charter Membership annual dues range from 20 nights at $14,500 to 50 nights for $32,750."

Not saying that this going to happen to DUO, but from an historical perspective, isn't the reduced initial pricing, reduced dues and sweetheart provisions given to early members, one of the main downfalls to most of the clubs that went bankrupt, because it required later members to essentially pay for earlier members?  When the new members didn't materialize, the clubs collapsed.  DUO at least doesn't have quite as much of a dues spread and presumably has a better backer than early clubs, but it seems odd given the history of the industry.

Also, when Quintess threatened liquidation/bankruptcy, didn't they significantly increase dues and put all members at the same dues levels going forward, which, of course, resulted in all of the litigation against Q about whether they had the right to change the contractual terms?  It strikes me as odd that they would provide better dues pricing to earlier members given that fairly recent situation.

Also, anyone know whether you can resign and immediately stop paying dues?  If so, do you lose your deposit redemption rights?  If not, it makes the case for DUO much stronger.  Anybody seen the contract?

In any event, as I said above, I can definitely see why a UE member would join.  At least this time, I assume UE members will be much more likely to do the due diligence.


----------



## Buon Viaggio

TT, you've hit the nail on the head...is this plan sustainable?  Sure it seems like a great deal but even with the secret investor how can this model be successful for the company long term?  Will Quintess always be non-profitable?  You've raised some excellent questions that UE members should have answers to before proceeding but there's just a fraction of them perusing this forum.


----------



## OneMoreTime

TarheelTraveler said:


> As discussed above, the DUO offer certainly won't be for everyone....If the investor were on the hook for the redemptions, I'd give much better odds.
> 
> 
> "Pricing for UE members ranges from 20 nights for $12,500 to 50 nights for $26,500. The Charter Membership annual dues range from 20 nights at $14,500 to 50 nights for $32,750."
> 
> Not saying that this going to happen to DUO, but from an historical perspective, isn't the reduced initial pricing, reduced dues and sweetheart provisions given to early members, one of the main downfalls to most of the clubs that went bankrupt,
> 
> Also, when Quintess threatened liquidation/bankruptcy, didn't they significantly increase dues and put all members at the same dues levels going forward,
> 
> Also, anyone know whether you can resign and immediately stop paying dues?  If so, do you lose your deposit redemption rights?  If not, it makes the case for DUO much stronger.  Anybody seen the contract?
> 
> *In additon I have not been able to find the nightly fee's for DUO- I know Big Q charges $275 per night for usage-  Does anyone know ?*


----------



## Kagehitokiri2

http://quintess.com/membership/m320

i think its been a little while since they changed their plans back to not having nightly fees?

duo
UE $530 > $625
charter $655 > $725

tour ?

Q $1120, $1134, $1178

these differences are so small that they seem pointless. at least duo is rounder than Q...


----------



## EOD

TarheelTraveler said:


> Also, anyone know whether you can resign and immediately stop paying dues?  If so, do you lose your deposit redemption rights?  If not, it makes the case for DUO much stronger.  Anybody seen the contract?
> 
> In any event, as I said above, I can definitely see why a UE member would join.  At least this time, I assume UE members will be much more likely to do the due diligence.



I think most of your concerns can be addressed with a good lawyer reviewing the contract.  Since members have almost no skin in the game here, if they just quit and default on dues, they only lose the minimal up front fee (say Q triples dues, you just walk away).  That said, I can't imagine Duo would pay you a deposit refund if you quit paying dues--it makes no sense.  The whole point is that you get 100 members to join now, have insta-DC and then start building on a solid critical mass.  The first 100 members must be hardest to acquire (every club has offered sweetheart deals, every pre-IPO has an early equity round, et).  Once they have those 100, they can build a club , add destinations.  The compensation for the joiners is possible future deposit out of 25% future fee cash flow.

To the comment above about who would join at full price after others paid discount price.   Have you ever paid more than the IPO price for a stock?    initial investors (private equity, ipo buyers, etc) get paid for taking more risk as will the initial UE members of the DUO club.   We can debate all day whether there is long-term viability for the industry or if this club makes it.   This board is littered with doomsayers or A&K members trying to tout product.  

so get a lawyer and do math.  I would have concerns about changes in the industry after watching every DC do some pretty random sh*t last 4 years.


----------



## OneMoreTime

Kage- that does not mesh with what they say on *their* site- total per night cost, including opportunity cost for Q is $2613 per night including opportunity cost based on the 30 night plan. 

With DUO, a 2MM house should cost , say 5% per annum to operate. Not a lot of upside for the Q folks even if they could have it occupied 65% based on a 240 day season. Why create a new loss leader when their is already a pretty established leader....


----------



## Desties

Checking out the 3-bedroom villa rates in Stowe is another eye-opener for DUO's iffy value.

On a weekly basis during ski-season, it's $685 a night or less (slightly higher during the 3 holiday weeks, and a lot lower during the rest of the year).

This isn't the same kind of rip-off math for the South Beach property, but it's still not the kind of stuff that someone would want to prepay given the likely limited availability during ski season itself. 

DUO will get more than the dozen it presumably has in tow because it's the cheapest alternative -- but it's no bargain.


----------



## Kagehitokiri2

Desties said:


> DUO will get more than the dozen it presumably has in tow because it's the cheapest alternative -- but it's no bargain.


second home destinations is missing out by not having an offer right now

from worldhotels 
http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_154.pdf


> It is fairly obvious to even laypeople that the intention of this Chapter 11 is really to liquidate to the secured creditor in a guise and manner which seems contrived to avoid responsibility to as many other parties as possible, without regard for the benefit or burdens associated therewith.


----------



## willmyclubmakeit

*rejected member agreements*

why are these member agreements being rejected? any clues?


----------



## Bourne

Kagehitokiri2 said:


> second home destinations is missing out by not having an offer right now
> 
> from worldhotels
> http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_154.pdf



It does have one and has actively started contacting prospective members


----------



## Leonardo

willmyclubmakeit said:


> why are these member agreements being rejected? any clues?



Which member agreements are being rejected?  Lawsuit settlements or the membership agreements themselves or something else?


----------



## willmyclubmakeit

*see above*

see Kag's post and link for member agreements rejected (1 is a friend of a friend and I am tempted to ask them.   Something seems amiss):


.

http://www.bmcgroup.com/restructurin...=1-10-bk-12915
rejected contracts >
68 membership agreement
1 settlement agreement
2 employment agreements (JT and RK)
1 assignment agreement (with Q)
1 director compensation plan (mcmillen - SAAC)
2 engagement letter >
- roth capital partners LLC
- maxim group

so, why only 69 members here...?


----------



## TarheelTraveler

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

"Second Home Destinations, the new rebranded version of The Phoenix Club, may not have officially launched, but like many of their competitors, they are actively pursuing the members of the bankrupt Ultimate Escapes. The young club plans to make their formal introduction to the market later this month, but has contacted us exclusively about the special promotion they are offering to Ultimate Escapes members. 

Second Home Destinations will offer members of Ultimate Escapes a one year trial membership with no membership fee. Using a points based reservation structure, members will be able to purchase up to 16,000 points for stays in the club's portfolio of residences, with properties beginning at roughly 100 points per night. 

The four one year trial membership options available to Ultimate Escapes members are: 

•4,000 Points: $4,950 Annual Dues
•6,500 Points: $7,700 Annual Dues
•9,500 Points: $10,945 Annual Dues
•16,000 Points: $15,950 Annual Dues
The typical property within the Second Home Destinations portfolio will average approximately 300 points per night, meaning that a member at the 4,000 point level can expect nearly 14 nights of travel."


----------



## Kagehitokiri2

website (original "phoenix club" down. new one = ?) >


Kagehitokiri2 said:


> $10K > $80K ($25K > $80K 75% refundable)
> 
> and these deposits support portfolio expansion?
> 
> no info on points yet, other than "During the off-season, the points can value as much as two to three times more vacation time"
> 
> price per point (annual / additional)
> 1.13 / 1.30
> 1.08 / 1.20
> 1.05 / 1.10
> 0.91 / 1.00


new >


TarheelTraveler said:


> properties beginning at roughly 100 points per night.
> 
> •4,000 Points: $4,950 Annual Dues
> •6,500 Points: $7,700 Annual Dues
> •9,500 Points: $10,945 Annual Dues
> •16,000 Points: $15,950 Annual Dues
> 
> The typical property within the Second Home Destinations portfolio will average approximately 300 points per night


price per point >
1.24
1.18
1.15
1.00

i guess i should correct my earlier statement - they have an offer, but how do they communicate it?


----------



## Leonardo

willmyclubmakeit said:


> see Kag's post and link for member agreements rejected (1 is a friend of a friend and I am tempted to ask them.   Something seems amiss):



Very interesting; let us know if you find anything out...


----------



## travelguy

Kagehitokiri2 said:


> i guess i should correct my earlier statement - they have an offer, but how do they communicate it?



They contacted us and left a long, rambling message on an unlisted phone line which we never give out and rarely use anymore.  The offer was to "HCC former members".  The only way they would have this phone number was through the old HCC member list ... wonder if they paid the HCC BR Trustee for that?


----------



## willmyclubmakeit

*rejected member agreements*

I heard from someone still within UE that the rejected member agreements were for resigned members and in effect UE was rejecting requirement to resell/remarket/repay the "deposit" as if they had funds to do that.


----------



## Leonardo

travelguy said:


> They contacted us and left a long, rambling message on an unlisted phone line which we never give out and rarely use anymore.  The offer was to "HCC former members".  The only way they would have this phone number was through the old HCC member list ... wonder if they paid the HCC BR Trustee for that?



They didn't need to pay for it; HCC distributed the entire membership excel file to all members, remember?  Supposedly a 'locked' file, but opened right up with google docs...


----------



## travelguy

Leonardo said:


> They didn't need to pay for it; HCC distributed the entire membership excel file to all members, remember?  Supposedly a 'locked' file, but opened right up with google docs...



I thought of that but I went back and looked at that excel file (kept it when I was mod of the HCC forum on DC4MS) and it has our published number, NOT the unpublished number that was called.  Interesting ...


----------



## Kagehitokiri2

trump (owed $500k) objects >
http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_178.pdf

filed today to delay auction scheduled for monday? or will it be ignored?

scheduled to have auction monday and sale hearing wednesday...


----------



## ClubsRDead

No update as of yet from the bidding wars??  So excited to find out which less than sustainable entity is offering a plan that involves us putting more of our cash into their pockets to buy (or lease) overpriced homes....sounds like the Demeure / McGrath folks have tried to make some sort of impression from reading the blogs on the other forum.  Anyone heard anything?  By now one would have thought CRO followed up on his email as of last night.


----------



## BetterClient

*Here's some DC Math......*

The good folks at ER would like me to join their club full fare plus a holiday premium. Let's see on a 40 night a year plan that means upfront, $479K, and $40K a year. Divide that cost per night over 3  years it equals $4333 per night, over 5 years equals $3395. Does anyone, anyone at all here think I can't beat that via VRBO? Think for between $3400 & $4300 a night on average-the family can stay in palaces.

Anyone disagree with the math?


----------



## NeilGoBlue

Don't you get some of that money back if you resign?


----------



## ClubsRDead

NeilGoBlue said:


> Don't you get some of that money back if you resign?



Hahaha....how?  They have just shy of 500 folks on their redemption list....there will be NO resigning....


----------



## Kagehitokiri2

so ER has replaced the half now half 10 years later with the newer 4 year etc offers?


----------



## ClubsRDead

Kagehitokiri2 said:


> so ER has replaced the half now half 10 years later with the newer 4 year etc offers?



That might make sense if the product itself was something that people were still buying.


----------



## TarheelTraveler

ClubsRDead said:


> No update as of yet from the bidding wars??  So excited to find out which less than sustainable entity is offering a plan that involves us putting more of our cash into their pockets to buy (or lease) overpriced homes....sounds like the Demeure / McGrath folks have tried to make some sort of impression from reading the blogs on the other forum.  Anyone heard anything?  By now one would have thought CRO followed up on his email as of last night.



By other forum, do you mean the UE member forums or something else?  Just thought that I would note that Rob McGrath is no longer on the Demeure website.  It'll be interesting to see how this turns out.

Additional Duo article:

http://www.sherpareport.com/destination-clubs/destination-club-duo-by-quintess.html


"One big question that I had for Ben and Todd was how Club Holdings could be so generous to the Ultimate Escapes members, by offering such a low joining fee. After all, many clubs have folded over the past couple of years, and a large number of them simply got their math wrong and did not charge enough - either in initial fees or annual dues. Here's the summation of their answers.

Club Holdings has an investor who has committed $210m in equity funding to grow the company. This investor is providing $20 million in funds and Club Holdings is providing a further $25 million in initial property to launch the new club. As noted above, most of the initial DUO homes are former Quintess homes. "The investors recognize that now is a good time to buy real estate" said Ben.

"At the current levels the annual dues cover all operating costs and interest costs for the club,' continued Todd. This is certainly critical and was one of the areas where Ultimate Escapes failed.

Even so, the fact that Club Holdings is offering to pay back Ultimate Escapes members 75% of the then current membership fee seems remarkably generous. Club Holdings is only asking these members for $12k to $26k, but in the future will have membership fees of $112k to $245k. Ben explained that all DUO members will be subject to a four in, one out resignation policy, so that as these members leave four new ones must join. Some of the funds from these four new members can then be used to redeem the leaving member."


----------



## NeilGoBlue

ClubsRDead said:


> Hahaha....how?  They have just shy of 500 folks on their redemption list....there will be NO resigning....



I didn't realize there resignation list was that high.


----------



## ClubsRDead

TarheelTraveler said:


> the fact that Club Holdings is offering to pay back Ultimate Escapes members 75% of the then current membership fee seems remarkably generous.



I'm not sure that "generous" is the word to use here....

JT offered to pay us all back 50% to 80% of our fees paid to TH too.  That's worked out real well....


----------



## Kagehitokiri2

TarheelTraveler said:


> Club Holdings has an investor who has committed $210m in equity funding to grow the company. This investor is providing $20 million in funds





Kagehitokiri2 said:


> Kagehitokiri2 said:
> 
> 
> 
> 
> 
> ClubsRDead said:
> 
> 
> 
> They claim their "mystery" investor has agreed to the acceleration of some $20MM of the $210MM remaining "available" funds.
> 
> 
> 
> now that is "interesting"...
> 
> $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?
> 
> Click to expand...
> 
> 
> 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...
Click to expand...


so how exactly is the investor providing $20mm to duo?

$147mm over 2011 2012 2013 2014 2015 2016 2017

dues hike in 2018 to cover interest payments? (2017 if $20mm to duo?)


----------



## TarheelTraveler

TarheelTraveler said:


> "At the current levels the annual dues cover all operating costs and interest costs for the club,' continued Todd. This is certainly critical and was one of the areas where Ultimate Escapes failed.



Not trying to be cynical, but what does "At the current levels the annual dues cover..." mean?  Does that mean the dues with the dozen or so members that have signed up, the members "in the pipeline," the fully subscribed level of 300+ members or something else?  Also, what expenses are excluded from that statement?  I assume principal payments on debt and sales and marketing, but it's not really clear.  How are management expenses allocated?  Again, not trying to be cynical, but I guess I am after seeing the DC industry operate over the years.  What is not said is typically more important than what is said.  I know that there won't be financials because the club is too new, but would be interesting to see the pro formas.  

