[CONTENT REMOVED FROM ORIGINAL THREAD PLACED HERE] Legal debate thread for the ongoing Wyndham resort closure actions...

[HitchHiker71]

I'm no attorney; furthermore, Perry Mason never handled bankruptcy cases so there goes my other source of legal knowledge.

Anyway, I was curious about the point raised by many about declaring bankruptcy while still solvent. Apparently this is a common occurrence (as others have noted) and Chapter 11 offers the advantage of restructuring before a business hits rock bottom. Here's just one web site I found helpful: https://www.dailydac.com/solvent-debtor-a-chapter-11-debtor-doesnt-need-to-be-broke/

But this leads back to the question of the ultimate goal of this whole kabuki dance. They say they want to sell, but it seems like Chapter 11 is meant to "reorganize."

Again, not a lawyer/attorney/counselor/barrister/solicitor/shyster so I am looking for some bulletin board legal opinions.

Asking Grok 4 AI:

Can Chapter 11 bankruptcy include liquidation via property sale when dealing with commercial real estate?

Yes, Chapter 11 bankruptcy, which is primarily for reorganization, can also include liquidation through the sale of assets like commercial real estate. This is done via a "liquidating plan," where the debtor sells property to pay creditors under court supervision, often more efficiently than in a Chapter 7 liquidation. The debtor must get court approval for such sales outside the ordinary course of business. For single-asset real estate cases (like a commercial property generating most of the debtor's income), special rules apply, such as timelines for filing a plan or making interest payments to avoid stay relief for creditors, but sales remain possible as part of the plan. This approach helps maximize value for creditors while addressing the debtor's financial distress.

https://x.com/i/grok/share/EAqJJ3uhP9c0W9W1hUznSmUMv

 

[bnoble]

I don't know how they are going to talk people into deeding back weeks.

As I understand it, that's the point of bankruptcy; sales can be forced.

 

[dioxide45]

This approach helps maximize value for creditors while addressing the debtor's financial distress.

That seems to be counter to what at least some of the properties are disclosing to owners. They've indicated the association is in good financial health.

 

[dioxide45]

I don't know how they are going to talk people into deeding back weeks. 50+ owners for each unit X quite a few units. It's going to be a nightmare for Wyndham, especially their inept title department. This could take years to unravel, and then the HOA will no longer be solvent.

It seems there is going to be a line of approach to get people to convert to CWA. I don't know if that will happen prior to bankruptcy filing or after. If after, the court has to approve that approach. If before, it is going to take some time to have people sign deeds back and get them recorded. If the court approves a free and clear sale they likely need to adjudicate each owner for all the intervals. This can be very time consuming and would be easier if the owners were consolidated by deeding back and taking CWA.

The HOAs are certainly solvent. The BOD has the power to assess owners future fees if necessary. There may be a large number of defaults because there may not be any return on owners paying assessments and not getting any use. They can then foreclose on those deeds. This is all a long process. Once the properties close and stop taking guests, I suspect we will see discussion on the topic slow, but the process could play out for years. Depending on how they approach the sales (auction or listing with an agent) it could take a long time to find buyers. If they go through a listing agent, it could take longer unless they are willing to sell dirt cheap. Marriott Vacations has been trying to sell land at Harbour Lake for years (over a decade). They had a buyer once who backed out. Selling large plots of land like this that contain structures that may need to be demolished may be easier said than done.

 

[CO skier]

I don't know how they are going to talk people into deeding back weeks. 50+ owners for each unit X quite a few units. It's going to be a nightmare for Wyndham, especially their inept title department. This could take years to unravel, and then the HOA will no longer be solvent.

There will be no "deeding back" involved. The resorts will no longer be part of Club Wyndham, so there will be no involvement of the Wyndham Title Department, other than the CWA swaps, and it seems most remaining owners just want out, not the swap.

