New Thread: KBV Vote for Chapter 11 Bankruptcy

[kbv007]

I started a new thread for this topic to keep the posts together. DeniseM

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We just received a ballot from the KBV IOA to authorize the AOAO to 1) file Chapter 11 bankruptcy and 2) acquire a unit prior to filing, in conjunction with a special meeting of the AOAO on September 19. This seems like a good thing, but can anyone explain in plain English what a vote for these proposals means? That is, if all interval owners were to vote in favor, does that mean they are done with KBV and free of future assessments and maintenance fees? Also, does Wyndham have enough ownership to block this, if they wanted to, even if 100% of the other owners vote yes?

I'm trying to understand if a yes outcome on this vote represents a final resolution to this saga or just another step in an ongoing unpleasant process. After all, we've already voted twice not to remediate the place and yet neither had any impact as those votes were called off.

Thanks to anyone who can offer insight!

 

[sponger76]

We just received a ballot from the KBV IOA to authorize the AOAO to 1) file Chapter 11 bankruptcy and 2) acquire a unit prior to filing, in conjunction with a special meeting of the AOAO on September 19. This seems like a good thing, but can anyone explain in plain English what a vote for these proposals means? That is, if all interval owners were to vote in favor, does that mean they are done with KBV and free of future assessments and maintenance fees? Also, does Wyndham have enough ownership to block this, if they wanted to, even if 100% of the other owners vote yes?

I'm trying to understand if a yes outcome on this vote represents a final resolution to this saga or just another step in an ongoing unpleasant process. After all, we've already voted twice not to remediate the place and yet neither had any impact as those votes were called off.

Thanks to anyone who can offer insight!

It's a step. Filing bankruptcy doesn't immediately terminate the timeshare - it has to go through a legal process which could potentially drag out but would hopefully (depending on your perspective) end in termination. Once the termination process is complete, then the saga would be over.

 

[Lowry]

How can we get rid of a Kauai Beach Villas interval ownership? We are getting too old to travel. Our kids don't want to deal with it.

Check your mail received notice of special
meeting & Ballots .. vote to
allow board of directors to file for chapter 11 on the properties a special meeting September 19, 2025 at 9 AM ballot must be received by 4:30 PM on September 10

 

[jacknsara]

Aloha,
Enclosure #1 includes the following which I find particularly interesting:
PRI noticed the AOAO of termination of the Management Agreement effective December 31, 2025. It may be difficult fot the AOAO to find a suitable replacement manager in light of: . . .
That action has lots of implications. For now, I'll just leave it as interesting.
Jack

 

[DeniseM]

Does that mean that the board has terminated the Mgmt. agreement, or did Wyndham initiate it? On the Wyndham forum there is a thread about Wyndham getting out of multiple resorts.

 

[jacknsara]

Does that mean that the board has terminated the Mgmt. agreement, or did Wyndham initiate it? On the Wyndham forum there is a thread about Wyndham getting out of multiple resorts.

Aloha Denise,
I'm not a lawyer. My understanding of the language I quoted above is that PRI (Pahio Resorts Inc - owned by Wyndham) exercised their contractual right with due notice to inform the AOAO that they will cease managing the resort at the end of the year.
Jack

 

[DeniseM]

That is interesting!

 

[tango]

The only thing I do not understand the implications of/reason for the second part of the vote; “To authorize the Directors for AOAO KBV to acquire or accept a unit or interval prior to to a bankruptcy filing by the AOAO”. However, I voted.

 

[magmue]

The only thing I do not understand the implications of/reason for “To authorize the Directors for AOAO KBV to acquire or accept a unit or interval prior to to a bankruptcy filing by the AOAO”

I have not been following the 70+ page thread on Wyndham’s divestiture of multiple borderline resorts, but have been dipping in here and there. If I remember correctly, deeded owners at those resorts will most likely be offered points in the Wyndham trust in exchange for their cooperation. Perhaps this is that?