In fairness to Club Holdings, at least they've got an equity investor that appears to be subsidizing the start up, unlike most clubs that started primarily on the backs of members (i.e., clubs that used the deposits for operational expenses rather than buying real estate).


----------



## AKTHUE

TarheelTraveler said:


> In fairness to Club Holdings, at least they've got an equity investor that appears to be subsidizing the start up, unlike most clubs that started primarily on the backs of members (i.e., clubs that used the deposits for operational expenses rather than buying real estate).



I am skeptical when they tell you they have an equity investor but the identity and terms of the investment are confidential. I've just heard too many stories from promoters to believe anything that isn't in writing and can't be verified.


----------



## Buon Viaggio

ER has been back to normal monthly resignation levels for most of this year.  The total list still hovers around 400, perhaps less right now.   I believe the redemption for new members is 70% or 75% of your base deposit - Holiday fee is non-refundable.  Many members have upgraded this year and I think at last count 150 new members have joined.  I think members plan to stay longer than 3-5 years but of course things happen (economy!) but why would you bother joining any club for just 3 years?  It's hard to travel any other way once you're in a great club.


----------



## Kagehitokiri2

"At the current levels the annual dues cover all operating costs and interest costs for the club,'

1. which club? duo only? didnt Q member or Q say investor covers interest for Q?

2. if duo, what/when? like EE saying, oh its covered by this, but leaving out the huge increase in dues if debt cap is reached, and/or they stop getting interest income from deferred deposits.

3. what is going on with the investor

*AKTHUE*, remember that people have figured out the investor... they just didnt post. just a couple quotes from filings that were their first clues or whatever.


----------



## Desties

*Crummy RAP math*

Like most/all UE members, I just got the email to let me know what my member # is in the Schedules of Assets and Liabilities, showing me what my RAP is in UE's balance sheet.

It doesn't matter. We won't be seeing any of it. However, in my case as a PE Legacy member, I see that the RAP clock began ticking when I signed the deal. 

Makes sense, right? Well, it's messed up, because when folks wanted to resign earlier this year -- 18 months after signing the UE paperwork -- they were told that the clock toward 18 months for resignation eligibility didn't begin ticking until when the merger was approveda year later, so they couldn't resign until early NEXT year. If that's the case, then the RAP clock should have started ticking when the merger was completed as well.

Again, I'm nitpicking over phantom liabilities, but it's just one more way we got hosed.


----------



## TarheelTraveler

http://www.destinationclubnews.com/...firm_They_Did_Not_Bid_On_Ultimate_Escapes.php

"Last week, Ultimate Escapes Chief Restructuring Officer Sheon Karol reached out to members predicting at least one bidder for the world's second largest destination club as they make their way through their bankruptcy filing. 

"I wanted to send this status update to you as we are close to resolution of the future of the company," Karol wrote members. "Tomorrow, October 15, 2010, is the deadline for submission of bids for the purchase of the company’s assets and the auction is set for Monday, October 18, 2010. The sales hearing will be on Wednesday, October 20, 2010. I am pleased to tell you that we believe that we shall receive at least one bid that provides for operation of properties by another company." 

Who this potential bid will come from is not yet known, but it will not be coming from the top of the destination club sector as the two largest active clubs, Exclusive Resorts and Quintess, have both confirmed that they would not be purchasing the club."


----------



## DCTraveler

*List*



willmyclubmakeit said:


> I heard from someone still within UE that the rejected member agreements were for resigned members and in effect UE was rejecting requirement to resell/remarket/repay the "deposit" as if they had funds to do that.



That's odd.  I'm a resigned PE member and I'm not on that short list.


----------



## Kagehitokiri2

yet another rental broker (calling itself DC)
http://www.boundlessjourneysclub.com/
surprisingly, connected to well reputed tour operator


----------



## TarheelTraveler

Kagehitokiri2 said:


> yet another rental broker (calling itself DC)
> http://www.boundlessjourneysclub.com/
> surprisingly, connected to well reputed tour operator



Interesting.  I didn't see any details on the properties though.  Also the $5,000 dues are not ever suppposed to increase for the first *500* members, which seems a little odd, considering that the concierge and travel planning costs covered would presumably increase each year.  Seems like the industry would be smart to get away from supposedly locked in perpetual pricing for early members.

These sorts of arrangements have their pros and cons, and the cons are typically glossed over, just like DCs gloss over their negatives.  Off the top, it seems like the big advantage is no deposit and, therefore, no club risk or downside investment risk.  Also no long term commitment.  The disadvantages would seem to be no upside investment potential, no ownership, so you're subject to whatever the lease costs are in the future (i.e., the nightly fee), and less standardization and consistency in house specifications, amenities and operations.  I'm curious whether the properties will be exclusive to the Club or if it will consist of excess inventory like some other "lease clubs."


----------



## Kagehitokiri2

$5K is a lot for *just* membership - for example quintessentially and amex centurion are less

IIRC there has not been a (public) rental broker with exclusive properties, but discounts are always possible


----------



## ClubsRDead

I'm not sure that paying anyone a "fee" for membership whereby in addition you just pay market nightly rates makes a bunch of sense.  Unless you just want to remove the headache of having to do your google searches yourself.


----------



## BetterClient

*What are you going to do now that UE is dead?*

Looking at all my options now that UE is for all intensive purposes, dead without any hope of recovery. 

What are the other members looking at? 

VRBO? Lots of work-but it does create savings and no upfront costs. 

DUO? Not wowed with locations or venues. The Carlyle & the Von Trapp Lodge, please! So 1980's. 

ER? Not if a full fare option is the only one choice there. 

Q? Again, not if a full fare option is the only choice there. 

Demure? Rob McG didn't burn me-would sooner do business with Christian K. 

EE? Can't follow their math. 

Renting timeshares? There are lots of choice units available for rent. 

Perry-what's your thought here?


----------



## Kagehitokiri2

second home destinations 
HCC offer http://destinationclubnews.com/News...duces_Offer_For_High_Country_Club_Members.php
recap - UE offer http://destinationclubnews.com/News...resents_Offer_To_Ultimate_Escapes_Members.php

if EE wants to do lonestar, now might be a good time

same for luxus if they want to launch a US club or open up to US members


----------



## Desties

*Sheron strikes back*

Well, this _could_ be promising -- though I'm out if it involves sending in good money after bad. . . 

_Dear Ultimate Escapes Members,

I am delighted to inform you of the results of yesterday’s Auction.  Subject to the necessary approvals, the Company accepted bids for a number of assets, including a bulk bid that may allow members  to vacation in most of the homes to which you are accustomed to travel. 

Details are being finalized and will be presented to the Court tomorrow at the sales hearing for approval.   Soon thereafter, we, together with the successful bidder for the bulk properties, will be in touch with you regarding proposed membership benefits and future plans.

We believe this would be a very good result for members, and we look forward to being in touch soon.

We thank you again for your support.  If you have questions, you may continue to submit questions via email to bankruptcy@ultimateescapes.com.

Thank you,

Sheon Karol
CRO_


----------



## travelguy

Kagehitokiri2 said:


> second home destinations
> HCC offer http://destinationclubnews.com/News...duces_Offer_For_High_Country_Club_Members.php



Still no website for Second Home Destinations?  How can they expect to operate without this?


----------



## Desties

Desties said:


> _Soon thereafter, we, together with the successful bidder for the bulk properties, will be in touch with you regarding proposed membership benefits and future plans._



I wonder how this will play out. Even if the "bulk bidder" got all 70 homes, obviously they can't service 1200+ members. Membership would be cut in half. Operating costs per member would climb. Who knows what the fee structure will be here, or if there will be an initial outlay required. 

I guess it would be telling if we found out WHO was the bulk bidder, but at least it's better than a total liquidation even though I get the sneaking suspicion that I'm going to be part of the half that walks away at this point.


----------



## Kagehitokiri2

*travelguy*, theoretically they might? seems odd they took down phoenix site, instead of just moving it.

indeed *Desties*, how many properties were in the "bulk" bid. funny how details continue to be vague.


Kagehitokiri2 said:


> http://docs.bmcgroup.com/ultimateescapes/docs/deb_1-10-bk-12915_143_1.pdf
> total $65mm, breakdown >
> 23 elite* $210k* (lake las vegas) > $3.99mm (maui)
> 26 signature $369k (scottsdale) > $1.14mm (miami beach)
> 19 premiere $217k (colorado) > *$1mm* (new york city)
> (68 total)
> 
> plus >
> private retreats paradiso ltd $6,120,000 (nevis - 7?)
> private escapes TCI ltd $1,890,000 (turks and caicos - 4?)
> private escapes borgo di vagli llc $500,000 (tuscany - 3?)



*BetterClient*, re Q investor, why not post?
http://tugbbs.com/forums/showthread.php?p=986253#post986253


----------



## OneMoreTime

*Vague, or elusive?*

Who is going to pay for the ongoing expenses of the Club for the next 30-60-180 days? Will Demeure pay to open up Member Services again, since Cap Source scheduled the DIP to be done on Wednesday, to try to poll the Members? I wonder how many Member's have to say yes without time to digest the details of paying to be in a "buyers group" and maybe get below rack rates from an internet based open booking system?

I can't wait for Sheon's all member call to explain the benefits of this transaction.


----------



## Kagehitokiri2

OneMoreTime said:


> Who is going to pay for the ongoing expenses of the Club for the next 30-60-180 days? Will Demeure pay to open up Member Services again, since Cap Source scheduled the DIP to be done on Wednesday, to try to poll the Members? I wonder how many Member's have to say yes without time to digest the details of paying to be in a "buyers group" and maybe get below rack rates from an internet based open booking system?
> 
> I can't wait for Sheon's all member call to explain the benefits of this transaction.


demeure eh, so back to their partial ownership model.

- # of properties and $?
- what $ do they want from members, and are they talking equity?

...

second home destinations must not have site, or they would have told someone i just asked about it. very odd considering phoenix site. and when you have points, you need to know the point range...


----------



## ClubsRDead

OneMoreTime said:


> Who is going to pay for the ongoing expenses of the Club for the next 30-60-180 days?



Simple question, simple answer.  We (the members) are, apparently.  

If I understand correctly, the Demeure "bid" is based on them trying to buy a small number of "coveted" homes (not sure which those would be), having Cap Source carry the paper, and leasing a large majority of the remaining ones from CS who retains ownership and right to sell.  Lease costs alone with Ops would be, let's say $1MM per month?  So what's next, put their hands out to us and ask 1000 to pay $1000, or 500 to pay $2000, or whatever?  And do this each month?  So we're back to $25k per year of dues, give or take?  

What happens when we want to use one of the "other" homes on their web site?  Easy - we pack rack rate, right?  But would we be allowed to use the ones from UE for no nightly cost since we're likely going to have to upfront the carry costs?  Well that's problematic too, because there's too many of us to cram into those homes unless we all start traveling together as friends.

The equity models where we OWN something are looking better and better.  But at this point, so is VRBO...

Nice job, CRG and Sheon - you "sell" us to someone provided that we once again front the purchase price, and now even worse - the rental costs?

Maybe we'll get lucky and the UCC and Judge will laugh all over this.


----------



## DCworker

If any of you rich members do some math you will see that you can travel other ways for cheaper and might not have to send in your complaints about all the properties.  This latest deal is a joke and may get some planners paid a while longer but when you see what they have in store for you and the homes you will just start renting or buy your own homes.  Its funny the pool we have betting on which of you will once again write checks to someone you dont know who have done no diligence on then be pissed later when it doesnt work.


----------



## Kagehitokiri2

buy some and lease more? what do they want from members? not equity. up front for buy and then annual for lease and operate?

isnt second home destinations mainly leasing as well? although they have option for decent sized deposit. but leasing is only real option for no-deposit. that concept was discussed more on DC4MS, post HCC.

for an equity club, EE also has a high target for leases, but they described how thats built into dues.


----------



## Leonardo

DCworker said:


> Its funny the pool we have betting on which of you will once again write checks to someone you dont know who have done no diligence on then be pissed later when it doesnt work.



Hope no one bet on me writing another check!


----------



## travelguy

Kagehitokiri2 said:


> *travelguy*, theoretically they might? seems odd they took down phoenix site, instead of just moving it.



Especially since I thought Bourne said he was a consultant for Second Home and his business is web sites!


----------



## Bourne

travelguy said:


> Especially since I thought Bourne said he was a consultant for Second Home and his business is web sites!



Technically, I did not say anything...on the record, that is... 

And for the record, my sugar mom   is an old Gray Lady on LaSalle Street. And no, the business is not technically websites... it helps bean counters that work for these Grey Ladies count their beans better. :hysterical:


----------



## Bourne

Another rule in business... 

Thou shalth not do business with these fickle minded 20 somethings that may look hot and s***, but in the end will pump and dump you. Stick with the sugar moms...


----------



## Kagehitokiri2

http://destinationclubnews.com/News_The_2010_Outlook_Letter_From_Jim_Tousignant.php

sigh. good luck to UE members.

was just checking emails. emailed elan collection (fractional plus) recently and 6 months ago - no response.


----------



## ClubsRDead

*NEW 5 Week DIP Extension*

Well they have done it again, posted another DIP budget.  $1.3MM+.  $720k of new professional fees (absent from this however is any fees for the UCC, which is peculiar).  Claims agent expenses gone, filing fees, etc.

Still paying "board fees" of $4k / week and office rents for both KC and FL so we can assume JT is still riding this train somehow.

They zeroed out the columns for "wind down" disbursements and "contingency" so this must be the end.  They also have limited to no field expenses.  Payroll and employee expenses seems high.

Anyone have any clear picture or insight as to what is going on here?

I suspect they are just preparing for shut down in lieu of Demeure knocking one out of the park tomorrow on the conference call, but don't see how that can even come close to happening.


----------



## willmyclubmakeit

*status*

not sure of the status but I did get an email from Phil, CFO, and he said he has left UE so I'm not sure who is in the Florida office any longer (maybe it has some computer equipment and files).

Looks like the CRO and attorneys at least will get something out of this--but not us...normal for  a BK unfortunately.


----------



## willmyclubmakeit

*offices and the like*

I was told the office space is being used by the attorneys working on the closings and the rent is $6500 (and its a one month lease)....not enough for JT's car payment I suspect.


----------



## TarheelTraveler

At the risk of being repetitive (earlier comments) (of course that has not stopped any of us before):


TarheelTraveler said:


> Interesting.  I didn't see any details on the properties though.  Also the $5,000 dues are not ever suppposed to increase for the first *500* members, which seems a little odd, considering that the concierge and travel planning costs covered would presumably increase each year.  Seems like the industry would be smart to get away from supposedly locked in perpetual pricing for early members.
> 
> These sorts of arrangements have their pros and cons, and the cons are typically glossed over, just like DCs gloss over their negatives.  Off the top, it seems like the big advantage is no deposit and, therefore, no club risk or downside investment risk.  Also no long term commitment.  The disadvantages would seem to be no upside investment potential, no ownership, so you're subject to whatever the lease costs are in the future (i.e., the nightly fee), and less standardization and consistency in house specifications, amenities and operations.  I'm curious whether the properties will be exclusive to the Club or if it will consist of excess inventory like some other "lease clubs."