Why is it so difficult for people to understand it is the HOAs who are declaring the bankruptcies, not Wyndham. Any "deeding" work will be handled by the HOAs.

The bankruptcy court could order a partition sale. When the property (resort) is sold, the HOA disburses the funds to each of the tenants in common. It is not rocket science.

 

[HitchHiker71]

That seems to be counter to what at least some of the properties are disclosing to owners. They've indicated the association is in good financial health.

Right now yes, however the argument being made is that looking ahead, financial distress is a certainty due to a combination of valid reasons, not the least of which is low owner occupancy. This is literally written into the proxies everyone has been receiving - warning - major expenses lie ahead. Also, I've recently learned that we've likely been misinterpreting what low owner occupancy is actually referencing. We've been thinking it was referring to actual resort occupancy rates, which has also been low from the majority of resorts, again because it's documented in the proxy paperwork. However, what Wyndham really meant is that Wyndham now owns the majority of intervals due to owners turning these older contracts in, attrition (via owners passing away), and/or foreclosures/repossessions - so low owner occupancy literally means that owners don't want to own at these resorts any longer and aren't buying inventory from these resorts. The developer has therefore assisted the HOAs by taking on the MFs for these interval contracts, but is no longer willing to do so essentially, and therefore the HOA will come under great distress if the developer shifts this burden back to the HOAs. This is in addition to future SAs due to required infrastructure improvements, etc.

 

[paxsarah]

Bankruptcy is the best way to facilitate a sale according to K&L. They have extensive experience selling resort type properties through bankruptcy according to them.

Just commenting on this from the main thread in a post about one of the Glade HOA meetings. If someone wanted to learn more about how bankruptcy may actually work in this kind of resort sale, they could work to track down information on one or more of the resorts K&L has worked with in the past.

 

[dioxide45]

Just commenting on this from the main thread in a post about one of the Glade HOA meetings. If someone wanted to learn more about how bankruptcy may actually work in this kind of resort sale, they could work to track down information on one or more of the resorts K&L has worked with in the past.

I would also be curious if they've done it for other timeshare properties.

 

[shawnee83]

I've recently learned that we've likely been misinterpreting what low owner occupancy is actually referencing. We've been thinking it was referring to actual resort occupancy rates, which has also been low from the majority of resorts, again because it's documented in the proxy paperwork. However, what Wyndham really meant is that Wyndham now owns the majority of intervals... owners don't want to own at these resorts any longer and aren't buying inventory from these resorts.

This is a good point. I wonder if the HOA gives Wyndham/T&L a "discount" on any fees they owe on the intervals they've acquired.

 

[CO skier]

This is a good point. I wonder if the HOA gives Wyndham/T&L a "discount" on any fees they owe on the intervals they've acquired.

"Never say never," but timeshare HOAs determine the maintenance fee per interval, not per owner, based on the annual budget.

 

[dioxide45]

This is a good point. I wonder if the HOA gives Wyndham/T&L a "discount" on any fees they owe on the intervals they've acquired.

Early in a properties development, a developer may offer a guaranty. That means that the developer will cover any shortfalls while a property is built out. After buildout that guaranty goes away and each interval is responsible for the fees billed for each interval. I don't see how they could offer Wyndham any kind of discount. Any shortage of fees that Wyndham isn't paying would have to be paid for by the rest of the owners.

Unoccupied units should make for lower fees though, less housekeeping, lower utility costs, less staffing. Those lower costs should be passed on to all owners, not just Wyndham.

 

[CO skier]

This, from July 9, 2018, is interesting:

K&L Gates has bolstered its Newark office and its hospitality practice through the addition of Wyndham Worldwide Corp.’s former general counsel and three former LeClairRyan bankruptcy attorneys who all work on hospitality matters. Partner Scott McLester spent 18 years at Wyndham Wordwide before the company completed a spinoff to become two publicly traded companies in late May.