 

[schreff]

We just received a ballot from the KBV IOA to authorize the AOAO to 1) file Chapter 11 bankruptcy and 2) acquire a unit prior to filing, in conjunction with a special meeting of the AOAO on September 19. This seems like a good thing, but can anyone explain in plain English what a vote for these proposals means? That is, if all interval owners were to vote in favor, does that mean they are done with KBV and free of future assessments and maintenance fees? Also, does Wyndham have enough ownership to block this, if they wanted to, even if 100% of the other owners vote yes?

I'm trying to understand if a yes outcome on this vote represents a final resolution to this saga or just another step in an ongoing unpleasant process. After all, we've already voted twice not to remediate the place and yet neither had any impact as those votes were called off.

Thanks to anyone who can offer insight!

Is this ballot a yellow brick road to nowhere or a road to the end? Remember Chapter 11 bankruptcy is REORGANIZATION NOT CLOSURE. Recently, we voted to give incorporation rights to the BOD with a nebulous explanation by the BOD. Now, this latest fiasco could have multifaceted meanings.

Although the incorporation has given the BOD additional immunity, I still believe it is their fiduciary responsibility to give we the owners a full and complete explanation as to their actions and plans for the future. Most owners are not lawyers and the BOD has access to lawyers that we pay for through our maintenance and special assessment fees. How can any owner make an intelligent decision without a full explanation of the BOD's future goals.

Remember the Big Bad Wolf is behind the curtain and we little piggies mean nothing except another meal ticket.

 

[bnoble]

The only thing I do not understand the implications of/reason for the second part of the vote; “To authorize the Directors for AOAO KBV to acquire or accept a unit or interval prior to to a bankruptcy filing by the AOAO”. However, I voted.

I haven’t read the ballot yet, but this sounds like the AOAO is willing to serve as a Viking Ship for owners who don’t want to roll the dice on and/or wait out an eventual sale. The devil is in the details of course, but it is definitely unusual.

 

[DeniseM]

I haven’t read the ballot yet, but this sounds like the AOAO is willing to serve as a Viking Ship for owners who don’t want to roll the dice on and/or wait out an eventual sale. The devil is in the details of course, but it is definitely unusual.

I wondered about that too - maybe Wyndham expects the resort to sell for big bucks, so they want to own more units to get a bigger share of the pie. Or maybe they just want more control of the proceedings. Who knows...

 

[jacknsara]

My uninformed hunch is that the lawyers wanted the flexibility and this authority is not elsewhere covered. I suspect that they have gamed out many possible responses from the owners' who are suing and this authority might be needed for some scenarios.

 

[bnoble]

It sounds to me as though it is a way to provide for owners (whole or interval) who don't have the patience (or possibly the capital) to ride out the wind-down process. It will take time and cost money to do, and the unit/interval owners will have to pay for it collectively. Not everyone is going to be willing to wait while they are bleeding cash. Depending on what they plan to do, it could also be a bone thrown to whole owners with debt---if they can figure out a way to transfer the debt with the unit. I can't imagine any bank would just let the current owner(s) off the hook like that since the "buyer" is just going to default anyway.

 

[bobo2119]

Can one vote yes for Bancruptcy and no on letting board members receive a Timeshare unit

 

[jacknsara]

It sounds to me as though it is a way to provide for owners (whole or interval) . . .

The ballot we timeshare owners have received addresses how to authorize our Interval Owners Association (IOA) BOD to vote in an Association of Apartment Owners (AOAO) matter. It can be a bit challenging to keep the distinction in mind. Consequently, if passed, this measure does not authorize the AOAO to take individual timeshare intervals. I guess in theory, it could take whole units from the IOA if the IOA owned all intervals in a particular apartment. Based on my involvement on the BOD many years ago, I can state with 99.99% confidence that the IOA does not own all the intervals in any apartment. Hypothetically, if Wyndham does own all the intervals in one or more apartment units, they could ask the IOA BOD to pursue de-annexation of those units from the IOA. I consider this unlikely though not impossible.

Details aside, our choice individually is whether to pick the side of (1) the whole owners suing the AOAO and Wyndham or (2) the Wyndham dominated AOAO and IOA BODs pursuing ending the condominium and timeshare projects (whether by partition or bankruptcy).
We pick #2.