Kage's and CRD's comments:

yet another rental broker (calling itself DC)
http://www.boundlessjourneysclub.com/
surprisingly, connected to well reputed tour operator

$5K is a lot for just membership - for example quintessentially and amex centurion are less

IIRC there has not been a (public) rental broker with exclusive properties, but discounts are always possible

I'm not sure that paying anyone a "fee" for membership whereby in addition you just pay market nightly rates makes a bunch of sense. Unless you just want to remove the headache of having to do your google searches yourself.


Separately, how was the Demeure webinar?  Did the unknowns get clarified some?


----------



## ClubsRDead

TarheelTraveler said:


> Separately, how was the Demeure webinar?  Did the unknowns get clarified some?



It's tomorrow.  PM me with your email and I will send you a link, more than welcome to attend I presume.  They say it's "limited to the first 1000 responders," so you know there will be many sad souls who can't get in and will be extremely heartbroken.


----------



## OneMoreTime

*10K + to Florida?*



willmyclubmakeit said:


> I was told the office space is being used by the attorneys working on the closings and the rent is $6500 (and its a one month lease)....not enough for JT's car payment I suspect.



Unbeleivable that the Estate is allowing even a penny to make it to JT and crew...


----------



## Leonardo

Dear Ultimate Escapes Members,

It has come to our attention that our members are receiving emails from unknown parties offering information and requesting your contact information.  Please be aware that neither Ultimate Escapes nor Demeure has authorized these emails.  We recommend that you exercise caution before providing any of personal, financial or contact information to unauthorized parties. 

Thank you,
Sheon Karol, CRO


----------



## Leonardo

> Dear Ultimate Escapes Members,
> 
> It has come to our attention that our members are receiving emails from unknown parties offering information and requesting your contact information.  Please be aware that neither Ultimate Escapes nor Demeure has authorized these emails.  We recommend that you exercise caution before providing any of personal, financial or contact information to unauthorized parties.
> 
> Thank you,
> Sheon Karol, CRO



Dear Mr. Karol,

Thank you very much for your sage advice.  In fact, less than an hour after receiving your advisory notice, I received an unauthorized solicitation; in person, no less.  How they found out my home address, and gained access to our gated community is a mystery, but my doorbell rang, and a pair of clean-cut folks in green uniforms offered to provide me with ‘quality baked goods’ at a future time, in exchange for a cash payment up front.  I asked them if Ultimate Escapes had authorized this solicitation, and they acted as if they had no idea what I was talking about!  The nerve of these folks; trying to sell me cookies without the consent of my bankrupt destination club!  

I really don’t know what would have happened to my hard-earned money without you and your colleagues looking out for us!

With eternal gratitude,
Leonardo


----------



## Kagehitokiri2

hope the cops got em! i mean really, who wears green uniforms? quite suspect.

oh, the joys of hyperlitigiousness. seriously though, was there a pattern?

http://destinationclubnews.com/News_Demeure_Prepares_For_Ultimate_Escapes_Transition_Webinar.php


> For months, Ultimate Escapes members have largely been kept in the dark. In *June*, the club was unable to make their monthly interest payment to lender CapitalSource, putting them in default of their loan agreement. The same happened in July. Then August. And September. Despite the dire financial position of the world's second largest destination club, members wouldn't be updated until *September* when President and CEO Jim Tousignant announced "We are in crisis."


----------



## TarheelTraveler

http://www.fractionallife.com/news_...nsors_spears_wealth_management_awards1309.asp

"Property investment Fund and destination club The Hideaways Club is the headline sponsor of this years’ Spear’s Wealth Management Awards.

The event - described as the Oscars of the private banking world - will be held at the Saatchi Gallery in the Kings Road, London on November 22nd and will be hosted by CNBC’s Ross Westgate and Spear’s Editor-In-Chief William Cash.

The awards, given to the most deserving innovative companies and individuals, will be attended by 500 of today’s most successful, influential and wealthy individuals from high finance, private banks, law firms and society."
... 
"The Hideaways Club chairman Mike Balfour OBE is a keynote speaker at the Shared Ownership Fractional Sumit Middle East in Abu Dhabi on November 24."


----------



## TarheelTraveler

*Quintess*

http://destinationclubnews.com/News_Quintess_Posts_Successful_Sales_Month_in_October.php


"...During the course of 2010, the club has grown via 30 membership transactions, inclusive of new members and upgrades. This growth can primarily be attributed to the club's existing members, where nearly 90% have referred friends and colleagues to Quintess...."

"...We design and operate all of our clubs, so that the members' dues cover all the operating costs of the club," said Ben Addoms, Co-Founder of Quintess. "A number of destination clubs were built from the beginning with the idea of very low annual dues and that companies would make money by investing in real estate and retaining the gains, implied or actual, when the homes were sold. To be sustainable, a club has to have dues that cover operational expenses. Today, Quintess member dues cover all the operating costs of the company, DUO member dues will cover all the operating costs of the company, and Tour Club member dues will cover all the operating costs of the company...." 

Is he saying this includes Quintess previously or is he saying other clubs did this?

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


"...The three bedroom, three bath ski-in/ski-out property in the heart of Snowmass base village includes a wrap around outdoor living are and outdoor sound and overhead heating elements. Capable of sleeping up to eight guests, the second floor unit includes two king master suites and one bunk room...."

"Four more properties are slated to be added to the club's portfolio in the coming months, including Paris, France; Scottsdale, Arizona; Costa Rica; and a six bedroom home in Kapalua in Maui, Hawaii that Capes identified as one of the best properties in the destination club industry when we spoke with him today...."


----------



## Kagehitokiri2

99% sure Q members if not Q themselves said forbes 400 investor pays interest. which i presume is why they focus on "operating" costs in that quote. kind of hard to "operate" without real estate.


----------



## SciFrog

This is also why they offer higher average priced homes than others.


----------



## EOD

*canouan*

Sci Frog: you been to Canouan?  I'm going soon.  flights were actually easier than i thought via charter.   Any tips?   

I was shocked, the resort charges 1800 for 1 br ocean view suite a night--makes Q house seem like a real bargain.


----------



## Kagehitokiri2

3BR $3,600 > $11,400
4BR $5,760 > $13,200
(not sure which floorplan Q's are)
do you have the option of paying the $1,200 > $3,000 more for butler, chef, meal plan, alcohol? 
(meal plans worth $980 for 8 adults)

i love accidentally finding this stuff >
http://www.destinationclubnews.com/News_Exclusive_Resorts_Files_Suit_Against_Private_Retreats.php
(#8 @ http://www.google.com/search?q="exclusive+resorts"+ad+campaign)


----------



## SciFrog

You fly through Barbados?

No real tips except make sure you don't forget anything on the grocery list, things can take a few days to get. I have not been there since the Raffles is gone, so not sure what changed. Jennifer was both time an amazing help, they cam organize wonderful private dinners at the house. 

Are you staying at villa 20 or 17? You might also want to chichi the other two villas Q wants to get. Last make sure you drive to the top of the golf course for the sunset!

Last the catamaran trip to Tobago is really worth it IMHO.


----------



## EOD

SciFrog said:


> You fly through Barbados?
> 
> No real tips except make sure you don't forget anything on the grocery list, things can take a few days to get. I have not been there since the Raffles is gone, so not sure what changed. Jennifer was both time an amazing help, they cam organize wonderful private dinners at the house.
> 
> Are you staying at villa 20 or 17? You might also want to chichi the other two villas Q wants to get. Last make sure you drive to the top of the golf course for the sunset!
> 
> Last the catamaran trip to Tobago is really worth it IMHO.



Flying through st. lucia on way in and barbados on way back.  Q people seem to think it is hard to get to, but i have direct flights to st. lucia and back from barbados via jetblue.   then svi for last little jump.  total flight cost from nyc to canouan is 1300 per person. not cheap, but for peak holiday week (xmas) seems fine to me and no waiting between flights, so travel time is like 5 hours 20 min.   

Staying in Villa 20, thanks for tobago tip, checking into charters for that.  Not sure how resort has changed but boy it's expensive.   they have similar villas to Q's listed at 11,250 a night for the same week I go. So i pay 8400 for the week no tax, for something that costs others 78K + 20% tax and service...whew)  Even the base oceanview suites are 2700 a night.  We got lucky as someone cxl'd for xmas a few weeks ago and due to difficulty of flights no one on wish lists wanted it, so we grabbed it.   *Tip to others:  pay up a few grand for flights when the home is worth nearly $100,000 for the week *   So, i guess maybe i Don't need a Q holiday plan after all 

Kage: not sure if can get meal plan.  on the one hand we stock the home with food so we don't have to eat out all the time (i.e. leave kids with mom while we eat out), on the other, there seem to be no restaurants of value to go to so meal plan prob a good idea.   in the queue of questions to ask concierge.  Floor plan is 4500 sq feet, 3 br home + 1 br cottage (like balliceaux villas by looks of it)


----------



## SciFrog

The food was much better than typical resort food, you might be surprised. Prices however are typical, especially for wine. Canouan is quite unique. We always have had a quiet yet wonderful time. You can get the catamaran charter right from the hotel, but being holidays, I would book it now. Canouan very private and exclusive.


----------



## Kagehitokiri2

so they are the 4BR. max value = $13,200 per nt. 
(some of the 3BR have similar layout with detached 4th BR.)

butler, chef, meal plan, alcohol = $1,000 > $2,500 more per nt
(meal plans worth $980 for 8 adults)

...

http://en.wikipedia.org/wiki/Canouan_Airport
>
barbados http://en.wikipedia.org/wiki/Grantley_Adams_International_Airport (ATL, CHL, DFW, JFK, MIA)
grenada http://en.wikipedia.org/wiki/Maurice_Bishop_International_Airport (JFK, MIA)

big news >


> 19th November 2010...The new equal partnership has been formed and will embrace the CRD Group and IIU (International Investment and Underwriting), a company founded by Dermot Desmond. Mr. Desmond is Chairman of, and a significant investor in, Sandy Lane Hotel, Barbados.
> 
> ...$100m invested in the island over the next 3 years to include the building of a new boutique ultra-luxury hotel within the 1,200 acres of The Grenadines Estate and the commencement of the Glossy Bay Marina on the southern part of Canouan...


----------



## TarheelTraveler

http://www.destinationclubnews.com/...ets_As_Club_For_Destination_Club_Refugees.php


""Candidly, we believe that another major destination club bankruptcy will happen and we don't want members of these already failed clubs to join another sinking ship.""

Of course, this is presumably not from an impartial source, but what club is he supposedly referring to?


----------



## Kagehitokiri2

mainly big talk, like demeure.

but presumably Q, rather than ER.
1. Q did a UE deal, ER didnt
2. Q has 3 clubs now
3. Q has that investor covering interest
4. Q is much smaller than ER


----------



## OneMoreTime

*don't be so sure-*

Sure Q will lose it's Sugar Daddy and have to start covering their own losses, but no Club is immune from the 10% churn. That means if they are not selling at least 10% of their total membership # each and every year, they are just growing their resignation liability. 

The bigger they are, the harder they will fall....


----------



## Kagehitokiri2

will be interesting to see. i would say things become very simple with no debt, no leases, 1:1 resign. the issue with 1:1 resign is when there are different levels of membership ... of course id also say nonrefundable (fund or perpetual with surprise dividend).


----------



## TarheelTraveler

http://www.destinationclubnews.com/News_The_Discovery_Club_Creates_Special_Trial_Offer.php

I get the no deposit lease model, and I get the equity purchase vacation assets model, but I never could understand this club's model.  Why would I pay a deposit for this?  If the club's not buying real estate, wouldn't I be better off investing my money (rather than some club I've never heard of) and using the earnings from my account to subsidize these hotel stays?

I realize that the trial membership doesn't require a deposit, but their normal membership does which is the part that I don't get.


----------



## Kagehitokiri2

removed.......


----------



## ClubsRDead

It sounds as though the AK settlement is done and we should be receiving an offer of some sort soon.  Anyone have any details?  Based on the poor results that Demeure is obviously facing, the reality that a very small number have jumped on the Q bandwagon and considering that ER's resignation list is a mile long, AK might not just be our best option, but also our only one.


----------



## RLG

ClubsRDead said:


> It sounds as though the AK settlement is done and we should be receiving an offer of some sort soon.  Anyone have any details?



If you were a participant in the A&K lawsuit you should already have received your settlement papers.


----------



## Jack1234

ClubsRDead said:


> It sounds as though the AK settlement is done and we should be receiving an offer of some sort soon.  Anyone have any details?  Based on the poor results that Demeure is obviously facing, the reality that a very small number have jumped on the Q bandwagon and considering that ER's resignation list is a mile long, AK might not just be our best option, but also our only one.



While that offer might be a good one (I am not part of the suit and know nothing about the offer) I do know that at least a dozen UE members have decided to join Equity Estates.  For us it has been a great way to continue to have wonderful family vacations.


----------



## NeilGoBlue

CRD,

My family and I have enjoyed our AK membership immensely.

If you have any questions, let me know.


----------



## TarheelTraveler

I can certainly echo NGB's sentiments on A&K.

The fee request for CRG is posted.  I skimmed it, but some interesting tidbits and it does show the timeline for various negotiations and ideas (may be interesting for UE members and DC hobbyists like myself).

http://www.bmcgroup.com/restructuring/DocView.aspx?ClientID=255&DocNumber=474&CaseNo=1-10-bk-12915

Looks like the parties most interested in UE were:

Diamond Resorts (this is the timeshare operator out of Las Vegas) - looked pretty serious early on with an offer on the table and negotiations
Demeure obviously 
Mike Shelton (UE member and maybe the Fortress contact based on prior comments) - looked serious as well
Member owned club potentially managed by Bluegreen
Global Leisure Partners
Tavistock - asset sale
Waters Winery

Other interest, but not as much contact with CRG for what its worth based on my skim of the narrative (mostly just an inquiry or two again based on the skim):

RICH KEITH 
EE - for certain assets
Cross Harbor
Tower 3
Resilience Capital
Apollo
Club Holdings/Quintess

Obviously companies are not always identified and I definitely don't know all of the players involved in the saga, so take this with a grain of salt.


----------



## willmyclubmakeit

*filing*

did BK approve all of these charges--beyond the time and attendees its interesting to see D. Htsu's rental car charges over $100/day often times--what is he driving on our expense?  Also note a couple apparently nice dinners and expensive travel to/from KC.  Its nice that someone gets some benefits out of this--not us.  Also interesting the # of hours charged per working day by a few of these guys.  I always heard that BK charges run up pretty large hours and we are seeing it here (every minute thinking about us I would imagine).


----------



## Kagehitokiri2

wild stuff, thanks *TarheelTraveler*.



TarheelTraveler said:


> Mike Shelton (UE member and maybe the Fortress contact based on prior comments) - looked serious as well



shelton was TH exec who played games on DC4MS.


----------



## willmyclubmakeit

*shelton correction*

i thought shelton was the lead of the unsecured creditors committee for TH not a TH executive (but a claimant).   Is that not the case?


----------



## Desties

This weekend was the Demeure deadline, so maybe we'll learn about this next week. 

I think the club shot itself in the foot with the awkward ways it sweetened the offer along the way. A week ago, there was an email with a FAQ that indicated that any amounts not used in any particular year would carry over to the following year.

