Beware - Consolidated Resorts Filed Bk [MERGED]

[mshatty]

Another search at 8:28 pm June 24, 2009, no bankruptcy filing for Consolidated Resorts yet.

Looks imminent.

Chapter 7 or 11? Big big difference.

___________
ETA

If this is a Chapter 7, don't be surprised if the filing is delayed 90 days or more. This is a reach back period for preferential transfers (non-insiders). If they going to try to operate in a Chapter 11, they may file sooner.

 

[dougp26364]

Another search at 8:28 pm June 24, 2009, no bankruptcy filing for Consolidated Resorts yet.

Looks imminent.

Chapter 7 or 11? Big big difference.

___________
ETA

If this is a Chapter 7, don't be surprised if the filing is delayed 90 days or more. This is a reach back period for preferential transfers (non-insiders). If they going to try to operate in a Chapter 11, they may file sooner.

From what I'm hearing, it sounds like it will be a Chapter 7 filing. I'd look for signs of a deal being brokered for another developer/management company to step in with a deal to take them over.

 

[lv_maui]

From what I'm hearing, it sounds like it will be a Chapter 7 filing. I'd look for signs of a deal being brokered for another developer/management company to step in with a deal to take them over.

I saw one article that said it was Chapter 11. This does not mean much as an 11 can be converted to a 7 filing by a motion. I am sure that it would be 11 first.

But I am curious why I have not seen any formal press releases at all. There is no doubt that the rumor is true but until a filing IS confirmed, you never know. HOWEVER, you never know if there is behind the scenes negotiations with the large creditors for a sale, etc.

 

[dougp26364]

I saw one article that said it was Chapter 11. This does not mean much as an 11 can be converted to a 7 filing by a motion. I am sure that it would be 11 first.

But I am curious why I have not seen any formal press releases at all. There is no doubt that the rumor is true but until a filing IS confirmed, you never know. HOWEVER, you never know if there is behind the scenes negotiations with the large creditors for a sale, etc.

It would seem rather odd to abruptly shut all sales activities down if all they wanted to do was reorganize. What I've read indicates they've ceased all sales activities and told everyone they don't have jobs. If this isn't shutting down and going out of business I don't know what is. Under the reorganization's I've seen, the company continues to operate under the protection from creditors through the bankruptcy filing. This doesn't appear to be happening in this case.

But, I've been wrong before.

 

[lv_maui]

Chapter 11

It would seem rather odd to abruptly shut all sales activities down if all they wanted to do was reorganize.

Who knows who is right or wrong?

First, filing bankruptcy requires the Company to go to the individual Dept of Real Estates and requires a modfiication of the Public Report. Being in Bankruptcy is a MATERIAL event and needs to be disclosed in the Public Report.

When Sunterra went thru this, some states were OK with just letting them know and some wanted to process a new public report which required the sales centers to go dark for a while. It was different in all states. In California, it took a year. IN Virginia, a couple of days. My guess would be in Florida, Nevada and Hawaii that these savvy DRE's would take some time to modify the report.

Second, if they do not have DIP financing arranged, they still do not have the cash to operate. Until they find receivable or DIP financing, they have no cash to run post petition.

BUT, why they let their sales staff go with no hope to come back supports your contention.

 

[lv_maui]

Strange to me

Strange that no actual filing of BK has taken place based on my internet searches. But they are def closed down.

 

[MULTIZ321]

Strange that no actual filing of BK has taken place based on my internet searches. But they are def closed down.

LV -

You've probably already seen the bankruptcy links at this other Tug thread


Richard

 

[lv_maui]

Update on BK

Talked to a source inside CRI about what is going on. Naturally the answers were yes or no as I did not want to get him in trouble. They have not filed, and he did not know when they were going to file. The lay offs have been extreme and it is just hard to know anything anymore. Accounting dept is basically gone. They are concerned about where the money is coming from in ongoing payroll, but everyone knows that they will get paid from someone on time when it is coming up due.

I have a theory that the lenders who have debts with CRI are in discussions with Goldman/Whitehall. G/W are done with their investment so they are waiting on the lenders to decide what to do. Are the lenders going to let their loans get sold for cents on the dollar, etc.? G/W have nothing more to lose as they have given up on their original investment. Its the lenders who need to make decisions on what they want to do for now.

ps, for all those who said that they did not get paid from CRI, lets caution what you probably are saying. You got paid your wages, but you did not get paid for vacation time accrued. That is probably true, but in a BK, vacation pay is an unsecured creditor just like the office supply company. The BK laws prohibit them from paying you the vacation pay so it is not really CRI's decision. If you did not get paid wages, it was some dispute in pay. You probably will never get money from vacation pay. At Sunterra, employees owed got some stock, like a % on the dollar or a little more, but I sold mine at the $15 share price and was pleased how it turned out.

