*** New Thread: KBV Vote for Chapter 11 Bankruptcy

[magmue]

What you got in the mail is not necessarily a ballot

We actually did get a ballot, with the 2 measures on it.

 

[dioxide45]

We actually did get a ballot, with the 2 measures on it.

But did you have to select someone to vote those measures on your behalf? Usually you check a box to select the board president or have to actually name someone else.

 

[magmue]

But did you have to select someone to vote those measures on your behalf?

Nope. They actually provided a link that I used to sign in and vote specifically on the measures.

 

[jacknsara]

That would mean Wyndham thinks the property has negative value. I would be surprised if that were the case.

I initially thought the same when the USPS notice and ballot arrived. However listening to the reading of the ballot measures combined with the realization that PAHIO (subsidiary of Wyndham) submitted the ballot measure led me to rethink the possibility.
Since this is purely speculative I’m not going to argue with much vigor. Ridding themselves of all direct ownership provides a defense against self dealing if Wyndham winds up being the buyer. If Wyndham thinks the project will sell for a small amount they are not giving up much. If bankruptcy proceeds adversely it frees them from MFs and SAs.

 

[dioxide45]

Nope. They actually provided a link that I used to sign in and vote specifically on the measures.

I get that, but in that online form you are likely just assigning a proxy to actually vote for those measures on your behalf at the special meeting. That seems to be how most of the online voting works. To actually vote you need to be in person. Thus instead you assign a proxy to vote for you. To you it just looks like a ballot, but it is different in a legal sense.

 

[dioxide45]

That would mean Wyndham thinks the property has negative value. I would be surprised if that were the case.

In other words, the reason to authorize the HOA to take back intervals was so Wyndham could unload what they had? Do we have any evidence of them allowing individual owners to do the same?

 

[bnoble]

That is the second ballot measure—whether we wished to empower the AOAO to take ownership of intervals or wholly owned units before declaring.

That struck me as a way to let current owners out definitively rather than waiting around for the bankruptcy process to resolve. That will be “fast” but it won’t be fast and it may require some intermediate payments before the disposition happens.

 

[dioxide45]

That is the second ballot measure—whether we wished to empower the AOAO to take ownership of intervals or wholly owned units before declaring.

That struck me as a way to let current owners out definitively rather than waiting around for the bankruptcy process to resolve. That will be “fast” but it won’t be fast and it may require some intermediate payments before the disposition happens.

Do you expect the AOAO to reach out to owners asking for them to deed back their ownerships or was it really just so Wyndham could do it? I suppose time will tell.

 

[bnoble]

listening to the reading of the ballot measures combined with the realization that PAHIO (subsidiary of Wyndham) submitted the ballot measure led me to rethink the possibility

You could be right. I wonder if the simpler (?) explanation is that this is a way to flush out some of the less patient owners to split the proceeds across fewer owners.

I suspect we will know more in a month or two.

 

[bnoble]

Do you expect the AOAO to reach out to owners asking for them to deed back their ownerships or was it really just so Wyndham could do it? I suppose time will tell.

I expect there will be an offer to let individual owners take a clean exit. But as you say—we will know soon enough.

I suspect the AOAO would have difficulty offering the option only to some (or more accurately one) owner, as they have a duty to all owners.

 

[bnoble]

It does not have the usual proxy language. But it would not surprise me if they called advance votes proxies during the meeting out of custom.

 

[bnoble]

Ridding themselves of all direct ownership provides a defense against self dealing if Wyndham winds up being the buyer.

I was thinking about this some more. Why would Wyndham buy it? The property is close to being a tear-down, it’s not in a location that most tourists (meaning: potential timeshare buyers) understand well, and given that Wyn is shedding other much more viable resorts, they don’t seem to need the inventory for the Trust product.

If they had a “regular” development arm, then I could se it. But if anything they have been going asset-light lately.

 

[TUGBrian]

usually members are sent both a ballot and a proxy. you fill out the ballot and bring it with you to the meeting to cast your vote in person or fill out a proxy form to give your vote to someone else to cast a vote on your behalf as you WONT be present at the meeting.

there are some wild languages in some covenants/bylaws that ive seen varying from "the secretary is by default granted to vote for all received proxys by members of the association"....to a ridiculous one that granted the board ALL proxy votes by default for any owners that didnt turn in a vote or a proxy form (ive no idea how this would ever pass someone challenging it in court...but noone has yet)

 

[jacknsara]

Aloha,
I’m away from home and do not have access to the USPS notice we received. I looked but did not see where any tugger posted it on TUG.
Does the language in the second motion include a term equivalent to “before” as in the AOAO is authorized to receive whole or interval ownerships BEFORE filing for bankruptcy?
I'm too old to trust my memory but that is what I thought I heard when the motion was read.
Mahalo,
Jack

 

[bnoble]

Yes.

Authorize the Board of Directors for AOAO KBV to acquire or accept a unit or interval prior to a bankruptcy
filing by the AOAO KBV.

 

[jacknsara]

Yes.

Authorize the Board of Directors for AOAO KBV to acquire or accept a unit or interval prior to a bankruptcy
filing by the AOAO KBV.

