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What happens when your resort files for bankruptcy?

Discussion in 'Buying, Selling & Renting Timeshares' started by chazpbg, Nov 8, 2019.

  1. chazpbg

    chazpbg TUG Member

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    I own at Rayburn Country Club in Texas. They let us know this week that they're beginning the bankruptcy process (RCI also let us know that they were "suspended" from the system -- at least for now.) Resort said they hope to reorganize as a smaller resort and come back to life, but it will be up to the courts to work this out.

    Any idea what this means? I gather resort is not planning on sending bills for 2020 maintenance fees -- at least for now. I'm kinda hoping I'm done with this resort even if they can come back to life, but could they come back and make us pay more and/or recover the 2020 maintenance fees? How long does the process typically take to sort this out?

    Or is it possible they could come back with a new owner and things might be better -- meaning our fees would be lower and/or we might get more points? I kinda doubt that, but curious what others might have to say in terms of how this could play out...
     
  2. DrQ

    DrQ TUG Member

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    It's hard to say. We went through that with Ramada Vacation Suites with was sold a couple of times and then to a group that wanted to start an independent timeshare company -- fail. Our resort was purchased by Westgate (We are the Borg ... resistance is useless ...) and we have a new master. It was an improvement.

    For Rayburn, my money would be on liquidation. They will still probably hit you up for MF, but might offer you a Deed in Lieu of Foreclosure to clear the property in hope of a sale to an outside investor.

    That is what happened to us with Inverness by the Sea in Galveston. They implemented a special assessment of $4K or an option of the Deed in Lieu of Foreclosure.
     
  3. chazpbg

    chazpbg TUG Member

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    When you say deed in lieu of foreclosure, do you mean they'll take back the property from you (at no charge) versus foreclosing on you? That's what I'm hoping for... (I'm not expecting to get any money out of my unit -- I just want it to be gone at no additional expense to me, unless there was some great value in keeping it.)

    And would we still be expected to pay MFs while this deed or lieu of deal is going on...?
     
  4. Passepartout

    Passepartout TUG Review Crew: Veteran TUG Member

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    Bottom line: All bankruptcies are different. The settlement is decided in a Federal court between the owners and a BK trustee. They decide who gets what when the assets (including receivables like your MF) are divided by the liabilities. So, just a guess here, your MF would continue as long as the property is still in the hands of the current owners (which is you) or the HOA.

    Jim
     
  5. chazpbg

    chazpbg TUG Member

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    Indeed. I'm sorta getting that sense that no two timeshare bankruptcies are the same. But question: What would propel me to pay the MFs if a timeshare is in bankruptcy? What's the worst case scenario -- that they would foreclose on me on a property that is already essentially defunct?
     
  6. bogey21

    bogey21 TUG Member

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    Nothing. In most cases it will be throwing money away. There may be a rare case where you think there will be value in the reorganized entity. This is probably not one of those cases...

    George
     
  7. rapmarks

    rapmarks TUG Review Crew: Elite TUG Member

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    Someone shared the letter they sent out.
    Hundreds have walked away and rci sends people to stay there but they don’t have the funds to keep up all the units, less than half are paying maintenance,
     

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