"This was a perfect opportunity to go back into private practice, " McLester said, noting the conclusion of Wyndham's separation into Wyndham Hotel Group and time-share-focused Wyndham Vacation Ownership. As general counsel, corporate secretary and chief compliance officer for Wyndham, McLester led a global team of almost 75 lawyers that handled hotel, time-share, franchise, employment, intellectual property and information technology law. He was appointed general counsel in 2006 after having previously held multiple titles at Wyndham's predecessor, Cendant Corp.

 

[shawnee83]

Unoccupied units should make for lower fees though, less housekeeping, lower utility costs, less staffing. Those lower costs should be passed on to all owners, not just Wyndham.

That's a very good point. However, I suspect those savings are very small compared to the cost of a new roof, replacing stairs, new furniture etc.

 

[schreff]

Let's face it -- consummating the sale of any of the resorts by December 31 is a fantasy. OIRC is farthest along and hasn't filed Chapter 11 yet. Changing the 12/31 deadline would not cause any delay in the sale. Rather, it would reflect reality -- that a sale by 12/31 is not in the cards so let's pick another drop dead date.

It's not like costs go to zero after the 12/31 deadline. At OIRC, the estimated cost per interval in 2026 is $762.66. For 2025 it was $1,101.25.

Keep the resort open for three (six) months and charge one-fourth (one-half) the budgeted maintenance fee. Transfer reserves to the operating account when the process is further along than it is now.

A good common sense post by chapjim is appreciated. if no better solution is found to the many Wyndham problems along with a deferral of their year end plans, I believe that serious legal problems could hurt us all. There is a possibility of not only many class action suits but also the possibility of either the home state AG/federal government AG or both could enter the picture by legitimately questioning present and past actions by Wyndham. Of course, any of these possibilities would mean that we, the owners, would get less money/benefits and would have to wait much longer for final resolution. None of this paints a pretty picture of where we are right now.

 

[comicbookman]

I believe that that if you have an association with Wyndham of any type whatsoever you should have enough courage to say so. Full disclosure is virtue and I would certainly say that I have a conflict if one existed.

"Cowards die many times before their deaths; the valiant never taste of death but once," from Shakespeare's Julius Caesar.

I am a Wyndham owner from way back in the Fairfield days. I have had my conflicts with them and I criticize them when I disagree with them. (you can see my long discussion with Hitchicker over the botched website rollout a couple of years ago) The fact that I think Wyndham is following the law, as i have previously stated, does not mean I like the way they are handling things. Casting aspersions on people is the last resort of those who have no logical arguments, or new made-up stories, left.

 

[comicbookman]

A good common sense post by chapjim is appreciated. if no better solution is found to the many Wyndham problems along with a deferral of their year end plans, I believe that serious legal problems could hurt us all. There is a possibility of not only many class action suits but also the possibility of either the home state AG/federal government AG or both could enter the picture by legitimately questioning present and past actions by Wyndham. Of course, any of these possibilities would mean that we, the owners, would get less money/benefits and would have to wait much longer for final resolution. None of this paints a pretty picture of where we are right now.

There is very little possibility of major class action suits. Wyndham has hired a very large, very well-respected law firm and it is highly unlikely that they are not following the law. Again, this does not mean what they are doing is customer friendly, but most of the laws involved here are not meant to protect customers. They are meant to protect creditors which is a very different class.

 

[Arimaas]

There is very little possibility of major class action suits. Wyndham has hired a very large, very well-respected law firm and it is highly unlikely that they are not following the law. Again, this does not mean what they are doing is customer friendly, but most of the laws involved here are not meant to protect customers. They are meant to protect creditors which is a very different class.

I think there may be a cuase of action for a class action or two here. However, I also think that this is nothing the big well respected firms have already thought about and planned for.

 

[schreff]

This is a very black and white situation. Come 12:00am, January 1, 2026, you'll either still be an owner and keep any future reservations and/or points moved forward or you won't be an owner any more and both will cease to exist in the system.