 

[SunSand]

I have a Trading Places week at the Tahiti Village in September. How concerned should I be? Should I demand a location change, or stick it out and see what happens? I've already purchased airline tickets.

 

[lv_maui]

we are confusing things here

I have a Trading Places week at the Tahiti Village in September. How concerned should I be? Should I demand a location change, or stick it out and see what happens? I've already purchased airline tickets.

We really have to seperate the two main components of any timeshare business: One is the Sales and Marketing machine, that is what has problems. Second is the ongoing management of the resorts. That is not a problem and I would not be concerned about your week.

You should be fine as long as the HOA's have been run without too much support from CRI as the owner. My gut says that you will fine though.

 

[SunSand]

LV Maui, Thanks for the reality check. My brain tells me you're right. What I know of Chapter 11, I'm feeling better about my week. Although, I am very surprised by the lack of detailed information from Consolidated. Seems like they dropped a bomb and ran off. Not a good image for a vacation company.

 

[apopo]

Consolidated Resorts

We live on Oahu. A few years back we almost bought Consolidated Resorts. When we reviewed the documents, however, we found that they were leasehold and that the fee was tied into the heirs of William Jefferson Clinton and Ted Kennedy. On this basis, we backed out the next day. Seems rather strange that they would be filing for bankruptcy with this kind of money behind them but it may be so.

 

[dougp26364]

We live on Oahu. A few years back we almost bought Consolidated Resorts. When we reviewed the documents, however, we found that they were leasehold and that the fee was tied into the heirs of William Jefferson Clinton and Ted Kennedy. On this basis, we backed out the next day. Seems rather strange that they would be filing for bankruptcy with this kind of money behind them but it may be so.

Some investments return money, some lose money. Apparently, this one was losing money and the investors didn't want to put more capital into a sinking ship.

 

[lv_maui]

Still no filing

I still cannot find that Consolidated has actually filed in BK court. Very strange that you tell the public but do not do it within a couple of days. I can only assume that my comments about the owner looking to the lender as to what they are going to do in a BK situation is my only guess.

I guess this is like GM in that eveyrone knew they are filing BK, but they had to get certain creditors "set up in agreement" before they actually filed.

 

[macko420]

I spoke with a Consolidated Resorts rep today. here is what I was told......
There are 2 separate companies, CRI which is the developer and CRM (management) which is the operations division.

It is CRI that is filing for bankruptcy. Therefore, they have shut down sales, aren't selling upgrades or offering owner revisits, etc.
She told me that the resort is running normally. It will not effect owner reservations. As for the MF's, she did not know but she did say that they had gone up a bit this year (we know) but since Phase 3 had not been planned, it shouldn't make a difference.

I guess we will see..............I think I'll wait a week or so and call back to see if any of the answers have changed!

 

[CURIOUS1]

Consolidated Resort Files For Bankrupt

We are owners of a 2-bedroom Royal Tahitian at Tahiti Village. After receiving this alert in my email, I called the 1-800-775-8463 number and spoke to a representative and he stated that CRM (Consolidated Resort Management) remains unchanged. The owners are still able to make reservations.

CRI (Consolidated Resort Inc.) is the company that is being affected.

Supposedly statements are in the process of being mailed out to the owners.

We will remain optimistic until we hear otherwise.

We are sorry that so many people lost their jobs in this economy. Hopefully, things will get better.

 

[lv_maui]

Complete Confusion

Consolidated is in a complete state of confusion in the corporate office. No one knows what the plan is for the future, and GMAC, the lender and key player, has not decided upon any plan for their loans and how to salvage some value. Employees believe that they will get paid their rightful wages since it would be a very bad and negative PR events for Goldman Sachs. But the employees have no idea of when and if the corp office announces a complete closure.

In the meantime, the resorts continue to operate normally with Consolidated as the management company. But since Consolidated is no longer funding subsidies or maintenance fees for the intervals that it owns, the HOA's will need to take a good look at whether they should change management companies. If the developer does not pay its fees, then why should they have control. Watch for service levels and condition of the units to start to decline quickly and owners taking a more active role in watching their resort and soliciting new bids for managers.

 

[macko420]

Are there any other owners reading this thread besides myself and Curious1?