This was a major bone of contention for some -- like me (though not my only one, obviously) -- since it seemed a good chunk of annual funds paid would expire worthless. That changed, and Demeure failed to promote the point. Instead, it matter of factly tossed it out there in Q&A as if it had always been the case that the funds carry over. 

Anyway, the rather dormant nature of this board until just now tells me everything I need to know about how Demeure's acceptance is going. It's a bummer that more of the names on that potential suitor list hadn't come on stronger. Everyone's scattering in different directions, with most -- I imagine -- swearing off destination clubs entirely.


----------



## Kagehitokiri2

willmyclubmakeit said:


> i thought shelton was the lead of the unsecured creditors committee for TH not a TH executive (but a claimant).   Is that not the case?


i hear from a reliable source he was heavily involved in bankruptcy, but i have no clue on that.

he *WAS* an executive and a board member. 

example of what i get from quick search >
http://webcache.googleusercontent.c...ley&cd=1&hl=en&ct=clnk&gl=us&client=firefox-a


> Michael Shelton, a member of the company's *board of managers*, brought charges against Tanner & Haley Resorts, alleging that the company owed him unpaid compensation and expenses. The original suit sought $46.2 million. Sources stated that Shelton was an *executive vice president* of Preferred Retreats Design Group Inc., the management arm of the company, until June 2007. He is also a member of the company's board of managers. According to court documents, he was not paid for work he did between June and October 2007. As part of a settlement reached, the company agreed to pay Shelton $300,000 in exchange for dropping $46.2 million in claims. As part of the settlement, Tanner & Haley will pay him a retroactive monthly salary of about $23,000 to cover the period between June 23 and Aug. 31, according to court documents.



can someone (especially former moderator) remind me what he said on DC4MS? my vague recollection is that he was attacking AK, but i really dont remember at this point, because bill pulled it so fast (moved to moderator forum) after shelton threatened to sue. apparently bill talked to him quite extensively.



Desties said:


> most -- I imagine -- swearing off destination clubs entirely.


and one cant blame them considering the industry's behavior. whats unfortunate is that the model (in my mind - exchange free) is so great and innovative.


----------



## DCworker

*MS*

He was our boss for the last year or so at TH, was brought in by the lenders to refinance the business and then he ran the board.  Probably the only person that cared about the employees or the members.  Too bad he didn't buy UE because any of us would work for him again.  He even fired Xroads when they didnt perform and then wrote the offering with the UCC.


----------



## Kagehitokiri2

DCworker said:


> He was our boss for the last year or so at TH, was brought in by the lenders to refinance the business and then he ran the board.  Probably the only person that cared about the employees or the members.  Too bad he didn't buy UE because any of us would work for him again.  He even fired Xroads when they didnt perform and then wrote the offering with the UCC.



ok now i remember one thing he did - talked about how great michael shelton was. 



the DC industry can seriously not get any more ridiculous.

i thought all the positive discussion about TH bankruptcy was focused on CRO holly etlin 
for example - http://www.destinationclubnews.com/...hies_For_Restructuring_A_Destination_Club.php
but i dont really recall at this point what was posted on DC4MS/TUG


----------



## ClubsRDead

You might want to check your facts Kage, Holly Etlin left the employ of TH before the sale UR even closed.  In fact, it closed some year + later, that was at the direction of the board, who had terminated Xroads in July 07 for failure to perform.

It's my understanding that Etlin and Shelton are not only friendly, but have worked other projects together since.  

All the banter on this board about nothing is probably why no one ever learns anything here - or responds about anything in a positive manner.

Do we know what to expect from Demeure this coming week?  Do we know what the AK settlement provided?  Those are issues I would consider to be important in todays club environment.


----------



## TarheelTraveler

DCworker said:


> He was our boss for the last year or so at TH, was brought in by the lenders to refinance the business and then he ran the board.  Probably the only person that cared about the employees or the members.  Too bad he didn't buy UE because any of us would work for him again.  He even fired Xroads when they didnt perform and then wrote the offering with the UCC.



So both Kage and willmyclubmakeit are right then.  Interesting stuff.  He was clearly very much in the running to buy UE until Demeure got the deal.


----------



## Kagehitokiri2

what facts? i said i didnt recall, and i stated no facts or opinions about holly. thats the only name i recall recently. i guess just DCnews. i thought there was discussion on DC4MS and/or TUG, but i stopped following UE that closely after a while. although i have read everything here i believe.

related - while DCnews/veras guys (many former PE) are overly positive in their coverage, the emails ive had with some are much more frank and in line with most DC posters.

so i take it the AK deal is NDA? thats unfortunate they didnt divide it up. (some NDA some not) curious how people are responding to it and how many are joining AK.


----------



## travelguy

Kagehitokiri2 said:


> can someone (especially former moderator) remind me what he said on DC4MS? my vague recollection is that he was attacking AK, but i really dont remember at this point, because bill pulled it so fast (moved to moderator forum) after shelton threatened to sue. apparently bill talked to him quite extensively.



Kage,

My foggy recollection is that same as yours.  I remember that Shelton came quick and bullied Bill into removing the info from DC4MS (I would have done the same, life is too short to play internet litigation games).  I know that the behind the scenes talk was not favorable regarding Shelton ... FWIW.

My impression of that whole episode was that Shelton doth protest too much for there not to be some truth in the deleted posts.  Who knows??


----------



## Kagehitokiri2

http://destinationclubnews.com/News_DUO_by_Quintess_Introduces_Prelaunch_Public_Pricing.php


----------



## ClubsRDead

Awesome.  This is obviously their way to do a "hurry up and join now" like Tousignant did before everyone paid the assessment.  What it really shows is what we all know already - no one is joining Quintess' Duo program, and the "Big Q" is marred by a lengthy redemption list.

One has to assume that Ben and Pete are asking themselves right now if bringing on Healy was really a smart move.


----------



## Kagehitokiri2

http://destinationclubnews.com/News_Rocksure_Property_Partners_With_Quintessentially.php

2 new funds from rocksure, which makes 3 that theyre currently selling (not incl bravo, with only 2 units left)


----------



## ClubsRDead

*EE*

In typical fashion (further exemplifying their lack of success in making an "offer" for UE) - the folks at Equity Estates have apparently decided to make "special pricing offers" to non-UE members.  Meaning, the hocus-pocus offers they made to us for joining from our club demise (20 at XX terms, another 20 at YY terms, another 20 at "non-equity" terms) can be extended to people who aren't even members of our club.

Seems to me that the acceptance of their offer must be pretty low too.

Don't any of these clubs understand that when you "drop your shorts," so to speak, you just show how insignificant your offer really is?  Didn't Demeure learn this from continually trying to "sweeten the pot?"

If someone actually stood behind their product to where they were raising prices and validating their plans - THAT might be enticing.


----------



## NeilGoBlue

I don't think it's a negative for the equity clubs to not stray from their model.  By definition, there is very little that equity clubs can do to offer discounts.

I know this doesn't directly respond to what you are saying.   But I, for one, am happy that AK didn't make a 'good' offer.  I would be more concerned about my club if they did.


----------



## ClubsRDead

I think most of us are hopeful that AK makes a "good" offer, which merely might mean some reduced terms or benefits.  No one should expect something for nothing.

We received yet another offer from Quintess Duo today to join them - now at 50% off of what was prior published.  

Would appear that both EE and Duo have met their match, maybe AK is only one making sound decisions.  Let's hope.


----------



## TarheelTraveler

Non-equity clubs particularly have always been able to wheel and deal like used car salesmen in making the sale, much to the detriment unfortunately of the long-term sustainability.  Of course, if I was a member of one of those clubs that paid anywhere near full price, I'd feel like a complete schmuck.  Are the members of these clubs not pitching a fit at this point?  Supposedly UE had offered all sorts of vastly discounted and free memberships, so you'd think the UE members would not jump at any offers like that, but the psychology of the "deal" can be pretty powerful which I guess is what they're banking on.

I'm frankly a little surprised that EE has joined the fray, as it seems contradictory on its face to the whole model.  Maybe they're saying the net asset value of the fund has dropped but that would be inconsistent with what they've always said (i.e., bought at the bottom of the market, etc.).

I have no idea what A&K will do if anything, but in the past (at least to my knowledge), they've not ever negotiated off of whatever the published offers are, and the current promotions have come out of A&K's sales commissions versus reducing what goes in the capital account for home purchases.  The only exception that I can think of was when they dropped the prices after the housing crash, and did the pretty noble thing as far as members in mostly taking the price reductions from their commissions.  Same with the 1 in: 1 out.  They've sacrificed growth at the expense of keeping the resignation list low or non-existent.  Again, I have no idea what they'll do, but I'd be surprised if it's anything that will impact the existing membership negatively.  There will be some that will respect that decision and then some that will go elsewhere, but I guess I'd rather have it be that way.


----------



## Kagehitokiri2

its never been public what *DestiFan*'s EE deal was, and presumably others here like *3DH and* someone else who recently said theyre happy with EE

only the lusso offer was public, and *DestiFan* and others confirmed the offer(s) changed from that


----------



## TarheelTraveler

*DUO/Demeure*

Just as an FYI, I've heard that Mark Cibik is no longer with Demeure.  Anyone know why?

Separately, DUO email from Steve Healy states the following:

"sound financial business model where annual dues cover the Club's operating and interest costs"

Based on prior posts, I thought the equity investor covered the interest costs on the properties.  This says otherwise.  Maybe the explanation is this applies only to DUO and not Quintess.

FWIW, in a non-equity club, I think it makes sense for the owner of the real estate (the one getting any appreciation) to cover all (or at least a significant part) of the interest costs.  I actually think that piece of the Quintess model makes sense, particularly if you've got a contingency plan if the person paying the interest stops paying the interest.  Also, anyone know what is not covered by the dues?

The email also states that "DUO is the fastest growing destination club".  Not sure how you measure that, but wouldn't Demeure or ER likely be faster growing at least in terms of new member count?  With respect to ER, I guess you could measure it by %, so clearly starting from zero is going to result in a higher percentage than starting from 3,500.  And I guess Demeure might not be considered a DC.  I guess it doesn't really matter, given that prior clubs that are no longer around touted the same thing, so again I'm not sure that it means anything.


----------



## Kagehitokiri2

duo dues, like m private residences and hideaways, are high considering stated property values


----------



## TarheelTraveler

Some neat activities for the kids with the RC DC.

http://www.sherpareport.com/destination-clubs/ritz-carlton-adventure-passport-children.html

"...Upon arrival at one of The Ritz-Carlton destination club locations, each child is presented with a personalized passport. The passport includes a section for each Club where five stamp imprints denote different Club specific activities relevant to the respective area. After all five stamps are collected at one location; a unique, plush Ritz-Carlton lion is presented to the adventurer. After visiting a minimum of five properties and gathering 25 stamps, the child will receive a large, stuffed Ritz-Carlton lion and a signed, framed certificate. The new Adventure Passport series is aimed at children ages five to 12 years old.

Examples of activities children can participate in to earn stamps include the following:

- The Ritz-Carlton Club and Residences, Kapalua Bay
Working closely with the cultural ambassador on property, the team in Kapalua Bay developed activities for the Keiki (children) that embrace Hawaiian culture. Keiki can join the Club's Ohana (family) for a lesson in the method of haku (to braid a lei) while gaining knowledge in the history and deeper meaning of the lei, or they can learn how to hula, which is considered the heartbeat of the Hawaiian people...."


----------



## TarheelTraveler

*Hideaways - Growth in Asia*

Hideaways Club "...has announced that they plan to more than triple the number of properties in their portfolio to 100 within four years, due in large part to a great deal of success the club has enjoyed in Asia. 

Just over a year ago, The Hideaways Club opened an Asian office, looking to capitalize on an increasingly affluent market. "We are well aware of the number of high net worth individuals that reside in both Singapore and Hong Kong," said Mike Lamb, The Hideaway Club's Managing Director in Asia, in an interview last year following the opening. "Naturally for The Hideaways Club, these type of individuals fit the profile of our members - namely Chairmen, CEO's, FD's, Investment Bankers, partners of Law Firms and Medical Practices, Entrepreneurs, etc. For those who are looking to place funds into a global property portfolio with sensible returns and can see the value of subsidized luxury vacations, The Hideaways Club represents a unique investment opportunity." 

"Asia property investment is rocketing," said The Hideaways Club Chairman Michael Balfour earlier this month while in Hong Kong. According to Balfour, the club expects 30% of their planned membership growth to come from Asia in the next three years, double the growth the club saw in 2010. 

To better court this market, The Hideaways Club plans to add roughly 20 new residences in popular destinations throughout Asia such as Sri Lanka, Japan, Cambodia, and Vietnam. 

At approximately 200 members at present, The Hideaways Club will ultimately count 600 members,"


----------



## TarheelTraveler

Ritz-Carlton Vail and ER Steamboat now open.

http://destinationclubnews.com/News_Ritz_Carlton_Destination_Club_Adds_Vail_To_Portfolio.php

"...Situated at the base of Vail Mountain in LionsHead Village, two, three, and four bedroom residences are available through the club's Home Club Membership. Floor plans for the properties range from approximately 1,300 to 2,874 square feet and each unit includes fully-equipped kitchens, hardwood flooring in living areas, contemporary room finishes and more...."

http://www.destinationclubnews.com/News_Exclusive_Resorts_Opens_Steamboat_Springs.php

"...Located at the base of the gondola, the four bedroom, four and one half bath residences average approximately 2,600 square feet, each with gourmet kitchens, interior finishes such as reclaimed timber and weathered metals, and spacious dining and living areas...."


----------



## HereWeGoAgain

ClubsRDead said:


> You might want to check your facts Kage, Holly Etlin left the employ of TH before the sale UR even closed.  In fact, it closed some year + later, that was at the direction of the board, who had terminated Xroads in July 07 for failure to perform.



Actually, here are some of the actual facts.

1.  Xroads was not terminated and was still acting as the CRO (and billing) right up until the the Court's confirmation of the CH11 plan in December 2007.

2.  The sale of the assets went to contract in early 2007 and closed before the end of the year, not a "year + later" - more like 8-9 months.  Members' travel was accomodated via a "management agreement" whereby UR basically ran T&H before the asset sale closed.

3.  Etlin left Xroads (not T&H), so Xroads put in a different CRO at T&H after her departure.  The initial asset sale agreement *was* executed while she was still CRO, but UR failed to close due to financing issues and the closing was extended several times.

And to clarify, Shelton was an employee (in sales IIRC) pre CH11 who ended up on the Board after the CH11 and thus had a role in the bankruptcy as a Board member of the DIP.  He certainly was not part of the UCC in any way.

'Dem's the facts.....


----------



## Kagehitokiri2

so are people liking the settlement? surely you can say that much.


----------



## ClubsRDead

We received our settlement check first of the week and have also had conversation with AK about their offering.  The website is very vague, almost worthless but so too was the announcement they sent out.

We'll probably do something with them but we're waiting on more information now.  Encouraging, but nothing specific - maybe that's how they wanted it to be.

We also heard from our planner yesterday in KC; they've let her go and it sounds like only 1-2 planners are to be temporarily retained by Demeure and will be working from home; meaning very few signed up and a couple transitional jobs available.  No real surprise there and hopefully those who didn't get offered something will be able to find new employment very soon in this economy.


----------



## NeilGoBlue

CRD,

Are you looking at the standard offering of AK?  Or are they offering you something 'special' as part of the settlement?