Wyndham is making what any court or judge would view as an acceptable and equitable effort to compensate the owners with the offer of an equal number of CWA points.

If someone turns down the offer and decides to no longer be an owner, why would they think Wyndham has any interest in appeasing them? What value do those owners bring to Wyndham's table if they no longer want to be Wyndham owners? That's the cold, hard truth.

Agree with the big picture but that's only part of the underlying equation. The choice of either accepting the CWA points or not is the big picture but what about the cancellation of reservations syndrome, legal actions against Wyndham, and other factors of questionable legalities. How will these be resolved and how will they affect the Chapter 11 action itself?

 

[comicbookman]

I think there may be a cuase of action for a class action or two here. However, I also think that this is nothing the big well respected firms have already thought about and planned for.

I would be interested in what causes you see. While they may be causing problems for some members, there is enough difference between each owner that I don't see a judge certifying a class of any size to make it worthwhile for a law firm to take on the case.

 

[comicbookman]

Agree with the big picture but that's only part of the underlying equation. The choice of either accepting the CWA points or not is the big picture but what about the cancellation of reservations syndrome, legal actions against Wyndham, and other factors of questionable legalities. How will these be resolved and how will they affect the Chapter 11 action itself?

Probably not at all. Wyndham is not declaring chapter 11, individual HOA's are doing it. None of the things you mentioned, including the CWA point offer, is from the HOA's.

 

[schreff]

Probably not at all. Wyndham is not declaring chapter 11, individual HOA's are doing it. None of the things you mentioned, including the CWA point offer, is from the HOA's.

So Wyndham doesn't either directly or indirectly have any influence on the HOAs/BODs except for their controlling votes? So there are no Wyndham employees, past or present, on the HOAs/BODs thus no conflicts existing whatsoever? And no of these Wyndham actions do not affect the bankruptcy at all even though the bankruptcy caused the above factors?

 

[comicbookman]

So Wyndham doesn't either directly or indirectly have any influence on the HOAs/BODs except for their controlling votes? So there are no Wyndham employees, past or present, on the HOAs/BODs thus no conflicts existing whatsoever? And no of these Wyndham actions do not affect the bankruptcy at all even though the bankruptcy caused the above factors?

You lost me with "the Bankruptcies caused the above factors" since the bankruptcies are happing now, not in the past. None of the things you point out have any bearing on the HOA bankruptcies validity. Wyndham is an owner, just like I am. They get to vote in the same way I do. The fact that they own enough to have a controlling share is not illegal. That they vote in their own interest is not illegal but is actually expected. Wyndham employees can be voted onto the boards, just like anyone else. Again, this is in no way illegal. There is no conflict, because just like I would be free to cast my votes based on my own interest, Wyndham is free to do the same. Conflict of interest is not really a thing here. The only thing that would be an issue is if Wyndham was treated different from other owners. or was cut special deals that don't apply to everyone. We don't have any reports of this happening. Ther has been no complaints that having Wyndham manage the resorts has resulted in enrichment of Wyndham at the expense of other owners. Indeed, Wyndham has in fact been credited with saving and extending some of the resorts. So as long as all owners are treated the same, including Wyndham, how much influence Wyndham has because of their majority ownership is irrelevant.

 

[Arimaas]

I would be interested in what causes you see. While they may be causing problems for some members, there is enough difference between each owner that I don't see a judge certifying a class of any size to make it worthwhile for a law firm to take on the case.

Although most class actions have 1000s of plaintiffs (think the latest class action I got $20 from - Facebook), the class really doesn't have to be that big. 20 plaintiffs with similar claims is more than enough. Tbe question is is it profitable for a law firm to take it, as you point out.

Back of the napkin causes of action related to breach of contract: (there may be contractual language that allows for what Wyndham is doing, but we looked it up in one of the posts here, and I really don't think there is. That being said, since I am not billing hourly, I am not going to dive deeper than the back of the napkin).

