# Portfolio Buys 28 Sunset Harbor Units



## Kal (Jun 9, 2022)

Portfolio Buys 28 Sunset Harbor Unit Weeks -Here's an example of how Portfolio works.  They grab units by ROFR, Foreclosure, Bankruptcy, etc. then sell those units to themselves.  See the Documents.  Also note that the _Notary is notarizing herself as a witness_!  Buy a resale timeshare and you have to have 2 witnesses AND the Notary.


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## dioxide45 (Jun 9, 2022)

It seems there is nothing wrong with the situation of a notary also acting as a witness on the same deed in Florida;


			https://www.avvo.com/legal-answers/in-florida-if-a-notary-acts-as-a-witness-where-two-2353695.html
		


This is also how all of the other timeshare points based trusts work. They get weeks back, they convey them to the trust. Nothing sinister here.


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## SteveinHNL (Jun 9, 2022)

Kal said:


> Portfolio Buys 28 Sunset Harbor Unit Weeks -Here's an example of how Portfolio works.  They grab units by ROFR, Foreclosure, Bankruptcy, etc. then sell those units to themselves.  See the Documents.  Also note that the _Notary is notarizing herself as a witness_!  Buy a resale timeshare and you have to have 2 witnesses AND the Notary.


I think the notary is acting as a witness but only notarizing the signature of the developer.


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## SteveinHNL (Jun 9, 2022)

Does this transfer of properties into the portfolio affect the voting on the ongoing vote to sever HSH's relationship with HRC?


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## dioxide45 (Jun 9, 2022)

SteveinHNL said:


> Does this transfer of properties into the portfolio affect the voting on the ongoing vote to sever HSH's relationship with HRC?


Not sure if there was a cutoff date for voting but it also looks like it was recorded back in March.


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## Kal (Jun 9, 2022)

SteveinHNL said:


> Does this transfer of properties into the portfolio affect the voting on the ongoing vote to sever HSH's relationship with HRC?


Yes, 28 NO votes from Portfolio.  There's no way they want to cut off access to HSH.


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## SteveinHNL (Jun 9, 2022)

Kal do you know how many units/votes HRH controls?


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## Kal (Jun 9, 2022)

I believe it is 128 + 28.  That's out of 2130 total.


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## ScoopKona (Jun 9, 2022)

I hope that between their shills trying to influence the vote and buying these weeks, they aren't able put their thumb on the scale with enough force to change the vote.


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## dioxide45 (Jun 9, 2022)

Do we know what the vote threshold needed to pass is? Is it a simple majority or a supermajority once quorum is met?


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## bizaro86 (Jun 9, 2022)

ScoopLV said:


> I hope that between their shills trying to influence the vote and buying these weeks, they aren't able put their thumb on the scale with enough force to change the vote.



If they win this year they will probably keep it forever using rofr into the trust. Makes the comments about "vote no but negotiate to lower their cut" unlikely. If Hyatt keeps it this year and gets another few dozen into  the trust every year what incentive would they have to negotiate?


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## ScoopKona (Jun 9, 2022)

bizaro86 said:


> If they win this year they will probably keep it forever using rofr into the trust. Makes the comments about "vote no but negotiate to lower their cut" unlikely. If Hyatt keeps it this year and gets another few dozen into  the trust every year what incentive would they have to negotiate?



Zero incentive. That's why they're fighting THIS vote so hard. This is the one and only opportunity SH has.


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## AJCts411 (Jun 10, 2022)

I would encourage our BOD to investigate a legal challenge of exercising these ROFR's.  That would take knowledge of the terms and conditions the developer was granted the rights.  I don't see this as protecting value at Sunset.  Florida seems more likely to lean toward protecting consumer rights when they are abused than other states.


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## dioxide45 (Jun 10, 2022)

AJCts411 said:


> I would encourage our BOD to investigate a legal challenge of exercising these ROFR's.  That would take knowledge of the terms and conditions the developer was granted the rights.  I don't see this as protecting value at Sunset.  Florida seems more likely to lean toward protecting consumer rights when they are abused than other states.