----------



## ClubsRDead

AK is offering some pretty decent join in prices for settlement conversions.  They told us that we have to be part of the settlement group (they are actually confirming a lot of personal data) and have given us a deadline to enroll.  You have to call or fill out a form and spend a lot of time with them as nothing is really posted or being sent out (presumably due to the legal issues).  I suspect AK is subsidizing the difference, not the club itself.  We'll probably join after first of the year considering there are no real other options out there making any financial sense.  Biggest question is how aggressive they will be in adding club properties and where at.


----------



## AKTHUE

I'm finding AK's approach to members of the A&K/T&H settlement group to be inconvenient and cumbersome at a minimum, and it is making me wary of receiving either a hard sell or another bait and switch or unsustainable offer.

First I received a signature required overnight express mailing to the address which all of my T&H communications have gone as well as the A&K settlement. I figured this might be the offer, but all that was in the overnight mailing was an expensive envelope with a card that had a code number and asked me to go to a website to get an exclusive offer. At the website I entered my name and the code number. That took me to a form to fill out my contact details - including the same address to which A&K had just sent me the package. But when I completed it all it said was that someone would be calling me.

It feels strange and wasteful and inefficient. Just show me the offer. People who want to do everything verbally and over the phone make me feel that they don't want anything in writing - so there's no record. What's so mysterious that they couldn't mail it to me or present it to me on a website? Something feels like it is not right.

At this point I have no idea what the A&K offer is to members of the settlement group. If they were worried about confidentiality, they could have included a non disclosure agreement in the mailing to send back, but that wasn't there. Just weird.


----------



## NeilGoBlue

ClubsRDead said:


> AK is offering some pretty decent join in prices for settlement conversions.  They told us that we have to be part of the settlement group (they are actually confirming a lot of personal data) and have given us a deadline to enroll.  You have to call or fill out a form and spend a lot of time with them as nothing is really posted or being sent out (presumably due to the legal issues).  I suspect AK is subsidizing the difference, not the club itself.  We'll probably join after first of the year considering there are no real other options out there making any financial sense.  Biggest question is how aggressive they will be in adding club properties and where at.



We'd love to have you on board.  I know I'm preaching to the choir, but AK will only add properties as people join.. It's kind of the nature of the beast.  AK needs the new members equity to buy the new properties (hence 'equity club').  I have no idea of how many members settled with AK regarding the TH lawsuit, do you? (I don't know if it's 20 or 400)

But if 20-40 new members joined from the settlement, we'd get several new houses.

The only other way to get new houses is to lease a few or for AK to buy in anticipation of future demand.  Both have happened.  But I don't see AK really buying in advance, unless they really see an uptick in demand for club memberships... 

Demand for memberships is up, but it's not 'explosive' enough yet to get AK to jump out with their own money in advance and buy 10 3MM homes)


----------



## NeilGoBlue

AKTHUE said:


> I'm finding AK's approach to members of the A&K/T&H settlement group to be inconvenient and cumbersome at a minimum, and it is making me wary of receiving either a hard sell or another bait and switch or unsustainable offer.
> 
> First I received a signature required overnight express mailing to the address which all of my T&H communications have gone as well as the A&K settlement. I figured this might be the offer, but all that was in the overnight mailing was an expensive envelope with a card that had a code number and asked me to go to a website to get an exclusive offer. At the website I entered my name and the code number. That took me to a form to fill out my contact details - including the same address to which A&K had just sent me the package. But when I completed it all it said was that someone would be calling me.
> 
> It feels strange and wasteful and inefficient. Just show me the offer. People who want to do everything verbally and over the phone make me feel that they don't want anything in writing - so there's no record. What's so mysterious that they couldn't mail it to me or present it to me on a website? Something feels like it is not right.
> 
> At this point I have no idea what the A&K offer is to members of the settlement group. If they were worried about confidentiality, they could have included a non disclosure agreement in the mailing to send back, but that wasn't there. Just weird.



I have no insight whatsoever into the lawsuit and settlement talks... but based on my experience with AK, the following WON'T happen:

Bait and switch
Hard Sell
Unsustainable offer


----------



## Kagehitokiri2

only ways AK could be more conservative >

1. dump non trust properties
2. reduce 5% debt cap to 0% (potential issue only in loong term)

they have a reserve built into dues, which is more conservative than EE for example, which builds it into deposits.

i think one can say a cap (all fund style, and supposedly Q) is a conservative decision, but OTOH they pretty much all involve changes when full. so one could also say that choosing not to have changes built into the model is a conservative decision.


----------



## TarheelTraveler

Very strange, and very un-A&K like.  This from the club with a video tutorial on holiday drawings when it's really pretty darn simple or a 15 or 20 page PDF on the Ritz-Carlton exchange.

I'm willing to bet that the lawsuit settlement limited how A&K could communicate with class members.  Probably explains why you have to sign up for communications.  Also, they may not have that much information on each member (it was Quintess that bought the mailing list and member info).  Just a guess, but wouldn't be surprised at all given that it is totally contrary to their m.o.


----------



## ClubsRDead

I'm happy with how they spoke to me, the expedience in which they actually got back to me and follow up and the candor of the offer and details presented.  Considering our settlement dollars appear to be all over the board (ie, dollars received by individual) I don't know how they'd publish something that was a "one size fits all."  I was told some details would be forthcoming and for now will await that to review.  They were very clear in confirming my information so I suspect confidentiality and the terms of the settlement are the reasons for them handing it this way.  Also seems apparent, and makes sense, that they don't want nor can take everyone.  They presented several target dates which affect the offer and pricing.  We shall see.


----------



## Kagehitokiri2

2nd club from hideaways..

http://www.sherpareport.com/destination-clubs/city-collection-apartments-world.html


----------



## TarheelTraveler

*ER*

This seems to be pretty significant news for the industry.  Brent Handler is no longer with ER and has started his own company.  

"Members pay a one-time initiation fee, currently priced at $9,500, to access the Inspirato portfolio. They then pay a variable per night cost based on the properties they visit and a $2,500 annual renewal fee for every year they remain with the club. Unlike the more traditional destination club model where properties are owned by the club, Inspirato leases properties for multi-year terms. The per night market rates for the properties are dynamic, determined by how far in advance the residence is reserved, travel dates, and the length of the stay. On average, Inspirato properties will be available for roughly $1,000 per night but with some value season rates at just a few hundred dollars."

http://www.destinationclubnews.com/...Resorts_Founder_Brent_Handler_at_the_Helm.php

From Andre Agassi's Foundation website, for which he's on the advisory board:
http://www.agassifoundation.org/exclusive-resorts/

"Brent Handler founded Exclusive Resorts with his brother and a friend in 2002, offering families the comfort and privacy of a home in the world's most desirable locations, along with the services and amenities found in five-star resorts. Under Handler's leadership, Exclusive Resorts has become widely recognized as the market leader of the new luxury destination club industry. In 2003, he attracted the investment of AOL co-founder Steve Case, who presently serves as the company's chairman and is its largest shareholder.

A Colorado native, Handler graduated from the University of Colorado-Boulder with a bachelor's degree in business. He lives in the Denver area with his wife and three children."

So what's the skinny on his departure (and some others) from ER?

Seems to me that the trend in the industry is either equity ownership models or lease no ownership models.  It's interesting that a founder of the world's largest non-equity club is starting up a new club that will not be a non-equity club.


----------



## Kagehitokiri2

http://www.denverpost.com/coloradocorporatestatements/ci_17015106

http://www.inspirato.com/

incl >
- FS hualalai 
- http://www.sheriva.com/rates/rates.asp

...

are inspirato and second home destinations ever going to be more transparent?


----------



## TarheelTraveler

New Susan Kime article on Luxist regarding Inspirato:

http://www.luxist.com/2011/01/06/in...ion-club-designed-by-brent-handler/#continued

I didn't realize that Brent Handler had left ER that long ago.  Still interesting that 3 ER execs. left to start Inspirato, as well as a few more that are doing various other clubs or travel companies.

The Inspirato website doesn't have a lot of info. on it, but I will say it is a nice looking website.  It runs circles around those other new lease model DCs.  Also, their ad linked in the Luxist article is really good.  It includes some of the best themes that we've seen in the ER marketing over the years.

I frankly like this lease model better than the other ones that I have seen, because they've got longer term leases on the properties for a little more portfolio stability and at least some standardized amenities.  Nonetheless, playing the devil's advocate, I do wonder whether people will pay a membership fee to access a leased portfolio.  Also, what happens if they don't get enough members to pay for all of those leases?  What happens when lease rates start to turn around and actually start reflecting the cost of the capital invested in the houses?  Finally, it's nice that members don't have any specific time commitments, but for some that flexibility will mean less vacations and also more members will likely be needed to fill the houses to pay for the leases.  I for one go on a heck of a lot more vacations because I plan out the next 1-12 months and utilize all of my days every year.  In any event, it's an interesting model.


----------



## 3DH

TarheelTraveler said:


> Also, their ad linked in the Luxist article is really good.  It includes some of the best themes that we've seen in the ER marketing over the years.



The themes may have been good, but the piano music and crude drawings bored me to the point that I didn't even finish watching it! I would have preferred to see more photos and perhaps REAL families -- what a concept!


----------



## 3DH

*Lifestyle asset group*

Got email from them asking if I wished to stay informed...

Video linked in email shows Richard Keith, among others, who were apparently with Private Eacapes & they are based in Fort Collins. Plan looks much like EE, with date set (for them, 7 years) for selling off the properties. Can't ID any of the specific homes, perhaps some of you might. Website is: www.lifestyleassetgroup.com


----------



## TarheelTraveler

I guess that explains the narratives in the recent filed billings for the various UE advisors: discussions regarding behavior and actions of Rich Keith, drafting of cease and desist letter to Rich Keith, etc.  

The billings also mention Mike Shelton inquiring about a UE member group and document requests from Rich Keith, Jim Tousignant, Steve Healy and Quintess.

Are there any UE members who would even consider joining a destination club that was set up by folks who ran their bankrupt club?  Seems like you've got to have some chutzpah to start a new club on the heels of the prior one going under.  3DH - where do you think they got your email address from?


----------



## Kagehitokiri2

1. RK, much more than JT, had all sorts of family enrichment (holding loans, salaries, etc)

2. re charleston property >
http://img43.imageshack.us/img43/1451/picture1eu.png
http://maps.google.com/maps?f=q&sou...H-cYdrgSS9J759xOwBtWw&cbp=12,261.18,,0,-19.77
http://www.postandcourier.com/news/2008/apr/25/briefly38521/


> the club will stop offering accommodations at the Smith Street location by June 2 and the city will dismiss pending fines for zoning violations.



i find it nearly impossible to take this seriously, but

points
regional clubs (2 initial - east & west) with exchange
10-12 residences per region (2 initial plus 8-10)
says no debt, but is that all the time, or at a certain point? 4 initial residences are donated? how does that work?
doesnt specifically say no leases either.

not having pricing information online seems to be a solidly established trend now. ah, now i get it. if you use points, then you simply dont put property point values online, and can say anything you want about potential use. sigh.


----------



## 3DH

TarheelTraveler said:


> 3DH - where do you think they got your email address from?



I have absolutely NO idea, unless it was as a result of UE purchasing the DC Forums -- did they get the database of members as a result??? 



Kagehitokiri2 said:


> points
> regional clubs (2 initial - east & west) with exchange
> 10-12 residences per region (2 initial plus 8-10)
> says no debt, but is that all the time, or at a certain point? 4 initial residences are donated? how does that work?
> doesnt specifically say no leases either.
> 
> not having pricing information online seems to be a solidly established trend now. ah, now i get it. if you use points, then you simply dont put property point values online, and can say anything you want about potential use. sigh.



Hmmm... looks like someone was listening to *PerryM* -- isn't that right in line with his mantra?


----------



## Kagehitokiri2

i pointed out luxus and rocksure to *PerryM*.


----------



## Kagehitokiri2

http://www.sherpareport.com/destination-clubs/50-pct-growth-equity-estates.html

EE at 130

2010 - 44 (less than 10 in H1 and then 25 in Q4)
2009 - 30

no mention of 45 night plan which was mentioned elsewhere..

costa rica and maui arent online yet


----------



## 3DH

New Kapalua property is now on website. 

Announcement on new properties here


----------



## Buon Viaggio

Wow, I think that's the best looking house of any of the clubs in HI.  Beware the weather, though.  It's almost as rainy as Kauai on that end of Maui.
I would love to know how much that house cost.


----------



## Kagehitokiri2

definitely very nice

example of distressed prices >
http://www.conciergeauctions.com/Recent-Sales.php
4BR @ Hualalai from $4,352,000 (4,364 + 1,680 ft2 on .5 acres)
4BR @ Kuki’o from $3,850,000 (5,861 ft2 on 1.75 acres)


----------



## TarheelTraveler

Very nice new Maui property.  Definitely looks like one of the better Hawaii properties across all DCs.

Question, however.  Linked email says - "We are pleased to announce the additions of four new residences which we have purchased, located in Costa Rica, Paris, Scottsdale, AZ and Maui."

But then the website also says the Paris residence is through reciprocity and is not listed under "our residences."  Which is correct?

Also, I thought certain members had contributed time in their residences in exchange for receiving time in other residences in the portfolio (as opposed to outright purchase).  For some reason, I thought Hawaii was one of them.

3DH - So which of the houses are member contributions for specific periods of time as opposed to contributions to the portfolio or purchases by the portfolio?  Also, do you have any trips scheduled for Anguilla?  That house looks great.


----------



## TarheelTraveler

In looking at some of the UE bankruptcy filings, it is a shame how much value was lost due to that bankruptcy.  What a terrible result for the UE members and other creditors. They filed to abandon a TPC golf club membership in Princeton, NJ, 145 office chairs, 53 large filing cabines, 42 cubicles, 2 conf. rm. tables, 35 desks, etc.  Sold for $1,600 576 sheets of linens, 2 sofas, 10 pieces of artwork, china, etc.


----------



## 3DH

TarheelTraveler said:


> Also, I thought certain members had contributed time in their residences in exchange for receiving time in other residences in the portfolio (as opposed to outright purchase).  For some reason, I thought Hawaii was one of them.
> 
> 3DH - So which of the houses are member contributions for specific periods of time as opposed to contributions to the portfolio or purchases by the portfolio?  Also, do you have any trips scheduled for Anguilla?  That house looks great.



I am unaware of any people that have put homes in "exchange"...  hence, cannot answer your next question.

Yes, upcoming trip to Anguilla already on the books!


----------



## willmyclubmakeit

*UEmembers.org*

any idea what happened to ultimatemembers.org as is down today?   Is there another DC4MS deal happening?


----------



## Kagehitokiri2

http://www.airbnb.com/rooms/15667?price=1200
huh...


----------



## Desties

willmyclubmakeit said:


> any idea what happened to ultimatemembers.org as is down today?   Is there another DC4MS deal happening?



The domain was up for renewal on the 21st. It's quite possible that the owner of the site forgot to renew it or had no intention of renewing it. Either way, it seems as if somebody else snagged it and just set up a parking page.

It's a pity. The site was largely dead as members came to grips with their unfortunate fate, but there was clearly value to it as a living lesson.

I just wrote about the difficulty of having a standalone DC forum tonight.


