In trying to understand the "big picture" regarding Wyndham's actions, I engaged in a back and forth with Microsoft's version of AI (Copilot) this morning. Specifically, I asked about Bentley Brook and how Wyndham could be holding 55% of the resort's intervals. Here's the Q&A:
QUESTION: Back to Wyndham timeshares and specifically the Bentley Brook Resort in Massachusetts, Wyndham is stated to own about 55% of all intervals. How is that possible given that Wyndham is a management company and the resort is owned by its members acting through an HOA? Can it be assumed that, over the years, owners abandoned their interest, and Wyndham assumed those interests? How would that work?
ANSWER: Yes, Wyndham likely acquired many intervals over time—primarily through foreclosure, reacquisition, or default—allowing it to hold a majority stake despite being the management company.
Here’s how this works in practice, especially in legacy resorts like Bentley Brook:
How Wyndham Can Own 55% of Intervals
Even though the resort is governed by an HOA and managed by Wyndham,
ownership of intervals (i.e., deeded weeks or points) is separate from management. Wyndham Vacation Resorts (WVR), a subsidiary of Wyndham, can and does own intervals directly.
Here’s how they accumulate them:
1. Foreclosure and Default Recovery
- When owners stop paying maintenance fees or default on loans, the HOA may foreclose on the interval.
- Wyndham, often acting as the manager and sometimes as the largest creditor, may acquire these intervals through foreclosure auctions or by settling debts.
- Over time, this leads to Wyndham holding a growing share of intervals.
2. Developer Inventory and Unsold Weeks
- In many resorts, Wyndham was the original developer or acquired the developer’s inventory.
- Unsold intervals from the initial build-out remain in Wyndham’s hands unless sold to consumers.
- If sales slow or stop, Wyndham retains those weeks indefinitely.
3. Buybacks and Rescissions
- Wyndham may offer owners exit programs or buybacks, especially in distressed resorts.
- Owners who rescind purchases or use Wyndham’s exit programs (like Ovation) return their intervals to Wyndham.
4. Bulk Acquisitions
- Wyndham may purchase blocks of intervals from banks, estates, or other entities that have accumulated them through foreclosure or abandonment.
Legal and Governance Implications
- HOA Voting Power: Ownership of intervals typically confers voting rights. If Wyndham owns 55%, it likely controls 55% of the vote in HOA matters.
- Management vs. Ownership: Wyndham can be both manager and majority owner, giving it significant influence over decisions like bankruptcy, closure, or sale.
- Bankruptcy Leverage: In the Bentley Brook case, Wyndham’s majority ownership allows it to drive the resort’s closure and asset sale strategy, even if some owners dissent.
Can We Assume These Were Abandoned?
Yes, but with nuance:
- Many intervals were likely abandoned or defaulted on, especially in aging resorts with high maintenance fees and low resale value.
- Wyndham’s acquisition is often reactive—taking back intervals to stabilize the resort or prepare for redevelopment.
Would you like a breakdown of how this affects residual payouts or the timeline for Bentley Brook’s closure? I can also model how Wyndham’s ownership percentage influences HOA votes across different scenarios.