Here is what the condominum CCRs have to say about ROFR;


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## SteveinHNL (Jun 10, 2022)

dioxide45 said:


> Here is what the condominum CCRs have to say about ROFR;
> View attachment 57616


The condominimum Declaration and CCRs are basically the “Constitution” for the condominium and the creation of the condo interests better known as TS deeds.  Basically what this means is that the Developer would have a right to come in after the fact and void a TS deed/sale if the ROFR was not first offered to the Developer.  I wouldn’t want to be in a situation where I was conveying or receiving defective title by failing to follow the ROFR process.


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## SteveinHNL (Jun 10, 2022)

The most interesting piece in that snippet from the CCRs is that “membership in the Hyatt Vacation Club, in accordance with the Hyatt Vacation Club Resort Agreement and the Rules and Regulations . . . shall be a requirement of any successor in title to an Owner, the same being a covenant running with the land and the membership being an appurtenance to each Condominium Parcel.”   This sounds like it means that HHS owners will not be able to get out from under the HRC membership fee even if they terminate their relationship with HRC.


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## AJCts411 (Jun 10, 2022)

dioxide45 said:


> Here is what the condominum CCRs have to say about ROFR;
> View attachment 57616


Thanks for that.  The last paragraph "in accordance with the Hyatt Vacation club resort agreement"...does this indicate the ROFR ends when the club is voted out?  I know this is a complex question as other sections in this agreements could condition/regulate this one.   I wonder did this agreement address what happens in event of a "divorce from Hyatt" passes?  Kind of a like partnership agreement where it is prudent, good business to know how to get out/terminate by either party.


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## SteveinHNL (Jun 10, 2022)

AJCts411 said:


> Thanks for that.  The last paragraph "in accordance with the Hyatt Vacation club resort agreement"...does this indicate the ROFR ends when the club is voted out?  I know this is a complex question as other sections in this agreements could condition/regulate this one.   I wonder did this agreement address what happens in event of a "divorce from Hyatt" passes?  Kind of a like partnership agreement where it is prudent, good business to know how to get out/terminate by either party.



That’s not how I read it.  I read it more like “membership in the Hyatt Vacation Club [as described by] the Hyatt Vacation Club Resort Agreement and the Rules and Regulations” is part of the DNA you receive when you take title, since it is expressly “a covenant running with the land” and an appurtenant interest to the TS deed itself.  

I have not been around long enough to know what happened with Hyatt and Aspen.  Are they in litigation now?


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## Kal (Jun 10, 2022)

My reading is the relationship to the "...HVC Resort Agreement...".  If Hyatt/MVC is tossed out, the Resort Agreement goes with them.  However, the relationship to the "Developer" would seem to stand.  So that would say the original Developer holds the ROFR. In keeping with the concept of protecting land values, ROFR would protect owners from housing deadbeats.  But as it is playing out here, ROFR is being used to control the voting outcome of all owners.  Stack the deck to control the BOD and you have all the freedom to raise the maintenance fees sufficient to chase away owners who are not friends of the developer.

This is a new chapter from the old days of timesharing.  In the old days you pour money down a black hole, pay increasing maintenance fees and have no resale value of your ownership.  Then it transformed from "weeks" to "points" where you don't really own anything.  Now it's how to force "weeks owners" to sell out.


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## dioxide45 (Jun 10, 2022)

The truth is, ROFR isn't there to protect land values. It is ultimately there to help the developer. It may inadvertently protect land value, but that isn't the purpose. When it comes to timeshare, it is there for them to pickup cheap inventory to resell for high prices.


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## vacationtime1 (Jun 10, 2022)

Who is the "Developer" in the CC&R's?  Note that it does not include the Developer's successors in interest.

Also, does the Developer still own "interests to sell in the Condominium"?  That's the Developer, not the HOA, the Resort Manager, or the HPP trust.

Just asking; I don't have a dog in this fight, but I know how I would vote if I were an owner/user.


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## DAman (Jun 10, 2022)

“For so long as the developer has interests to sell….”

This is very interesting language.

Once the developer sells all the initial units is there no more ROFR?


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## Kal (Jun 10, 2022)

If the developer takes a resale unit on ROFR or outright purchase, they would then have "interests to sell".


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## bizaro86 (Jun 10, 2022)

Kal said:


> If the developer takes a resale unit on ROFR or outright purchase, they would then have "interests to sell".