----------



## Kagehitokiri2

i think the issue is just awareness, which was not helped by bankruptcies and DOAs

http://destinationclubnews.com/News_Equity_Estates_Announces_Newest_Destinations.php incl pics

http://www.sherpareport.com/destination-clubs/m-private-dues-lower.html
http://destinationclubnews.com/News_2010_Recap_M_Private_Residences.php


> During 2010, we decreased our debt by $400,000," said John Beckel, General Manager of M Private Residences.
> 
> Since we introduced the program that allows our members to sell on the open market, we have facilitated 12 transfers


end of 2008 ~ $6MM debt
2009 - ?


----------



## TarheelTraveler

Good to see M reduce their debt. That has been a huge expense for DCs and as we know, was a primary driver of the HCC, Lusso, UE and other DC bankruptcies.  IMHO, the loss of sales could have maybe been sustained by the clubs if they didn't have the crushing debt (and instead had used deposits as intended to buy real estate).  It never made long-term economic sense to me that the clubs with the lowest dues often had the highest debt.  Still have some of that today, but it's not as pronounced now.


----------



## Kagehitokiri2

they do still have high debt cap.

i assume the new RK club is like hideaways, with "no debt when full."

luxus/rocksure being only ones with no debt i can understand.

but AK is only one with actual debt cap.

why do others bother with cap when its 25% > 30%?


----------



## TarheelTraveler

Some non-equity clubs were 70-80% debt, and when the bottom fell out, the debt became 100%.

I don't have a fundamental problem with debt in a DC, so long as it's actually paid for by dues/investors, rather than just being used to cover up too low of dues, too low of deposits and/or too high of operating expenses.  As long as you had room to borrow, you could cover up a lot of sins using debt.  When you don't have debt, it's harder to cover up the problems IMHO.

It is nice to now see a number of clubs fully covering expenses with dues, including M from what has been said.


----------



## Kagehitokiri2

if EE used debt cap, theyd have substantial dues increase.

*DestiFan* i think it was said they discussed this along with upcoming management fee. (with prospects)


----------



## TarheelTraveler

ER sales update:

http://www.fractionallife.com/news_...0_per_cent_increase_in_sales_for_20101363.asp

"...Exclusive Resorts has announced that sales of new memberships and membership upgrades totalled $66 million in 2010, an increase of more than 50 per cent from the previous year...."

"...The company says it has built a $100 million annual revenue stream...."

http://www.sherpareport.com/destination-clubs/sales-increase-exclusive-resorts.html


"...The club told us that over 200 people joined and over 130 members upgraded their membership plans last year...."

Read more: Sales Increase 50 Percent at Exclusive Resorts - SherpaReport 

EE sales update:

http://www.destinationclubnews.com/News_2010_Recap_Equity_Estates.php

"...For the third consecutive year, Equity Estates grew by more than 50%, adding 37.5 full membership equivalents during 2010. In all, 44 new families joined during the year with 25 coming on board in the last quarter alone, bringing their total membership to just under 100...."


----------



## TarheelTraveler

*ER*

Additional ER link:

http://www.winnipegfreepress.com/bu...w-memberships-upgrades-in-2010-115000899.html


"...The private Denver-based company reports an annual revenue stream of $100 million. It didn't disclose net income for 2010, but CEO Jeff Potter says earnings before interest, taxes, depreciation and amortization were positive in 2010.

The company has tried to keep costs low. Over the last three years, layoffs have affected about 25 per cent of its work force."


----------



## NeilGoBlue

Yes,

Those pesky little things like,

Interest and depreciation don't add up to a lot.... lol...


----------



## TarheelTraveler

*Inspirato*

Inspirato:

http://www.tnooz.com/2011/02/04/tlabs/tlabs-showcase-inspirato/

"What financial support did you have to launch the business?

We raised $5 million in startup capital from individual investors."

"...We have sold more than 70 memberships in the last month, all through word-of-mouth referrals from other members.

Did you have customers validate your idea before investors?

We raised seed capital from individual investors based largely on the pedigree of our founders, who created the largest and most successful destination club, Exclusive Resorts, and had a proven track record (more than 100,000 vacations delivered) of being able to deliver the kind of service experience affluent travelers expect, along with a sustainable business model.

What is the business AND revenue model, strategy for profitability?

We earn revenue in three ways: initiation fees (introductory priced at $9,500), annual renewal fees ($2,500) and variable nightly rates. We have built a sustainable business model that requires very little capital upfront and is based on a great deal of knowledge of the market we are serving...."


----------



## TarheelTraveler

*Luxus*

http://www.fractionallife.com/news_borgo_di_vagli_welcomes_canadian_investment_group_luxus1376.asp

"Italian fractional real estate development Borgo di Vagli, a fully restored 14th century Tuscan hamlet, has seen one of its units sold to a Canadian investment company.

Il salto di gatto, a restored two-bedroom two-bathroom residence, has been bought by LUXUS Investment Group..."


----------



## Kagehitokiri2

moved......


----------



## Kagehitokiri2

i brought up planned four seasons and residences at disney world on DC4MS, hoping four seasons would manage.

now disney is doing residences, and im not sure whats going on with (still mentioned) four seasons. oddly, disney is not doing hotel rentals (giving up insane revenues?) with min lease being 6 months. so presumably DC ownership is out.


----------



## TarheelTraveler

Interesting post on DCNews Forums:

http://destinationclubnews.com/forum/general-discussion/ypo-and-destination-clubs/

"A number of destination clubs are having events for the Young Presidents Organization Global Leadership Conference in Denver this week. Over the years, Quintess has brought in over 40 YPO members to their ultra-luxury club and will be hosting daily and nightly events for the GLC. Exclusive Resorts has been giving away a trip every day of the conference at their booth. Mike Shelton, who is overseeing the growth of the Abercrombie & Kent Residence Club, is on a flight right now to attend and will be sitting down with us Friday evening to discuss the various programs that the club has in place...."

So approximately 10% of Quintess members are also YPO members?  That's pretty remarkable.


----------



## RLG

TarheelTraveler said:


> Mike Shelton, who is overseeing the growth of the Abercrombie & Kent Residence Club.



I think it's more remarkable that Mike Shelton, who was a top executive in Rob McGrath's ponzi scheme, is 'overseeing' A&K.  Sure makes me glad I didn't take A&K up on their offer to 'invest' my settlement money with them.


----------



## TarheelTraveler

RLG said:


> I think it's more remarkable that Mike Shelton, who was a top executive in Rob McGrath's ponzi scheme, is 'overseeing' A&K.  Sure makes me glad I didn't take A&K up on their offer to 'invest' my settlement money with them.



Some have said he was one of the few decent people who stood up for and looked after members in that whole debacle.  Others are not fans, because of his association.

I've only talked to him once recently, and he's remarkably frank (for better or worse) in an industry that is marked by exactly the opposite approach (again for better or worse).


----------



## Kagehitokiri2

bottom line, he doesnt have anything to do with AK's structure, which is one of 3 clubs that are conservative.


----------



## ClubsRDead

That's funny guys.  Not once did AK induce me and my settlement dollars with as "investment."  I originally wouldn't give any money back to them because of AK, but I am now because of Shelton and how he explained the process to me last week.  For anyone to claim he's not involved in structuring this deal, or with AKs full support is absurd.

RLG you were a fellow plaintiff but have never once posted on our club issues before?  I find that cautiously suspect - looks like your time here has been spent talking timeshares and vacation clubs.

At the end of the day I don't care what happens as long as my travel resumes and the costs equate to the benefits in a mutually beneficial way.  I'm betting that this time with AK it does.


----------



## OneMoreTime

ClubsRDead said:


> At the end of the day I don't care what happens as long as my travel resumes and the costs equate to the benefits in a mutually beneficial way.  I'm betting that this time with AK it does.



Still thinking it would have been ironic (and better) if he'd bought the club back as was an obvious plan at one point.


----------



## Kagehitokiri2

ClubsRDead said:


> Not once did AK induce me and my settlement dollars with as "investment." I originally wouldn't give any money back to them because of AK, but I am now because of Shelton and how he explained the process to me last week.  For anyone to claim he's not involved in structuring this deal, or with AKs full support is absurd.
> 
> RLG you were a fellow plaintiff but have never once posted on our club issues before?  I find that cautiously suspect - looks like your time here has been spent talking timeshares and vacation clubs.



that is not correct re *RLG*.

...

its funny, i seem to recall shelton trashing AK on DC4MS.

*ClubsRDead* has trashed AK and about everyone else here. but wait, shelton makes them like AK?

someone recently told me they think *ClubsRDead* _is_ shelton. 

when they told me this, my response was - what?? but now i guess i have to say i wouldnt be surprised, considering shelton posted things like "Mike Shelton is such a savvy businessman" on DC4MS, and then claimed it was someone impersonating him, even though he registered using his TH corporate email address.

only posting this time because of this?


RLG said:


> I think it's more remarkable that Mike Shelton, who was a top executive in Rob McGrath's ponzi scheme, is 'overseeing' A&K.  Sure makes me glad I didn't take A&K up on their offer to 'invest' my settlement money with them.



and going back >


Kagehitokiri2 said:


> ok now i remember one thing he did - talked about how great michael shelton was.
> 
> 
> 
> the DC industry can seriously not get any more ridiculous.
> 
> i thought all the positive discussion about TH bankruptcy was focused on CRO holly etlin
> for example - http://www.destinationclubnews.com/...hies_For_Restructuring_A_Destination_Club.php
> but i dont really recall at this point what was posted on DC4MS/TUG



"thought...but i dont really recall"

and yet >


ClubsRDead said:


> You might want to check your facts Kage, Holly Etlin left the employ of TH before the sale UR even closed.  In fact, it closed some year + later, that was at the direction of the board, who had terminated Xroads in July 07 for failure to perform.
> 
> It's my understanding that Etlin and Shelton are not only friendly, but have worked other projects together since.
> 
> All the banter on this board about nothing is probably why no one ever learns anything here - or responds about anything in a positive manner.



...

if shelton is a positive influence on industry (and especially AK) then thats great, obviously. 

i simply dont understand why he didnt just say something like "oops - you got me" on DC4MS.


----------



## ClubsRDead

Well I guess if my moniker makes you equate me with someone I am not (but whom I respect), then might I suggest you unveil yourself and lets get on the phone with all the parties.  I don't purport to be anyone I am not - can you say the same?

I don't know anything about the prior boards as I wasn't a participate in them, but it does appear that you have a lot of innuendos' and "I think I recall," but no facts.  Actually makes me wonder if you're one of the prior referenced terminated employee's that didn't make the cut, or receive any severance?  No one else would make such blatant comments, and likely no one with any money or common sense would expose themselves too it.  

As for the club going forward - I hope we're making the right decision and I believe with the people in place that we are.  I guess in a year or so we'll all know.


----------



## RLG

ClubsRDead said:


> I originally wouldn't give any money back to them because of AK, but I am now because of Shelton and how he explained the process to me last week.



After all the negative commentary that ClubsRDead has made in the past on the "slimeballs" and "scum bags" in the destination club industry I was quite surprised by this comment.  What a change of heart!  It's particularly strange that he had this change of heart based on discussions with Mike Shelton whose claim to fame is being a retread from the granddaddy of all failed destination club/ponzi schemes - Tanner & Haley.

I didn't see the discussions about Shelton on DC4MS, but have heard reference to them before.  Something definitely seems odd about the relationship between him and ClubsRDead that would induce such a drastic change of heart.





ClubsRDead said:


> RLG you were a fellow plaintiff but have never once posted on our club issues before?  I find that cautiously suspect - looks like your time here has been spent talking timeshares and vacation clubs.



Someone who wasn't familiar with destination club forums would also be surprised by this comment.  What's to be "cautiously suspect" about.  It's not as if I could be short selling the industry and people.  (I wish I could since it would be remarkably profitable.)

I hope ClubsRDead did a better job of due diligence on his new club than he did on me.  I've been telling people to stay away from these clubs on this forum since 2006.  I even called the HCC bankruptcy filing date two years in advance.  (More reason why I wish I could have been a short seller.)  Here are some of my prior posts in this forum:

http://www.tugbbs.com/forums/showthread.php?p=256142#post256142
http://www.tugbbs.com/forums/showthread.php?p=256182#post256182
http://www.tugbbs.com/forums/showthread.php?p=282631#post282631
http://www.tugbbs.com/forums/showthread.php?p=283004#post283004
http://www.tugbbs.com/forums/showthread.php?p=316320#post316320
http://www.tugbbs.com/forums/showthread.php?p=418241#post418241
http://www.tugbbs.com/forums/showthread.php?p=418268#post418268
http://www.tugbbs.com/forums/showthread.php?p=418272#post418272
http://www.tugbbs.com/forums/showthread.php?p=418295#post418295
http://www.tugbbs.com/forums/showthread.php?p=418370#post418370
http://www.tugbbs.com/forums/showthread.php?p=418713#post418713
http://www.tugbbs.com/forums/showthread.php?p=418722#post418722
http://www.tugbbs.com/forums/showthread.php?p=420996#post420996
http://www.tugbbs.com/forums/showthread.php?p=421096#post421096
http://www.tugbbs.com/forums/showthread.php?p=421120#post421120
http://www.tugbbs.com/forums/showthread.php?p=656928#post656928
http://www.tugbbs.com/forums/showthread.php?p=851219#post851219
http://www.tugbbs.com/forums/showthread.php?p=853477#post853477
http://www.tugbbs.com/forums/showthread.php?p=916735#post916735
http://www.tugbbs.com/forums/showthread.php?p=967519#post967519
http://www.tugbbs.com/forums/showthread.php?p=1023373#post1023373


----------



## RLG

ClubsRDead said:


> RLG you were a fellow plaintiff but have never once posted on our club issues before?  I find that cautiously suspect



My "fellow plaintiff" is annoyed that I haven't posted enough about it.  Oddly, he can't keep his story straight.  This is what he had to say about the lawsuit previously:



ClubsRDead said:


> I'm not part of the branding / licensing suit.  Been asked many times and don't believe there is a basis there.  I was told upfront if it was my last dollars to not join the club.  I made the decision on my own accord, talked to numerous members at the time and all were more than happy (now we know why).
> 
> Some argue there is merit to the litigation.  I see it merely as pouring good money after bad.  I wish AK had been more proactive in resolving it, and I think they could have made offers at inception, certainly at least when Fortress got involved, and induced members over to their new club.  The economics would have been an issue to resolve but I don't believe an insurmountable one.



I guess it's good news if he realized he was dead wrong before and changed his mind.  Good thing he shared that view with anyone who was pursuaded by his argument before.


----------



## Kagehitokiri2

back to *RLG* for a moment - they have 24 posts in this forum.
http://tugbbs.com/forums/search.php?f=48 
search by user name *RLG*
show results as posts
includes for example, on dec 3 >


RLG said:


> If you were a participant in the A&K lawsuit you should already have received your settlement papers.


...