 

[kbv007]

If the outcome is bankruptcy, followed by a sale, will the resort continue to operate until the sale?

 

[DeniseM]

Hard to say - if they are going to lose their management Co. at the end of the year, who will run the resort?

 

[jacknsara]

. . . the capital) to ride out the wind-down process. It will take time and cost money to do . . . .

This reply is a pure speculation. There are so many branch points that without inside information it is impossible to have any confidence.
I'm not going to review the finances, but by recollection, both IOA and AOAO have substantial capital reserves. I have no idea if they can utilize those for wind down during bankruptcy but I assume they will seek the judge's permission.
Details are important to whoever plans to be staying at KBV on 12/31/25, but it appears that all onsite AOAO employees will be dropped from the PRI payroll. Unless a new management company is in place, I expect they will no longer show up to maintain KBV grounds and common facilities. I haven't detected that PRI notified the IOA that it is also exiting its management contract with the IOA. I have no idea how the timeshares could keep running (housekeeping and interior maintenance) for longer than a few days for an orderly transition while all timeshare users finish stays of a week or less that began no later than 12/31/25.
Who will pay to have the garbage picked up?

I wonder if the lawyers advising the whole owners considered this contingency. I wonder if they have identified a qualified management company to step in. Will the whole owners cave and accept the bankruptcy filing or contest it?

 

[CO skier]

who will run the resort?

That is a good question to ask SaveKBV.org. They had all the answers in 2019. Now they are getting their wish -- no more Wyndham. They can anoint/appoint/install any manager they want. Ahhhh, ... paradise.

The SaveKBV.org Website

Aloha. I urge ALL owners to go to the www.saveKBV.org website and read everything you can to be informed about important matters regarding this election. It's very helpful in terms of helping you fill out your ballot, recommended candidates, etc. It also has an Archive which contains a...

tugbbs.com

 

[rickandcindy23]

That is a good question to ask SaveKBV.org. They had all the answers in 2019. Now they are getting their wish -- no more Wyndham. They can anoint/appoint/install any manager they want. Ahhhh, ... paradise.

The SaveKBV.org Website

Aloha. I urge ALL owners to go to the www.saveKBV.org website and read everything you can to be informed about important matters regarding this election. It's very helpful in terms of helping you fill out your ballot, recommended candidates, etc. It also has an Archive which contains a...

tugbbs.com

Do you own at KBV?

 

[DeniseM]

Cindy - He doesn't own at KBV, but he is infatuated with Wyndham, and somehow he thinks owners must be sorry that Wyndham is leaving!

Personally, I'm thrilled to see Wyndham gone, and hopefully, it will speed up the closure and final resolution of the mess they made at KBV.

 

[bnoble]

In fairness, most of the mess was made by the builder, who was neither Wyndham nor Pahio.

I will be sad to see the resort close, but given the circumstances I think it is absoutely necessary. If it were to stay open, I'd rather have Wyndham continue to be the management company vs., say, Capital. Even GPX had its problems. Without a sales arm to recycle foreclosed deeds, the only way they can monetize non-performing intervals is through rentals, and that's a hard row to hoe at KBV even in the best of times.

GPX would have to be insane to come back to this mess, and I'm not sure there is any other management company desperate enough to do it, so I suspect it is a moot point anyway.

 

[DeniseM]

bnoble - Did you see what Wyndham did to oceanfront buildings G & H, while at the same time collecting a special assessment and telling owners they were going to renovate the buildings? IMNSHO, it's a scam: they fleeced owners as long as they could, and then they bailed out. Good riddance!

* Clarification: I'm not hoping that the board hires another management company - I think that would only prolong the inevitable. I hope the resort closes on Dec. 31st.

 

[dioxide45]

bnoble - Did you see what Wyndham did to oceanfront buildings G & H, while at the same time collecting a special assessment and telling owners they were going to renovate the buildings? IMNSHO, it's a scam: they fleeced owners as long as they could, and then they bailed out. Good riddance!

Wouldn't any SA they collected be in a bank account? It isn't like Wyndham could just take that money (other than perhaps a management fee). If the resort is to close, any remaining funds would be paid out as part of the distribution to remaining owners.