Right. As long as the entity that is the developer has a unit to sell they are good. I do wonder if they have ever deeded all of their units to HPP at the same time though. HPP is not the developer and HPP interests are not an interest in SH. That would be a bad mistake to lose rofr on a technicality but they're a big company and I doubt the HPP inventory people are necessarily versed in the CCRs at each resort...


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## Kal (Jun 10, 2022)

As a side note, this whole drama causes me to review my Hyatt Ka'anapali ownership to hunt for parallel issues.  I reviewed the deed and the "Hyatt Vacation Club - HKB Vacation Ownership Plan" (which is a 1" thick book, in fine print).  Here's the ROFR language in the deed.  It looks almost the same as for HSH.


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## SteveinHNL (Jun 10, 2022)

I can’t find a thread on the Aspen termination of HRC.  Does anyone know of one?


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## ivywag (Jun 10, 2022)

dioxide45 said:


> Here is what the condominum CCRs have to say about ROFR;
> View attachment 57616


It seems to me that ROFR is only applicable if the developer “has any interests to sell in the Condominium.”  Since that’s no longer the case at Sunset Harbor, how can they execute ROFR? Perhaps the selling of “points” backed by the units that they own qualifies.  This is a good legal question.  We recently purchased a Sunset Harbor unit and went through the ROFR process.


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## SteveinHNL (Jun 10, 2022)

So an mportant question is how many are required for a quorum.  HRC gains a significant advantage the fewer owners that attend or are represented by vote.   Both in establishing a quorum and in obtaining a sufficient vote to pass the BOD's recommendation.


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## SteveinHNL (Jun 10, 2022)

ivywag said:


> It seems to me that ROFR is only applicable if the developer “has any interests to sell in the Condominium.”  Since that’s no longer the case at Sunset Harbor, how can they execute ROFR? Perhaps the selling of “points” backed by the units that they own qualifies.  This is a good legal question.  We recently purchased a Sunset Harbor unit and went through the ROFR process.


As I think Kal noted, if the Developer owns any units that were purchased on ROFR or otherwise, that would constitute an interest to sell in the Condominium.


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## ivywag (Jun 10, 2022)

Kal said:


> My reading is the relationship to the "...HVC Resort Agreement...".  If Hyatt/MVC is tossed out, the Resort Agreement goes with them.  However, the relationship to the "Developer" would seem to stand.  So that would say the original Developer holds the ROFR. In keeping with the concept of protecting land values, ROFR would protect owners from housing deadbeats.  But as it is playing out here, ROFR is being used to control the voting outcome of all owners.  Stack the deck to control the BOD and you have all the freedom to raise the maintenance fees sufficient to chase away owners who are not friends of the developer.
> 
> This is a new chapter from the old days of timesharing.  In the old days you pour money down a black hole, pay increasing maintenance fees and have no resale value of your ownership.  Then it transformed from "weeks" to "points" where you don't really own anything.  Now it's how to force "weeks owners" to sell out.


Was Hyatt the original Developer at Sunset or was it another company as it is at many of the other resorts?


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## SteveinHNL (Jun 10, 2022)

ivywag said:


> Was Hyatt the original Developer at Sunset or was it another company as it is at many of the other resorts?


The actual developer is not relevant.   You would have to look at the CCRs and see what entity is defined in the reference to "Developer," and note that this designation can probably be assigned to successor entities.


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## dioxide45 (Jun 10, 2022)

Definition of developer;


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## dioxide45 (Jun 10, 2022)

SteveinHNL said:


> So an mportant question is how many are required for a quorum.  HRC gains a significant advantage the fewer owners that attend or are represented by vote.   Both in establishing a quorum and in obtaining a sufficient vote to pass the BOD's recommendation.


How are they even administering the vote? I don't think the initial post in the other thread with the email included that information. Usually for annual board meetings, the management company has set up some system to vote your proxy online. I don't think the management company would setup such a vote in this situation. Did the original email to owners from the board include instructions on how to actually vote?


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## SteveinHNL (Jun 10, 2022)

dioxide45 said:


> How are they even administering the vote? I don't think the initial post in the other thread with the email included that information. Usually for annual board meetings, the management company has set up some system to vote your proxy online. I don't think the management company would setup such a vote in this situation. Did the original email to owners from the board include instructions on how to actually vote?


