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Class action lawsuit filed against Wyndham (Worldmark)

T_R_Oglodyte

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RichM

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Here's a link to a Wyndham lawsuit that works. http://www.marlerclark.com/news/wyndham1.htm

Maybe that's the one Philip is referencing. From 2002 over an outbreak of samonella in one of their hotels.


That's a different one. The one PA's referring to is in regards to Wyndham's new TravelShare program. His link works, but it's in a section that requires (free, open) registration.


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PA-

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That's a different one. The one PA's referring to is in regards to Wyndham's new TravelShare program. His link works, but it's in a section that requires (free, open) registration.


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I haven't yet read all 23 pages, but I haven't come across any allegations of Samonella poisoning yet.
 

BocaBum99

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Anyone have the link to the actual complaint? Suing over Travelshare seems to be the wrong approach. Travelshare appears to be within the boards rights to create.

Maybe Wyndham launched this class action against itself since they were sure they would win it. Then, the next class action firm would be less likely to take up the case.
 

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Fighting the wrong fight...

Anyone have the link to the actual complaint? Suing over Travelshare seems to be the wrong approach. Travelshare appears to be within the boards rights to create.

Maybe Wyndham launched this class action against itself since they were sure they would win it. Then, the next class action firm would be less likely to take up the case.

I agree with BB!

As much as I detest TrendWest/Wyndham I don’t think their Travelshare program is illegal or is not permitted under the WM governing documents. But, I’m not a lawyer and the courts are hundreds of years behind the rest of the world – so who knows.

I do predict the class action lawyers will win big and the WM owners will somehow pay for this in one way or the other. So I don’t favor the legal action unless compelling evidence can be presented where TW/WN has indeed broken their own rules that they originally wrote; I don’t believe for a second that evidence exists (Well except in the eyes of the trial lawyers – both sides)

If I had to predict an outcome, the lawyers win and WM owners lose. This is the wrong issue to focus on and could actually get in the way of other actions which might stand a chance of improving the standing of WM owners in the governing of their own club.
 

Carolinian

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The issue in such a class action lawsuit is not whether they have broken their own rules but whether they have broken the consumer protection laws, which in most states are pretty broad. I am not familiar enough with this particular program to hazzard an opinion as to whether or not they might have.
 

PerryM

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This is just another trap?

It will be “fun” to see how the WM owners pay for all of this.

Just like corporations pay NO taxes so do they NOT pay for things like lawsuits – they just pass the costs on to their customers; in this case that would be the 250k WM owners. This is just more legal monkey business designed to make all the lawyers involved rich.

But, how will we WM owners pay for this? I’m guessing a $50 per year MF increase * 250,000 owners = $12.5 M per year for this lawsuit and more to come from the same firm and others who see deep pockets. You certainly don't expect that $50 to ever go away do you?

And just what will WM owners get out of this (besides the $50 per year charge) maybe a free movie rental, at the front desk, at best.

None of these lawsuits help WM owners in their fight to regain control of the WM BOD – it’s just a distraction and one that could be tacitly endorsed by WN. Relying on the government’s definition of consumer protection as the sole remedy is folly.

Let’s not forget the TW/WN pulled a fast one with TOT (Transient Occupancy Tax) in California and get a sweetheart deal with the government to make millions from the WM owners checking in each day. Any company smart and savvy enough to do this could use the courts to help in their efforts to thwart the owners from gaining control of their BOD/HOA.

So if your smiling at this lawsuit – you might be playing right into the hands of WN.
 

PA-

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There are several issues in TravelShare that can be shown to be illegal. But here's an angle I hadn't considered.

Trendwest has fiduciary obligations to the owners of Worldmark for two reasons. First, because they control the WorldMark board of directors. And secondly, because the contractual nature of the relationship between Wyndham and Worldmark prevents Worldmark from doing business with other developers.

In a normal, arm's length contract, I would agree that Wyndham isn't obligated to look out for owner's best interests. But when the contract requires Worldmark to use Wyndham into perpetuity, a different standard is required.

If it can be shown that the intent and result of TravelShare is to reduce competition from the resale market, that hurts owners when they sell their credits. Does anyone doubt that one of Trendwest's objectives was to increase their sales at the expense of resales? As evidence, it will be shown that Wyndham sales people use TravelShare as a tool to convince people to buy direct, rather than from existing owners.