ClubsRDead said:


> you equate me with someone I am not (but whom I respect), then might I suggest you unveil yourself and lets get on the phone with all the parties.  I don't purport to be anyone I am not - can you say the same?
> 
> I don't know anything about the prior boards as I wasn't a participate in them, but it does appear that you have a lot of innuendos' and "I think I recall," but no facts.  Actually makes me wonder if you're one of the prior referenced terminated employee's that didn't make the cut, or receive any severance?  No one else would make such blatant comments, and likely no one with any money or common sense would expose themselves too it.


like *PerryM*, many of your posts make it seem like you barely read any other posts. this makes your personal attacks weaker, because they seem just plain made up, rather than based on posts. 

good memory *RLG*. also handy that *PerryM* got editing turned off.  

dec 17 >


ClubsRDead said:


> We received our settlement check first of the week and have also had conversation with AK about their offering. The website is very vague, almost worthless but so too was the announcement they sent out.
> 
> *We'll probably do something with them* but we're waiting on more information now.


dec 19 >


ClubsRDead said:


> AK is offering some pretty decent join in prices for settlement conversions.  They told us that we have to be part of the settlement group (they are actually confirming a lot of personal data)...*We'll probably join after first of the year*


dec 19 >


ClubsRDead said:


> I'm happy with how they spoke to me, the expedience in which they actually got back to me and follow up and the candor of the offer and details presented.  Considering our settlement dollars appear to be all over the board (ie, dollars received by individual) I don't know how they'd publish something that was a "one size fits all."


first a post re being vague, similar to other posters.
2 days after that post, a dissimilar post suggesting ("i dont know how") that the other opinion is less reasonable/etc. 
without acknowledging that post from 2 days prior.

feb 28 >


ClubsRDead said:


> Not once did AK induce me and my settlement dollars with as "investment."  *I originally wouldn't give any money back to them because of AK, but I am now because of Shelton and how he explained the process to me last week.*


*dec 17/19 vs feb *

other "discussions" >
http://www.tugbbs.com/forums/showpost.php?p=883414&postcount=185
http://www.tugbbs.com/forums/showpost.php?p=879590&postcount=109


----------



## travelguy

ClubsRDead said:


> I don't know anything about the prior boards as I wasn't a participate in them.....



Are you saying it was not you that posted on DC4MS???


----------



## Kagehitokiri2

travelguy said:


> Are you saying it was not you that posted on DC4MS???


another good one.


ClubsRDead said:


> *I don't know anything* about the prior boards as I wasn't a participate in them


first post here >


ClubsRDead said:


> It's uncanny how many of the DC4MS folks moved over here.  As with the prior forum, nothing gets nor can be resolved here.


----------



## RLG

Sounds like ClubsRDead has a truthtelling problem.  I would still bet a lot more money that he's Mike Shelton than Perry.

It's unfortunate, because I find his commentary very informative.  He obviously has/had an inside line on the goings on at Tanner & Haley and Ultimate.  Sounds like it's because he's in bed (figuratively or literally) with Shelton.  

I'm not aware that Perry (who I also generally agreed with on the DC topic) has any particular inside info on T&H or UE.

Until he popped up to attack me for being less than impressed with Shelton, I hadn't noticed the inconsistencies in ClubsRDead posts.


----------



## OneMoreTime

*Post? CRD owned DC4Ms!*



travelguy said:


> Are you saying it was not you that posted on DC4MS???


  Clubs R Dead didn't need to post- he owned it. As far as I can see CRD must be none other than the snake oil salesman- JT. JT had been working with T&H on a merger for month's before the filing so he had access to all the historical data. Shelton was around T&H for what, 90 days before the filing? It does not make sense- CRD has an axe to grind- if CRD isn't JT , than it must be someone like Cibik. In the end , does it matter- it is amazing how much energy goes into trying to "out" each other when we should be working on solving real issues.


----------



## Kagehitokiri2

OneMoreTime said:


> it is amazing how much energy goes into trying to "out" each other when we should be working on solving real issues.



i only posted to defend *RLG* (irony alert - they were right with *ClubsRDead* and others about DCs, opposite me for example) and then i posted about what i had heard because it didnt seem so crazy anymore.

AK and EE members could post travel discussion, but thats pretty much it.


----------



## Kagehitokiri2

whoa whoa whoa

http://www.rocksure.com/images/10_Autumn_Newsletter.pdf


> Equity Estates Invests in the Capital Fund
> 
> Equity Estates is the only company in the United States which has a financial model similar to that of Rocksure where those whose money is used to buy the properties have ownership of all of them and benefit from the expected capital gain.
> 
> We are therefore delighted that they have decided to buy multiple Units in the Capital Fund so that their Members will be able to have access to the whole Capital Fund portfolio as it is assembled over the coming months.
> 
> We are very pleased about the investment not just because our structure and financial goals are similar but also because our standards, objectives and vision are similar, too.  We hope to be able to co-operate in other ways in the future.





Kagehitokiri2 said:


> looks like they had sold ~18 out of 170 units for euro capitals fund as of july [2010] >
> 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.
Click to expand...


wonder how much EE bought and where capital stands now...

http://www.rocksure.com/_blog/Rocksure_-_Press/post/You’ll_always_have_Paris_-_for_a_slice_of_price/


> February 04, 2011...more than 20 investors and £2.57 million [*€3 million*] [~26 out of 170 units?]



...

latest newsletter says £2mm subscriptions for platinum (~4.5 out of 37 units?)

no numbers for crystal except "reservations" (45 units)

http://www.rocksure.com/news/faqs.html


----------



## Kagehitokiri2

http://www.sherpareport.com/destination-clubs/exclusive-resorts-non-refundable-membership.html

i dont think ER could have been clearer about this coming.

but its kind of ridiculous because its not much of a discount. (27.3% > 37.5% non-deferred)

when they were doing half nonrefundable now, half (partially?) refundable in 10 years, THAT was a good deal.

sales for a "bad deal" might be even more informative though i guess.

refundable deferred "fee" >
$20K (4.2%)
$20K (2.8%)
$30K (3.2%)
$40K (3.5%)
$40K (3.0%)
$40K (2.7%)

odd in a Q sort of way

from article >


> In 2010 approximately 30% of the new members joining Exclusive Resorts took advantage of this deferred payment program.


but doesnt differentiate between >
- 50% 10 year
- 75% 1 year
- multiyear


----------



## Kagehitokiri2

http://destinationclubnews.com/News_Second_Home_Destinations_Looks_To_Bolster_Portfolio.php


> Second Home Destinations...is looking to expand their property roster by reaching out to second home owners who may be interested in leasing their residence to the club...up to $10 million.
> 
> Malibu requires 5,000 points [~$6K] per night
> 
> Most of the home owners who have placed their properties in the portfolio already have an agreement with the club where they "profit accordingly" based on member usage, but Second Home Destinations disclosed that they would allow contributing homeowners the ability to exchange their property for member usage privileges. Homeowners placing their property into the club also can set which nights are available to members, allowing them to capitalize on dates they know they will not be in residence.


doesnt sound like leases to me...

dont recall if anyone has gotten property point values from them?


----------



## Kagehitokiri2

MLS_fan said:


> lol heyyyy



does this guy have same IP as last spammer?


----------



## Kagehitokiri2

MLS_fan said:


> How am i spamming?





MLS_fan said:


> sheltons a great guy in my opinion





MLS_fan said:


> is shelton working for AK now?



sigh......


----------



## Kagehitokiri2

first "spammer" posted nothing but smileys. i reported post, and it was deleted. dont recall poster's name.



MLS_fan said:


> what's wrong kage?


nothing? i know youre having fun.

wait. MLS. i was thinking it said MLB.

seem to recall shelton's personal aol email having something to do with soccer.

so perhaps youre shelton (sigh) or someone who knows about whatever prompted the soccer reference.


----------



## Kagehitokiri2

MLS_fan said:


> lol why so much accusing of shelton on this site.. are u shelton?!?



i myself never accused anyone of being shelton.

on DC4MS, it was shelton. he used his TH corporate email account to register. other mods saw this before he changed it.

question for you - why join (March 6, 2011 - assuming not a second account) to talk about shelton? 

while i may have "started" this (arguable considering posts by CRD?) my comments on shelton were "throwaway". as i said, my bottom line is that AK is one of 3 clubs that is conservative re debt and has no leases, and if shelton is a positive influence on the industry, great, especially for AK.



MLS_fan said:


> You like that? ha i didnt like 83rd.......


http://tugbbs.com/forums/member.php?u=48540
*mlshelton* 
BBS Reg. Date: December 5, 2010
Last Activity: March 6, 2011 08:10 PM 
Viewing Forum Non-traditional Interval Ownership @ 08:10 PM
Location - Chicago


MLS_fan said:


> and this is?


ah. so middle initial is L? so MLS fan = Michael L Shelton fan


MLS_fan said:


> genius



*MLS_fan* has changed location from chicago to "kc" to "flo-rida" to "boston, ritz carlton"


MLS_fan said:


> you forgot nj too.. i won my bet did u?


----------



## TarheelTraveler

Wow, this is where the board could use some moderating.  I'm not even sure what half of the posts mean.

Can we get back to talking about DCs?

http://www.destinationclubnews.com/...Less_Expensive_Non_Refundable_Memberships.php

Does anyone know how these non-refundable ER memberships will get booked from an accounting perspective?  Does it mean that the entire membership fee is booked as revenue for the year and is there a partially offsetting obligation booked since they are to provide accomodations in the future?

I know that we saw some pretty odd acccounting with respect to UE, but then again it was odd from my perspective, maybe not from an accountant's perspective.


----------



## Kagehitokiri2

i broke it down some here - http://tugbbs.com/forums/showpost.php?p=1071099&postcount=1232

indeed, i was wondering if ER is including future deposit amounts in 2010 new/upgrade revenue considering 30% new were deferred.

from new article 


> $66 million in new membership sales and upgrades and surpassed $100 million in annual revenue


100mm - 66mm = 34mm / 3300 = $10K per member

130 upgrades  - http://destinationclubnews.com/foru...embership-upgrade-options/msg0/?boardseen#new

...

http://www.sherpareport.com/destination-clubs/factors-choose-destination-club-0311.html


----------



## TarheelTraveler

I know there is a lot of negativity about DCs, and I absolutely get that given the failure of most non-equity DCs.  However, in fairness, it does solve a lot of problems for somone who is pretty busy, but wants to take consistent, quality vacations.

I recently tried to use homeaway for a location outside of my DC but found it pretty daunting.  So hard to tell what's good and what's garbage.  I finally just rented multiple rooms, so I'd have a little better idea of what I was getting and that I can trust whomever I was paying.  But then you get all the negatives of having multiple hotel rooms.  Also, despite the recession, it seems like the prime hotels are still going for $400+ a night, which makes my $700/night dues seem reasonable given the 3 or 4 bedrooms and quality that matches or exceeds the nicest hotels.  More importantly, from a time standpoint, the DC trips take me 15 minutes to book and I spend hours upon hours booking my non-DC trips.  When I factor that it, it still makes sense at least for me.  As a result, I still think the DC concept has some legs assuming it can be executed right.

Interesting DC that I've never heard of until this article by Susan Kime:

http://www.luxist.com/2011/03/08/cuvee-ventures-and-cuvee-escapes-combining-return-on-investment/

"...Cuvée Ventures is a fund-based equity investment group, and rents the properties it owns, when the investor-families are not using them. It is also, according to Larry, 100% debt-free on its investment in real estate.

A few facts and stats: There have been two funds since 2005 that have purchased exceptional residences -- see next page. The investors pay $750,000 for a 1/2 share investment allowing 15 nights per year, and the full share investment, $1,500,000, allowing for 30 nights per year. The investors may stay at any of the residences available. Each accredited investor owns his or her share of the limited partnership that owns the real estate, so all of the investor money is tied directly to the hard asset. In Fund I, there were 17.5 shares and about 20 investors, and
in Fund II, there were 12 shares and about 14 investors...."

Not cheap, but certainly some great looking properties.


----------



## Chicagomark

*Homeaway/Vrbo Challenges......*

Whole problem with Vrbo is that you have no idea if the pictures were taken last week, or during the Reagan administration. Nor do you have any idea whether or not you're renting from someone nuts. 

One great idea that came out of discussions with other UE members post the melt down there-was creating a due diligence organization to send people out to scout Homeaway/Vrbo rentals. 

There are plenty of under employed realtors out there who could go scout rental venues to separate the good from the bad. That would materially enhance the vrbo experience by having the locations vetted for you, in advance via  standardized inspection. I would pay for that!


----------



## Kagehitokiri2

pricing is reminiscent of elan fractionals - which claim DC style use?

re cuvee >

15/30 nights and rent the rest? thats like condohotels that limit you to 21 nights per year. designed for those who want cash flow.

edit - ok wait. this doesnt make any sense. if theyre basically entirely rental, what about properties that dont allow that? 

3-4 properties
3-4 x 30 nights = 90-120 nights per property

if they do have expensive properties, especially at hotels, that theyre renting short term, especially nightly, and at hotels where its lower than hotel rate, ill definitely keep an eye on them for rentals. sure beats rental brokers for potential value.

huh, but their rental company is a broker.. so i guess they started there?


----------



## Kagehitokiri2

i presume demeure and second home destinations joined DCNews forum instead of TUG because they feel moderation there will benefit them more than users. i hope theyre wrong.

edit - i cant believe i double posted. doh.


----------



## Kagehitokiri2

http://destinationclubnews.com/News_Inspirato_Surpasses_200_Members_and_Two_Million_In_Sales.php

Inspirato Surpasses 200 Members and $2 Million In Sales


----------



## willmyclubmakeit

*inspiratio*

how many of these 200 members came from former/inactive ER members?  How many paid $9,500?   How much travel have they completed and it would be interesting to hear their comments as the locations are still pretty pricey from what I have seen.


----------



## Kagehitokiri2

i was thinking ER resignees as well. speaking of which, how many are there?


----------



## Buon Viaggio

The resignation list is pretty much the same but the current rate of resignation is the same as normal years.  I haven't heard of anyone moving over from ER but there's bound to be a few.  Some of the houses are former ER homes and some, I believe are owned by the founders themselves.


----------



## TarheelTraveler

Kagehitokiri2 said:


> http://destinationclubnews.com/News_Inspirato_Surpasses_200_Members_and_Two_Million_In_Sales.php
> 
> Inspirato Surpasses 200 Members and $2 Million In Sales



That's impressive.  I guess that can happen when you have a great website, an easier to understand model, and some very impressive experience in the business.  I'm sure Demeure or Second Home Destinations would have liked to have seen that kind of traction early on.  It would be interesting to know how many are or were connected to ER.


----------



## Kagehitokiri2

Buon Viaggio said:


> The resignation list is pretty much the same but the current rate of resignation is the same as normal years.  I haven't heard of anyone moving over from ER but there's bound to be a few.  Some of the houses are former ER homes and some, I believe are owned by the founders themselves.


we werent suggesting people would resign ER in order to join inspirato.

resignees as in total since ER started, not current resignation list.

...

so inspirato is NOT long term lease only, interesting.

edit - just heard some details from someone - sounds like inspirato is just as bad if not worse than demeure, second home, etc in terms of shall we say oddities and inconsistencies. sigh.


----------



## Buon Viaggio

Gotcha - The normal rate of resignations annually per year is less than 5% so  you could figure out a ballpark number if you knew the number of members per year.  I don't have that info but I'll bet you could track it down.  

Inspirato is offering week long stays to anyone right now as they have excess inventory already.  Off peak weeks are very attractively priced but prime weeks aren't any special value.  If they can replicate the ER in-home experience and service then the product should be a good one.  I don't see them making loads of profit though with the current business plan.