In my experience, there is usually a live meeting and the votes are cast in-person including by those holding proxies that have been gathered in advance of the meeting.  If I were HRC, I would be attempting to gather proxies and providing an incentive in return for proxy.


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## dioxide45 (Jun 10, 2022)

SteveinHNL said:


> In my experience, there is usually a live meeting and the votes are cast in-person including by those holding proxies that have been gathered in advance of the meeting.  If I were HRC, I would be attempting to gather proxies and providing an incentive in return for proxy.


That's just it, how are they instructing people that can't attend to vote their proxy. For annual board meetings, they have a website to vote board members. But that is all run through the management company and whatever vendor they use for online proxy voting.


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## SteveinHNL (Jun 10, 2022)

dioxide45 said:


> That's just it, how are they instructing people that can't attend to vote their proxy. For annual board meetings, they have a website to vote board members. But that is all run through the management company and whatever vendor they use for online proxy voting.


We would have to be privy to all the BOD communications to the HSH AOAO members.  I’m guessing they are sending emails and letters asking for proxy assignments.  As for how, when and where the vote will actually occur, perhaps someone could post that because that information must be known to the AOAO members by now.


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## DAman (Jun 10, 2022)

Once the development is sold out and the developer no longer holds any units is the ROFR over forever?

A contract is normally interpreted against the party who drafted it.

Of course a lot of these issues would be expensive to litigate.


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## SteveinHNL (Jun 10, 2022)

DAman said:


> Once the development is sold out and the developer no longer holds any units is the ROFR over forever?
> 
> A contract is normally interpreted against the party who drafted it.
> 
> Of course a lot of these issues would be expensive to litigate.



The rule of interpretation against the drafter only applies if a Judge believes the language is vague, and even then the interpretation would have to be a reasonable interpretation of what someone might reasonably understand the vague language to mean.  

I‘m really interested in learning about how the Aspen disassociation from HRC went down because it obviously would be a good predictor of what the legal position of HRC would be in the event of an adverse vote.  I would be surprised if HRC simply accepted the vote without filing some sort of a lawsuit that would be very expensive for the Board and which owners would have to underwrite.


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## AJCts411 (Jun 10, 2022)

dioxide45 said:


> How are they even administering the vote? I don't think the initial post in the other thread with the email included that information. Usually for annual board meetings, the management company has set up some system to vote your proxy online. I don't think the management company would setup such a vote in this situation. Did the original email to owners from the board include instructions on how to actually vote?


All owners (with some exceptions like will be present)) have been emailed link to vote. Each vote is weighed by the number of weeks owned.


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## ivywag (Jun 10, 2022)

SteveinHNL said:


> The rule of interpretation against the drafter only applies if a Judge believes the language is vague, and even then the interpretation would have to be a reasonable interpretation of what someone might reasonably understand the vague language to mean.
> 
> I‘m really interested in learning about how the Aspen disassociation from HRC went down because it obviously would be a good predictor of what the legal position of HRC would be in the event of an adverse vote.  I would be surprised if HRC simply accepted the vote without filing some sort of a lawsuit that would be very expensive for the Board and which owners would have to underwrite.


Please keep in mind that the Sunset Harbor contract with Hyatt/Marriott is about to expire and the owners at any resort can vote to fire the management company or simply just not renew. There are pros and cons to doing so and each owner at Sunset Harbor has to decide what is best for him/her. Also, the HPP has really been a breach of all of the promises that were made when the HRC was originally sold (new resorts and a club with a points component.). Then, they came along with the HPP and want us to again purchase something that we already purchased years ago.  Then, they give priority to HPP.  Is it any wonder that owners are disillusioned? All the while, trying to convince us that Welk Resorts are offering HRC members new equivalent options and that they are doing us a favor.  There are a couple of very nice Welks, but the others don’t measure up at this point. On another topic, did anyone else receive the new rental site for all of the former Welk Resorts The new entity doesn’t mention Welk or Hyatt anyplace on the page.  I’ll try to figure out how to post it.


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## dioxide45 (Jun 10, 2022)

ivywag said:


> Please keep in mind that the Sunset Harbor contract with Hyatt/Marriott is about to expire and the owners at any resort can vote to fire the management company or simply just not renew.