Aloha,

I’m not a lawyer so keep that in mind while reading the rest of this post.

Now that both motions have passed, I doubt there is any requirement for the AOAO or IOA boards to further notify owners and wait a specified number of days before filing the bankruptcy petition; perhaps they are required to notify all owners of the result of the vote. I believe anyone who wants to turn their ownership into the AOAO should proceed as fast as they can to begin that process, Of course, PRI (aka Wyndham) proposed the measure and has had plenty of time to prepare.

My main point in an earlier post is that the primary beneficiary of this second motion is PRI (Wyndham). My earlier speculations on why they would want it is just that: speculation. For others wanting to benefit from the second measure, I recommend assuming the starting gun has fired and get going ASAP.

We do not currently intend to pursue turning our ownership in, but that may change in the near term.

Jack

 

[tango]

Personally I do not see the benefit of giving back my interval to the AOAO simply to rid myself of the spectacle that would be the bankruptcy and liquidation process. I do not plan to invest any more money in the process, and I don’t see how anyone can make me. If it ends up that I am simply forced to sign away my deed, then so be it, in the mean time there’s always the possibility for receiving some little settlement, no matter how long it takes. It might be entertaining.

 

[jacknsara]

That sounds like just the mgt contract for AOAO and not the IOA? Jack fact check me here, but trying to understand how significant this really is.

For those who don't follow this closely, in the past KBV has had different mgt contracts for the AOAO (entire complex) and IOA (just the timeshare functions for the units managed by the IOA) in past - back when Grand Pacific held the IOA contract while the AOAO mgt contract remained with Wyndham.

Likewise the IOA contract is the more complicated contract - front desk, check-in, reservations, housekeeping.

Aloha,

I haven’t read any governance document or contract that specifically addresses this question since I resigned from the IOA BOD in 2019. ( https://tugbbs.com/forums/threads/kbv-2019-annual-meeting-report.290478/ ) However I can confirm that the contracts were separate because the AOAO and IOA are separate entities. Since they are still separate entities, I assume they remain separate contracts.

One possible benefit to PAHIO (Wyndham) of relinquishing all ownership at KBV is to remove the appearance or at least strengthen their defense that there is no conflict of interest between instigating the bankruptcy process and benefiting from it.

Jack

 

[bnoble]

One possible benefit to PAHIO (Wyndham) of relinquishing all ownership at KBV is to remove the appearance or at least strengthen their defense that there is no conflict of interest between instigating the bankruptcy process and benefiting from it.

I think I see what you are saying now. The property has (some) salvage value, and if there is a third party buyer, Wyndham is not profiting from the sale---which is also unlikely to be large, so they aren't giving up that much.

 

[bnoble]

Interestingly, the other resorts that are closing via the HOA Bankruptcy model appear not to have the transfer-prior-to-bankruptcy provision. So, there is something different about KBV. Could be the lawsuit, but it could also be the scope of the structural problems.

 

[dioxide45]

Interestingly, the other resorts that are closing via the HOA Bankruptcy model appear not to have the transfer-prior-to-bankruptcy provision. So, there is something different about KBV. Could be the lawsuit, but it could also be the scope of the structural problems.

Perhaps they expect the lawsuit or other compensation paid to whole owners to wipe out most of the residuals that would get paid to interval owners?

 

[jacknsara]

Perhaps they expect the lawsuit or other compensation paid to whole owners to wipe out most of the residuals that would get paid to interval owners?

Aloha,
Interval owners are entitled to 1/51 of the equivalent size whole owner unit. Of the 150 apartments, only 45 are not in the timeshare. All should proportionally share any residual.
Jack

 

[jacknsara]

Perhaps they expect the lawsuit or other compensation paid to whole owners to wipe out most of the residuals that would get paid to interval owners?

Aloha,
I believe the notice we all received indicated that the lawsuit would be suspended by the bankruptcy. My opinion is that Wyndham has / had no intention of settling for more than a token amount to cut off future legal costs.
Jack

 

[skcamerabuff]

Did anyone owning at KBV watch the zoom meeting regarding the bankruptcy on Sept 19th, 2025??? I sent in the ballot early for both the bankruptcy and to turn back the intervals at that time also. Wyndham cannot own and manage the property at the same time during bankruptcy because of conflict of interest. So management with Wyndham is over Dec 31, 2025. I do not believe any corp will take over management with such a mess with the Condemned buildings G & H and the ongoing deliquencies and maintenance issues. I hope that all will be resolved as to maintenance fees early, so that with the intervals that I currently own going back to ownership Wyndham, no maintenance fees for any of 2026. I bought 20 years ago on resale and now want out totally. If anyone watched the zoom meeting, I would love to know what was said. This will be a fire sale of some sort. If Wyndham is dumping so many properties, it will totally dump this one. I do not care to trade for points in their system, but just want out of KBV. I do own an interval at The Cliffs in Kauai and love it there. I will use that. I have some points with Wyndham that is very minor too. I also paid the Special Assessment that I will not get back, since buildings G and H are to be demolished. I would love to hear from all of you about your views and all updates you are aware of.

 

[DeniseM]

Yes - that's what this thread is about...