• Knowingly taking reservations at the impacted resorts without giving people warning that this may occur (there may be issues with giving people notice due to the bankruptcy. I believe that's a question of law/fact for a courtroom to decide)
• Knowingly taking reservations with people's 2026 points when there is a possibility they won't honor those reservations because the points are going poof (there's value to those reservations plus non refundable costs people may have spent - airfare, other lodging, etc.)
• Knowingly allowing people to roll points over into 2026 and/or 2027 knowing those points may go poof (there's value to the points and cost to roll them)

This effort is too coordinated to show that Wyndham didn't have knowledge that it was going to happen, probably a year plus in advance. Also, what are the contingency plans for points (no pun) two and three above? Just going poof is not the answer - hence the class action. For point one, I get, what other choice do they have (other than the pop up notification which may have problems if its own).

 

[schreff]

You lost me with "the Bankruptcies caused the above factors" since the bankruptcies are happing now, not in the past. None of the things you point out have any bearing on the HOA bankruptcies validity. Wyndham is an owner, just like I am. They get to vote in the same way I do. The fact that they own enough to have a controlling share is not illegal. That they vote in their own interest is not illegal but is actually expected. Wyndham employees can be voted onto the boards, just like anyone else. Again, this is in no way illegal. There is no conflict, because just like I would be free to cast my votes based on my own interest, Wyndham is free to do the same. Conflict of interest is not really a thing here. The only thing that would be an issue is if Wyndham was treated different from other owners. or was cut special deals that don't apply to everyone. We don't have any reports of this happening. Ther has been no complaints that having Wyndham manage the resorts has resulted in enrichment of Wyndham at the expense of other owners. Indeed, Wyndham has in fact been credited with saving and extending some of the resorts. So as long as all owners are treated the same, including Wyndham, how much influence Wyndham has because of their majority ownership is irrelevant.

Please note that all my words for which you state " You lost me" are questions (?) only. Folks were to answer them with their thoughts. Hope this helps you addresss these questions. So Wyndham doesn't either directly or indirectly have any influence on the HOAs/BODs except for their controlling votes? So there are no Wyndham employees, past or present, on the HOAs/BODs thus no conflicts existing whatsoever?

comicbookman "There has been no complaints that having Wyndham manage the resorts has resulted in enrichment of Wyndham at the expense of other owners. Indeed, Wyndham has in fact been credited with saving and extending some of the resorts."

Your above comment about Wyndham Management having no complaints is simply not true. What about the Georgia fiasco which made us lose our Founder's status? Also, I recall that there were quite a few problems with Fairfield Harbor and Kauai Beach Villas. I am sure there were more for which I was not directly affected by.

comicbookman "So as long as all owners are treated the same, including Wyndham, how much influence Wyndham has because of their majority ownership is irrelevant."
It certainly is relevant if it intentionally causes the problems cited by owners in this thread along withthe thousands of other Wyndham owners who don't read TUG and know little or nothing now.

 

[Rolltydr]

I believe that that if you have an association with Wyndham of any type whatsoever you should have enough courage to say so. Full disclosure is virtue and I would certainly say that I have a conflict if one existed.

"Cowards die many times before their deaths; the valiant never taste of death but once," from Shakespeare's Julius Caesar.

I put the florida guy on my ignore list a couple weeks ago after he continually made outrageous charges and when called out would admit he made them up. I got tired of wasting my time. But, when seeing your comment above, I felt it necessary to make it clear that I have no conflict of interest. I am a Wyndham owner just like most on this forum. I bought my Fairfield Glade contract in 2021 and I’m following the developments because I own that contract and so have an interest in the disposition of it. I am retired from a 38 year career in IT and communications with a national insurance company. Oh, and I do not make statements on this, or any other forum, that are knowingly unfounded and/or untrue, unlike some others.