While the resale market hasn't yet fallen, TravelShare is young. I believe that TravelShare, as it is enhanced, will affect resale values. And even if it doesn't, just having the intent to do so would be enough, I would think.
 

PA-

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It will be “fun” to see how the WM owners pay for all of this.

Just like corporations pay NO taxes so do they NOT pay for things like lawsuits – they just pass the costs on to their customers; in this case that would be the 250k WM owners. This is just more legal monkey business designed to make all the lawyers involved rich.

But, how will we WM owners pay for this? I’m guessing a $50 per year MF increase * 250,000 owners = $12.5 M per year for this lawsuit and more to come from the same firm and others who see deep pockets. You certainly don't expect that $50 to ever go away do you?

And just what will WM owners get out of this (besides the $50 per year charge) maybe a free movie rental, at the front desk, at best.

None of these lawsuits help WM owners in their fight to regain control of the WM BOD – it’s just a distraction and one that could be tacitly endorsed by WN. Relying on the government’s definition of consumer protection as the sole remedy is folly.

Let’s not forget the TW/WN pulled a fast one with TOT (Transient Occupancy Tax) in California and get a sweetheart deal with the government to make millions from the WM owners checking in each day. Any company smart and savvy enough to do this could use the courts to help in their efforts to thwart the owners from gaining control of their BOD/HOA.

So if your smiling at this lawsuit – you might be playing right into the hands of WN.

Worldmark won't be paying for the legal defense of this suit, or for any judgement. The suit is against Wyndham. Any efforts to get money from Worldmark will lead to another suit. Even if the suit is broadened to include the board of directors of Worldmark, it won't include Worldmark the club.

Also, one of the reasons that the law firm is working with a small group of knowledgable owners is with the express intent of reviewing for accuracy, and possibly expanding their claims. The suit is young and subject to modification. Don't jump to conclusions yet. The complaint will be widely available in 2 months or less. It will look a lot different at that time than it does now.
 

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That loud sucking sound...

Worldmark won't be paying for the legal defense of this suit, or for any judgement. The suit is against Wyndham.
<snip>

I’m not sure how we WM owners would ever find out if WN bills us for the legal bills – do we really understand what we pay for now? If WN decides they need $50 for “Global warming issues” I think most WM owners would actually applaud this; most Americans buy into this issue and seem to feel guilty and thus would pay. This $50 can be disguised hundreds of ways; the WN stockholders will not be paying for this, I think everyone knows this.

But this is now in the hands of lawyers who need a new house and this will easily pay for it. I’m sure the lawyers are all ears and nod at every complaint we owners have against WN; they know that there are 250,000 folks who will pay for their new homes.

My forecast, just like the lawsuits against RCI, will be that companies can run rings around the courts and use the courts as a convenient excuse to make a lot more money that we, the consumers, all pay for in the end (literally). We are getting sucked into the realm of consumer activism and the consumers always pay for it in one way or the other. (Higher prices and/or lesser quality)

Will I be right? Sadly it will take 5 years, and millions of dollars to probably prove me right. That loud sucking sound is your money being sucked into the lawyer’s wallets. What’s in their wallets? – Your money.

P.S.
Here's another group of lawyers busy at work: http://abcnews.go.com/GMA/story?id=3179470&CMP=OTC-RSSFeeds0312&GMA=true

The bag of popcorn we pop each day is really a killer - the lawyers will save us once again.

We need Tort reform - the loser pays ALL expenses in these lawsuits - ALL of them; this stuff would instantly stop. That one simple change would cause business to literally explode in this country - double the DOW in 3 years.
 
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BocaBum99

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There are several issues in TravelShare that can be shown to be illegal. But here's an angle I hadn't considered.

Trendwest has fiduciary obligations to the owners of Worldmark for two reasons. First, because they control the WorldMark board of directors. And secondly, because the contractual nature of the relationship between Wyndham and Worldmark prevents Worldmark from doing business with other developers.

In a normal, arm's length contract, I would agree that Wyndham isn't obligated to look out for owner's best interests. But when the contract requires Worldmark to use Wyndham into perpetuity, a different standard is required.

If it can be shown that the intent and result of TravelShare is to reduce competition from the resale market, that hurts owners when they sell their credits. Does anyone doubt that one of Trendwest's objectives was to increase their sales at the expense of resales? As evidence, it will be shown that Wyndham sales people use TravelShare as a tool to convince people to buy direct, rather than from existing owners.