I don't think they can just not renew. If that is the case, why have the vote at all? I didn't read through the management agreement that is part of the CCR that I pulled down from Monroe county recorder, but I would expect that the contract is in perpetuity until terminated or is on some type of auto renewal unless terminated. But if it could simply be allowed to expire, they would probably just let it do so. I suspect if no action is taken by the board, the owners or Hyatt/MVW, then it renews again for some specified term per the agreement.


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## ivywag (Jun 10, 2022)

dioxide45 said:


> I don't think they can just not renew. If that is the case, why have the vote at all? I didn't read through the management agreement that is part of the CCR that I pulled down from Monroe county recorder, but I would expect that the contract is in perpetuity until terminated or is on some type of auto renewal unless terminated. But if it could simply be allowed to expire, they would probably just let it do so. I suspect if no action is taken by the board, the owners or Hyatt/MVW, then it renews again for some specified term per the agreement.


You are probably correct that the BOD has to initiate the process and follow the proper procedures.


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## alameda94501 (Jun 14, 2022)

It seems like there's no glaring loopholes in Hyatt's ROFR.  According to what Kal posted:






The Developer (Sunset Harbor Development Partnership) is still very much alive and well, and likely signed an agreement with HPC Developer that:

1.  Initially allowed the Developer to sell all unwanted inventory (probably to their big relief) to HPC Developer to boost their Portfolio.

2.  Keeps a plurality of unit-weeks under the Developer's control so that the Agreement that @dioxide45 excerpted from 1994 remains in place, i.e.

"_In the event an Owner desires to sell, transfer, assign or hypothecate his or her Unit or Unit Week and *for so long as the Developer has interests to sell in the Condominium*, the Developer shall have the right of first refusal to purchase the Unit or Unit Week under the same terms and conditions as are offered to or by a bona fide third party, including financing, *for so long as the Developer has any interests to sell in the Condominium.*"   _(my emphasis)

So make sure Developer still owns 2 unit-weeks, and they retain ROFR forever over the Sunset Harbor.  And they are incentivized for doing so because HPC Developer is preserving their outlay - $207.776 in this tranche - for the ROFR'd weeks, on average $7,500 per unit-week.

3.  Furthermore, I don't see *any *termination of this Right based on who the management company is, or whether the Condominium is part of the HRC Exchange. 

---

This does not seem like a 'slam dunk' legal battle that the Sunset Harbot Association should take on against Marriott.  We have already seen with Aspen that Marriott will vigorously defend Portfolio and it's likely a huge legal bill to pay (did I hear $7,500 per Aspen member?)

I haven't looked at the Aspen ROFR but would assume it works the same way and that they will slowly leak their inventory to Portfolio over time.

Finally, even though the Portfolio Salespeople don't gloat about it, the only way that legacy HRC owners can gain access to Aspen is through Portfolio - another feather for their cap, which will only improve over time.  So despite the bad PR,  a Sunset Harbor exit is another way for them to boost the power of Portfolio.

---

Not a fan of spending money on Portfolio, not a member of Portfolio, but it's actions like Sunset Harbor leaving (if successful) that have our family thinking harder about joining Portfolio at the right price.


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## alameda94501 (Jun 14, 2022)

Also to note: Sunset Harbor has a non-dues paying member so they foreclose.  The Developer picks it up in the Trustee's sale, presumably through ROFR and adds it for the next tranche to enter Portfolio.  

The Association will still have to build Portfolio through their foreclosures on non-paying members.


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## alameda94501 (Jun 19, 2022)

I was looking through Pitkin County's recorded information to see how ROFR is affected in the post-Aspen breakup. 

I found in their Condominium Declaration that their ROFR is structured quite differently than Sunset Harbor:





It looks like the earliest of (a) the date which is ten (10) years after the date of recording of the Declaration was 12/19/2015, so effectively no more units will go to the developer / Hyatt / Portfolio.

So I'm glad Hyatt Portfolio purchased their Aspen unit-weeks for $10,003,854 when they did (see below), so we can all still gain access to it ... Portfolio members getting first dibs.






PS:  Purchasing the unit weeks from the developer for $10mm ... or getting dinged for $7.5mm for the lawsuit (plus are Hyatt going after the Association for their legal fees too?)... Aspen could have just bought their own unit weeks out!


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## dbmarch (Jun 22, 2022)

They claim they have approx 150 weeks now in portfolio program.   And growing...


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