 

[dougp26364]

Consolidated is in a complete state of confusion in the corporate office. No one knows what the plan is for the future, and GMAC, the lender and key player, has not decided upon any plan for their loans and how to salvage some value. Employees believe that they will get paid their rightful wages since it would be a very bad and negative PR events for Goldman Sachs. But the employees have no idea of when and if the corp office announces a complete closure.

In the meantime, the resorts continue to operate normally with Consolidated as the management company. But since Consolidated is no longer funding subsidies or maintenance fees for the intervals that it owns, the HOA's will need to take a good look at whether they should change management companies. If the developer does not pay its fees, then why should they have control. Watch for service levels and condition of the units to start to decline quickly and owners taking a more active role in watching their resort and soliciting new bids for managers.

If I was an owner there, my biggest conern would be what's going to happen to MF's. At the very least, with the subsidies gone, MF's will go up by at least that amount. If owners have their last MF statements and if those statements show how much of their MF was being subsidised by CRI, they can expect their MF to jump by at least that amount. If 2009 subsidy payments haven't been made, there may well be a special assessment in the amount of subsidy the CRI failed to pay.

 

[lv_maui]

Are there any other owners reading this thread besides myself and Curious1?

I wonder myself. I went from thinking that this was all going to end up ok for the owners, but now, I think there is an impending disaster that will occur when the HOA's, who depend to some degree on the developer, will now have to figure out what to do.

 

[Kona Lovers]

Are there any other owners reading this thread besides myself and Curious1?

We're owners at the Kona Islander, managed by CRM, and hope there will be no adverse affects of all this.

Marty

 

[dougp26364]

We're owners at the Kona Islander, managed by CRM, and hope there will be no adverse affects of all this.

Marty

Resorts that are sold out and not having their MF's subsidised by the developer probably won't see much of a change. TV owner may be at risk since the resort is relatively new and could have a decent percentage of weeks that have not been sold. If the HOA's budget was based an a certain amount of income from the developer, then that's going to cause them problems. That money will have to come from someone's pocket.

The other issue would be promised amenities that have not been completed. Anything not completed won't be done until this matter has been settled. The developers contract with buyers almost always says that the developer reserves the right to change things with the concept of the resort. At this point, those promises could be considered broken.

FWIW I believe the TV will be all right but, if I owned there, I'd be concerned about my pocket book when MF's come due at the end of the year.

 

[lv_maui]

Without a developer all of a sudden, HOA's are going to be thrust into deep trouble. If a resort has been sold out for a couple of years, the problems are much less. A new resort is going to have many many problems because all of a sudden, the HOA has an owner with multiple units not paying their dues. Higher maintenance fees is just the start.

GMAC, the lender who lent Consolidated money based on mortgage receivables, will be pivotable as to what happens. Unhappy owners equals large mortgage receivable defaults which means GMAC has more loan losses.

For those who think this is no big deal comparing it to Sunterra, etc., you are wrong. Sunterra wanted to emerge from Bankruptcy, Consolidated does not!!

 

[dougp26364]

For those who think this is no big deal comparing it to Sunterra, etc., you are wrong. Sunterra wanted to emerge from Bankruptcy, Consolidated does not!!

Good point.

This point does have me wondering why there are reports of a chapter 11 filing rather than a chapter 7. I would think that, if they filed chapter 11, they'd expect to reorganize rather than fold.

This may be more like when Epic went under and was purchased by Sunterra rather than Sunterra first filing. But I wasn't really paying attention to the situation when Epic went under.

 

[cleo_32_2000]

Are there any other owners reading this thread besides myself and Curious1?

I have been scouring the internet daily for more information on what's going on at Tahiti Village. I really like the place and enjoy going there. I like the off strip location. However, like most newbies we overpaid then came to regret our hasty decision. Last time we we there we got them to take back our purchase. They offered us a Quit Claim deed which we signed and had notarized in their office. We were supposed to make the last payment in April but they have taken two more since. When we phone nobody could explain what was going on, just that they had no record of the Quit Claim deed. Apparently it was never filed. Our credit card they were taking payments from has expired. We have received an email saying our next payment is overdue but so far no harassing phone calls. We were allowed to used up our year which ends in Sept. We are visiting the resort on July 12-16th. I hope we can clear this up. I would have considered buying here on the secondary market but now with the bankruptcy I am not so sure.

Any helpful opinions or advice? Anybody with updates in regard to the bankruptcy please post.

Anybody who has visited since the announcement also please post.