While the resale market hasn't yet fallen, TravelShare is young. I believe that TravelShare, as it is enhanced, will affect resale values. And even if it doesn't, just having the intent to do so would be enough, I would think.

I like the argument because I have been saying for a while now that the key to a Class action lawsuit is to show a theory of damages that is big enough for a Class action law firm to be interested in working on contingency. And, all they need to show is a $.10/credit impact to resale prices and that represents hundreds of millions of dollars in damages.

I can see making this argument if it were an anti-trust case. But, it's a class action lawsuit that has to demonstrate damages. TravelShare hasn't been in existence long enough to do damage to owner's resale value. I'm not sure if you can sue for anticipatory damages, can you? Perhaps the evidence will show the dilution that has occurred over the past 5 years and TravelShare will exacerbate the situation. The complaint will focus on the self dealing actions of the board with many of the same attributes of the FF complaint form last year.

In any event, this is good for owners. Wyndham is clearly taking unilateral actions to devalue WorldMark owner's ownerships and proactively thwarting attempts by independents to get elected to the board.

To me, the big win is NOT in winning the class action suit. I don't need a $100 credit against my next developer purchase which is what I expect owners to net after all is said and done.

The big win is if the class gets formed and the court grants the law firm access to the owners list so that they can send them a letter. Once that access is granted, the letter will never be sent. Wyndham will settle the lawsuit and several reforms will be instituted. Until then, expect a bitter fight to the end.
 

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No lawsuit here...

I just read the lawsuit and I don’t think WN has anything to worry about – but I’m not a lawyer.

The lawyers who cooked up this lawsuit got many things right and many things wrong. The stuff they got wrong is what the lawsuit is all about.

Para 32 gets the definition of Fun Time mixed up with Bonus Time and is just wrong.

Para 33 ignores the fact that TravelShare (TS) sits “on top of” WM and is a service/product available to WM owners who pay for this extra service – the lawyers got it backwards. The lawyers never considered that the WM credits discussed belong to WN in the first place and they, just like normal WM owners, have great latitude in the usage of their own credits.

Para 34 is completely wrong in all regards.

Para 35 is fundamentally flawed and leads to false conclusions.

Para 36 is absolutely correct and it is just a definition of TS.

Para 37 is the same – absolutely correct and just a definition of TS.

Para 38 deals with the resale market and is just wild guessing by the lawyers – no way to prove their allegations.

All in all a worthless lawsuit and a waste of time. However, the lawyers will make out like bandits – both the plaintiffs and defendants.

This is almost embarrassing its so weak.

But I don't claim to be an expert on TS and maybe all the holes I see are, instead, bullet proof glass. If I do have TS wrong, please correct me - I don't have a 100% feeling that everything I understand about TS is correct. I welcome corrections.
 
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Harvey Rabbit

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You are not a lawyer...

I just read the lawsuit and I don’t think WN has anything to worry about – but I’m not a lawyer.

The lawyers who cooked up this lawsuit got many things right and many things wrong. The stuff they got wrong is what the lawsuit is all about.

Para 32 gets the definition of Fun Time mixed up with Bonus Time and is just wrong.

Para 33 ignores the fact that TravelShare (TS) sits “on top of” WM and is a service/product available to WM owners who pay for this extra service – the lawyers got it backwards. The lawyers never considered that the WM credits discussed belong to WN in the first place and they, just like normal WM owners, have great latitude in the usage of their own credits.

Para 34 is completely wrong in all regards.

Para 35 is fundamentally flawed and leads to false conclusions.

Para 36 is absolutely correct and it is just a definition of TS.

Para 37 is the same – absolutely correct and just a definition of TS.

Para 38 deals with the resale market and is just wild guessing by the lawyers – no way to prove their allegations.

All in all a worthless lawsuit and a waste of time. However, the lawyers will make out like bandits – both the plaintiffs and defendants.

This is almost embarrassing its so weak.

But I don't claim to be an expert on TS and maybe all the holes I see are, instead, bullet proof glass. If I do have TS wrong, please correct me - I don't have a 100% feeling that everything I understand about TS is correct. I welcome corrections.

