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.