----------



## TarheelTraveler

http://www.fractionallife.com/news_us_fractional_sales_down_38_per_cent_in_20101405.asp

Some pretty sobering stats. on fractional and whole ownership vacation sales.  Hopefully, things have bottomed out.

"The latest research from Ragatz Associates in to the North American fractional real estate market has revealed a 38 per cent drop in year-on-year sales...

On a brighter note, fractional ownership fared better than whole ownership vacation homes sales, which fell by 60 per cent during the same period, and roughly on par with timeshare sales which were down by 32 per cent."


----------



## willmyclubmakeit

*inspiratio*

are they offering the weeks without joining/paying the membership feee?

are all non-prime weeks being discounted or only short term availability which I have seen.

M


----------



## Kagehitokiri2

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



> Christian Kirschner, the Founder of the bankrupt High Country Club, has been sued by the Chapter 7 trustee Jeffrey Weinman, who claims breach of fiduciary duty, fraudulent and negligent misrepresentation, and concealment of material facts by Kirschner. High Country Club's accounting firm, BKD LLP, has also been sued, with claims including aiding and abetting breach of fiduciary duty and professional malpractice and negligence.


----------



## NeilGoBlue

*Anything to Gain?*

Very interesting.  Can fraud claims like this stick after a bankruptcy?  Or do they get discharged (his personal bankruptcy)

I assume this is civil not criminal. So, I wonder what the recourse is of bankrupt individual.


----------



## willmyclubmakeit

*impact*

if nothing else it helps substantiate tax deductions which could be better than any settlement from BK court when there are so little assets and so much debt.


----------



## TarheelTraveler

I believe fraud claims are not dischargeable in bankruptcy.  Also, the accounting firm is presumably a deep pocket to go after.

I'm actually surprised that we haven't seen more of this with respect to all of these DC disasters.  As willmyclubmakeit notes, it can help substantiate a tax deduction.  Might as well help the members to the extent that you can and make things a little harder for those that had direct involvement in the disasters. 

What's even more shocking is the number of people who have started DCs, which then went bankrupt and are back in it again. 

A number of people have received emails from Lifestyle Assets - the Rich Keith startup. I suspect the only way they could have gotten my email address is from the PE/UE marketing lists.  Is the marketing list not an asset of the UE bankruptcy estate (as opposed to Rich Keith)?  Seems like that would be a saleable asset to other DCs/travel providers.  Wasn't that purchased by Demeure?


----------



## Kagehitokiri2

successful version of everlands?

club site - http://patagoniasur.com/
auction for 6 nt trip - http://www.charitybuzz.com/categories/34/catalog_items/256024


----------



## Kagehitokiri2

http://tugbbs.com/forums/showthread.php?p=1043072#post1043072
4+ PE execs > http://www.lifestyleassetgroup.com/About_Us.php 

how did they suddenly get zoning permission in charleston?

4 initial residences are presumably owned by RK etc (originally mentioned being donated) and are being leased then sold to club 

appears subsequent residences are debt free like rocksure/luxus - at least thats sustainable

but funny how 8 x $30K dues = $240K, for $2.4MM properties that have no mortgage 
thats $20K/mo and 10% of property value
EE's per property figure is $125K
thoughts anyone?


----------



## HereWeGoAgain

Frome the web site refered to above -

"In 2003, Keith co founded Private Escapes Destination Clubs, which quickly become the 3rd largest company in the luxury real estate/travel industry. Private Escapes was acquired in September of 2009."

Simply omits "and then went bankrupt within a year...and Keith was a senior executive..."

Amazing.   :annoyed:


----------



## NeilGoBlue

Kagehitokiri2 said:


> but funny how 8 x $30K dues = $240K, for $2.4MM properties that have no mortgage
> thats $20K/mo and 10% of property value
> EE's per property figure is $125K
> thoughts anyone?



Based on AK numbers, they can operate a home (all expenses and overhead but not interest expense or profit) for $183K a year (assuming 270 days a year of occupancy)


----------



## Kagehitokiri2

and RK goes back to TH apparently. no one ever leaves the DC industry. another example of ridiculousness. 



NeilGoBlue said:


> Based on AK numbers, they can operate a home (all expenses and overhead but not interest expense or profit) for *$183K* a year (assuming *270 days* a year of occupancy)



interesting.


----------



## SciFrog

$125k a year to run the properties is too low. Between taxes, HOA, utilities, housekeeping, maintenance and the local host, $180k seems more true.


----------



## Kagehitokiri2

depending on taxes, those kinds of numbers make some hotel management seem downright reasonable.

for example, not sure about taxes (leasehold) and "usage levies" but its $150K/yr for residence at phinda game reserve, including 8 staff and vehicle. 

http://www.africanhomesteads.com/
http://www.signatureresidencesworldwide.com/African-Homesteads-Phinda-Private-Game-Reserve.html
http://www.andbeyondafrica.com/luxu...nda_private_game_reserve/own_a_home_on_phinda


----------



## Kagehitokiri2

http://destinationclubnews.com/forum/general-discussion/lifestyle-assets-launch-and-member-opinions/



			
				UECastaway said:
			
		

> Yet another piece of fiction coming out of the UE camp. From RK: "I said, 'What have we learned from this industry to create a far safer model?' We took *four months* to create this product and right out of the gate the No. 1 concern was how do we mitigate the risk?"
> 
> Do a WHOIS lookup. *Lifestyle Assets created their website on October 11th which is less than a week after when he formally resigned as Chairman.* The four months that were spent creating Lifestyle was while he was still serving as Chairman, fully knowing that UE had no chance of survival. Then for them to go after the UE members despite Demeure's acquisition seems unethical at best. Like PE member Gary Hoover says in the article "That's just an absurdity to me."



http://tugbbs.com/forums/showthread.php?t=142754


----------



## TarheelTraveler

*Hideaways Club*

http://www.fractionallife.com/news_the_hideaways_club_adds_three_new_properties1433.asp

Hideaways adding 3 new villas.  Seems like they've had some very significant growth.

Interview with founder:

http://www5.zawya.com/radio/default.cfm/sidDE110328074707613428


----------



## TarheelTraveler

*Inspirato*

Inspirato announces $11M funding round:


http://www.prnewswire.com/news-releases/inspirato-announces-11-million-funding-round-120853744.html

$4M in sales to date


----------



## Kagehitokiri2

so
2mm in 2.5 months
2mm in 1.5 months


----------



## willmyclubmakeit

*what's the real story*

so if it cost $10,000 to join (before the recent price increase) can you believe that 150 people joined in the past couple of months?  I can not.  Maybe the sales is rental income (with a corresponding expense) for the original 200 people who joined booking their holiday trips--at $1500 - $2500 per night it would not take too many people to book to get to $1.5 million  (750 nights at $2,000/night).  That seems possible.   what do you think?


----------



## TarheelTraveler

willmyclubmakeit said:


> so if it cost $10,000 to join (before the recent price increase) can you believe that 150 people joined in the past couple of months?  I can not.  Maybe the sales is rental income (with a corresponding expense) for the original 200 people who joined booking their holiday trips--at $1500 - $2500 per night it would not take too many people to book to get to $1.5 million  (750 nights at $2,000/night).  That seems possible.   what do you think?



That is rather impressive sales volume.  I know it's not much of a non-refundable deposit, but that's a lot of new members if it didn't include nightly dues.


----------



## AKTHUE

*Sales*

Does anyone believe self-reported unaudited sales numbers from any destination club? Caveat emptor.


----------



## TarheelTraveler

ER and Eden Club in St. Andrews enter into an exchange relationship:

http://destinationclubnews.com/News_Exclusive_Resorts_Announces_St_Andrews_As_Newest_Destination.php

"Members will have access to the three and five bedroom private residences attached to The Eden Club, located on the grounds of historic Pittormie Castle, just a few short minutes from The Old Course in St. Andrews, the birthplace of golf. The Eden Club's dedicated golf concierges can handle arrangements at St. Andrews and more than 30 other local golf courses can be found within 45 minutes of the castle. Exclusive Resorts members will also have access to select golf tournaments and activities, including The Founder's Cup in St. Andrews."


----------



## Kagehitokiri2

http://www.linkedin.com/company/exclusive-resorts



> Came from...Castle Hill Inn and Resort, Event Sales Manager
> Came from...The Ritz-Carlton, Bachelor Gulch, Group Sales Manager


----------



## Buon Viaggio

*Inspirato*

Looks like you can now rent by the month for about half their usual price.  What does that mean?  I thought they were growing by leaps and bounds?


----------



## willmyclubmakeit

*inspirato*

looks to me that the pricing of the homes is becoming a good alternative to DC membership except around holidays (cabo is still $3,000/night at xmas/new years for example) but if you are flexible on dates there are some good values.  The mountain locations now looks to be good values in the summer (and cabo in the fall also) and not that bad in the winter in my opinion (much less than they quoted me in the past actually).  On the other hand you have to pay $15k also to join, so this has to be factored into your daily rate so you still need to commit to renting from them a decent number of nights to make this pay off (and of course you have no idea what the rental charges will be in the future).


----------



## deansimons77

You got a very informative news there. That's great and helpful to us. Thanks!






_link removed_


----------



## Buon Viaggio

Word is Inspirato is having trouble forecasting usage because members book last minute and don't have much incentive to book 1 year out.  With such a low membership fee there is also not as much pressure to "get your money's worth" and use up your days.  More traditional DC members tend to plan further out and use up most of their days.

Any word on how many members there are?


----------



## Kagehitokiri2

clubs thinning out kiawah? 

ER >
http://kiawahrealestate.com/real_es...cabia&kmid=rvsupvmd&LotUnit=0101&Property=432
http://kiawahrealestate.com/real_es...cabia&kmid=rvsupvmd&LotUnit=0508&Property=428
http://www.zillow.com/homedetails/66-Falcon-Point-Rd-Kiawah-Island-SC-29455/68355427_zpid/

Q >
http://www.zillow.com/homedetails/48-Ocean-Course-Dr-Kiawah-Island-SC-29455/10861992_zpid/

$2mm > $3mm


----------



## NeilGoBlue

I just got back from Kiawah at the AK house... Tarheel is there right now, so he might have some thoughts...

Quintess's home is for sale... According to the agent, they paid millions more than it's worth now...The rumor, which I don't know is true or not, is that they are selling all there east coast homes?

Is this true?  I heard it from a real estate agent, so take it for what it's worth.

We love Kiawah.. It's the only place we've been to, that we would consider buying a second home.


----------



## Kagehitokiri2

NeilGoBlue said:


> I just got back from Kiawah at the AK house... Tarheel is there right now


back to back? 


NeilGoBlue said:


> Quintess...rumor...selling all there east coast homes



obviously not all 6 in new york

others, not including duo >
1 kiawah (mentioned)
1 amelia island (beachfront...)
1 south beach
2 naples

has the market recovered enough to sell...? or are they having real trouble. the investor only covers interest for another couple years.


----------



## NeilGoBlue

Kagehitokiri2 said:


> back to back?
> 
> 
> obviously not all 6 in new york
> 
> others, not including duo >
> 1 kiawah (mentioned)
> 1 amelia island (beachfront...)
> 1 south beach
> 2 naples
> 
> has the market recovered enough to sell...? or are they having real trouble. the investor only covers interest for another couple years.




Coincidently, yes.. Back to back.. (we were emailing back and forth about another property and figured it out)

I have no idea.  The agent who I talked to said that the Quintess house is a real big house and very expensive to maintain.  She said it was substantially bigger than the AK house and cost a lot more.  (the AK house is pretty big  4,200 sq feet)

Anyway, just take it for rumor and gossip since I can't confirm it.


----------



## Buon Viaggio

ER has more homes listed than they plan to sell.


----------



## Kagehitokiri2

http://www.justluxe.com/luxe-insider/trends/feature-1632569.php

can Q members explain moncasa arrangement? another exchange?


----------



## Kagehitokiri2

http://www.charitybuzz.com/categories/34/catalog_items/274800

7 nights at ER real del mar
2 premium delta tickets (PVR-LAX/SLC/MSP/ATL-XXX)


----------



## Kagehitokiri2

http://issuu.com/exclusiveresorts/docs/yearinreview-2010

495 resignation list 

$360mm "bank" debt = 44% of $812mm real estate value


----------



## travelguy

Kagehitokiri2 said:


> http://issuu.com/exclusiveresorts/docs/yearinreview-2010
> 
> 495 resignation list
> 
> $360mm "bank" debt = 44% of $812mm real estate value



WOW!  And thats assuming that there is no additional  "creatively" accounted for debt.  And I wonder if the actual street value of the real estate is anywhere near the $812mm stated value???

It looks like this is as of the end of 2010?  If so, wonder how 2011 is going?


----------



## Kagehitokiri2

hmm

"As of December 31, 2008...secured debt...was approximately $350 million"
"As of December 31, 2009 our $360 million of bank debt"
Dec 31 2010 $360mm bank debt


----------



## FoolMeOnce...

*Rich Keith Still At it...*

Recent email I received:
http://www.lifestyleassetgroup.com/discover
Introducing PortfolioOne, a limited liability corporation investing in 12 luxury second homes, debt-free, located in destinations your family loves. Available to only 100 fortunate owners, the LLC will let you pack your bags full of good cheer and explore far-flung destinations with family and friends for the next 7 years. At that time, the residences in the LLC will be sold at their highest possible values and the net proceeds from the sale will be equally divided among owners.

Our closing event is scheduled for February 28, 2012, less than four months away! 
*Contemporaneously, the residences of PortfolioOne are acquired with cash.*

Until then, you can immediately enjoy special occasions in 4 of the existing spectacular homes, with a simple $10,000 fully refundable deposit, held in escrow.

You owe it to yourself to learn more about the most enlightened second home ownership model in the world. To do so, please visit here.

Sincerely, 

Richard Keith, CEO"

~ uh, no I don't!


----------



## AKTHUE

FoolMeOnce... said:


> Recent email I received:
> http://www.lifestyleassetgroup.com/discover
> Introducing PortfolioOne, a limited liability corporation investing in 12 luxury second homes, debt-free, located in destinations your family loves. Available to only 100 fortunate owners, the LLC will let you pack your bags full of good cheer and explore far-flung destinations with family and friends for the next 7 years. At that time, the residences in the LLC will be sold at their highest possible values and the net proceeds from the sale will be equally divided among owners.
> 
> Our closing event is scheduled for February 28, 2012, less than four months away!
> *Contemporaneously, the residences of PortfolioOne are acquired with cash.*
> 
> Until then, you can immediately enjoy special occasions in 4 of the existing spectacular homes, with a simple $10,000 fully refundable deposit, held in escrow.
> 
> You owe it to yourself to learn more about the most enlightened second home ownership model in the world. To do so, please visit here.
> 
> Sincerely,
> 
> Richard Keith, CEO



It's amazing, these guys keep coming back. And they will probably find new suckers to fleece.


----------



## RLG

FoolMeOnce... said:


> You owe it to yourself ..



The one benefit of being owed by yourself is that you'll probably get more than the ZERO cents on the dollar those owed by either of Rich Keith's prior destination clubs got.


----------



## thedonva

*Saved me from myself*

I'm glad I came across this as I was getting ready to invest money in LAG.  My friends (who are in real estate) said it sounded to good to be true.


----------