I as Phillip think we need to wait and see.. You can complain all you want about Lawyers, but the fact is they are a necessary evil in our society. I totally disagree with you. But time will tell. And as Boca mentioned this will never go all the way. WVO will pull out their wallets and make some changes before it gets to far out of control.

IMHO.....
 

BocaBum99

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I read the complaint. I believe it makes some pretty pursuasive arguments. And, it is pretty well written.

I have two problems with it.

First, it doesn't even come close to addressing the most egregious activities of the board and Wyndham. Perhaps that is being saved for later.

Second, the theory of damages is quite weak. It claims that current developer prices are around $1.77/credit and $.70/credit for resale. And, it further claims that Travelshare will impact resale values in the future. I really don't think you can seek anticipitory damages.

It can easily be shown that the post card companies are having a bigger impact on resale prices than developer VIP programs.
 

PerryM

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No harm, no foul..

As I understand the complaint, 2 owners, (4 folks), each owning about 10k or so WM credits think they have been egregiously harmed – yet they never give ONE example of harm. That’s the problem – they can’t demonstrate where they have been harmed and can’t put a price tag on it.

No visits to the doctor, no lab tests proving harm, no renting exactly the same condo that they could not reserve – there isn’t ONE shred of real proof that they have been harmed. Just two owners who have a feeling that something is harming them. But when a grandma can make $1 M from McDonalds by placing a cup of hot coffee between her legs in her grandson's car and then the kid burns rubber getting out the driveway I guess anything can happen in our court system.

Now I must admit that I did not read every word of the huge document – just what I thought were the key points.

And that’s what a jury will have to be convinced of – how were those 4 folks harmed. The lawyers will be after the mailing lists and at 41¢ postage a letter, the lawyers will have no problem burning up $250k just to make ONE mailing to all WM owners; they will be making many.

I’m not saying that WN isn’t being sneaky and deceitful in their relationship with WM (they are) – it’s just the lawyers are just burning up money and haven’t proven a thing. We can expect 5 years of this - burning up money and finding no proof.

P.S.
Would I join this class-action, sure; who couldn't use a free DVD rental from the front desk. Do I expect WN to suffer any consequences - no. Do I expect WM to pay for all of this - yep (in on way or another).

I've been forecasting falling WM credits (resale) for many years now - how in the world is a lawyer going to prove that WN's actions contribute to the already falling prices?

Heck, even the lawsuit admits that resale WM credits are easily available for 70¢ each - and you know that they are high-balling that figure to begin with. (That number has to last thru 5 years of litigation)
 
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PA-

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...

The lawyers never considered that the WM credits discussed belong to WN in the first place and they, just like normal WM owners, have great latitude in the usage of their own credits.....

I'm not a lawyer, or an expert on travelshare. So I won't discuss the merits of the case. But I will comment on your quote above, as I am VERY familiar with the governing documents.

No, Wyndham does NOT have great latitude in the usage of "their own credits". In fact, they are quite limited by the governing docs as to their rights and responsibilities in relation to those credits.

Section 2.5 of the declarations states that the Declarant (Wyndham) may not perform acts that interfere with the use and enjoyment of the Property by member. Does Fun Time interfere with the members rights to Bonus Time, which is a right spefically given to members in the Club Guidelines? I'll let you decide for yourself if a reasonable person would make that interpretation. My opinion is that it DOES interfere with that right.

Furthermore, section 2.15 denies the Declarant the right to charge any fees or charges for units they reserve. Is there a fee charged for Fun Time? I believe so. You'll be particularly interested in that clause, I believe, since the Board is violating it with their new restrictions on rentals.

Section 2.16 allows Declarant use of the units for sales tours, when not "timely reserved and occupied by a member".

Section 3.2 of the declaration defines a member, and specifically states that Declarant is NOT a member of the club. Therefore I don't think they're able to use their unsold credits to reserve rooms, other than for purposes of construction, developement and sales.

Section 5.7 does appear to grant Declarant a Use Easement as to their unsold credits, but only for the "use, possession and enjoyment of the Property and the exercise of any and all rights appertaining thereto (the "Use
Easement")." Remember, the Declarant charging a fee for someone else to use it is forbidden.

Further, 5.7(b) seems to limit that right to construction, development and sales. And finally, section 9.2 states that "inconsistent provisions among various Declarations shall be resolved in favor of the most restrictive
provision on the Club or Declarant and/or the most favorable provision for protecting the Members."

Exhibit A states that "In addition, Vacation Credits are not allocated to the
above Units for the Vacation Credit equivalent of three (3) weeks
per year so that time is available for Bonus Time. The Vacation
Credit equivalent of these three (3) weeks cannot be (i) sold or
offered for sale, or (ii) rented before Members have an opportunity
to reserve them as Bonus Time in accordance with the then-current
Club Guidelines (Rules)."

It also states that 1 week is for maintainence, and has the same restrictions as the paragraph above to give owners a chance for Bonus Time, if maintenance isn't required.

Do you care to change your arguement, counselor?
 

PerryM

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I've been singled out, why not WN?

PA,

Let’s talk English, only a few here understand legalese (I sure don’t)

It’s my contention that WN owns millions of WM credits that it can do with as it wants (Within the rules of the club) – hence TravelShare (TS). As I understand what they are doing they are taking their credits and funding TS with them. If they didn’t own the credits they could not implement TS.

Is that correct?

I guess my feeling is that what they do I could do too if I wanted – IF I had some of the same clauses that are in the founding documents. (Ability to put rugs in the check-in building for instance)

If WN is violating the WM rules the BOD should comment on these alleged violations. I’m not sure how that would be done, but the BOD needs to make a rulings “Guilty” or “Not Guilty” of violating the WM rules.

Has this ever been done by the membership? i.e. presenting the violations to the BOD and asking for a clarification. Heck, the BOD singled out 3 WM owners for renting WM credits (I was one) – this should now be a precedence that should be used on ANY WM owner allegedly violating WM rules.

If this had been done then the lawsuit has some teeth to it; if not, it’s just another wild rumor.
 

PA-

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PA,

Let’s talk English, only a few here understand legalese (I sure don’t)

It’s my contention that WN owns millions of WM credits that it can do with as it wants (Within the rules of the club) – hence TravelShare (TS). As I understand what they are doing they are taking their credits and funding TS with them. If they didn’t own the credits they could not implement TS.

Is that correct? ....

No, that is not correct. The declarations I quoted restrict Wyndham's right to reserve units. Read em, they aren't that hard to understand.

As for the board enforcing the declarations? Yes, Wyndham's violations have been pointed out to the board countless times by owners. They choose to justify the actions, rather than prosecute them.
 

PerryM

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No, that is not correct. The declarations I quoted restrict Wyndham's right to reserve units. Read em, they aren't that hard to understand.

As for the board enforcing the declarations? Yes, Wyndham's violations have been pointed out to the board countless times by owners. They choose to justify the actions, rather than prosecute them.

So there is documented evidence that the above questions have been submitted to the WM BOD and we have documented evidence that they have decided to ignore these questions?

P.S.
By documented I mean a lawyer typed up the questions, sent them registered mail, and the WM BOD have ignored the questions?
 
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PA-

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So there is documented evidence that the above questions have been submitted to the WM BOD and we have documented evidence that they have decided to ignore these questions?

P.S.
By documented I mean a lawyer typed up the questions, sent them registered mail, and the WM BOD have ignored the questions?

They never ignore the questions. They always respond with justification for not enforcing the rules, or give a Wyndham spin on the issue.

For example, when it was pointed out that Wyndham violates the "relative use-value clause, the board didn't ignore the questions or deny the allegation. john henley typed up a lengthy explanation why Wyndham needed to violate it, and sent it via email to several owners. Basically, he said, "market conditions have changed, and they can no longer operate with that restriction".
 

PerryM

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Rulings and NOT $$$ should be the goal.

Reference: http://www.secinfo.com/d14D5a.v39G5.7.htm

2.5 Declarant. Notwithstanding any provision herein, Declarant shall have the right to perform such acts as are necessarily incident to construction and development of the Property and sales of the Memberships without Board approval, provided such rights shall not unreasonably interfere with the use and enjoyment of the Property by Members. Declarant shall not reserve any occupancy period earlier than 45 days before the first day of that period, and all such reservations must be in accordance with Vacation Credits attributable to Declarant, whether unsold or reacquired by Club or Declarant.

I, as a non-lawyer, read this as WN can’t make reservations before 45 days and then must follow the rules of the club. I see no other restrictions in this para.

3.2 Member. Each person who acquires sufficient Vacation Credits and is issued a Basic Membership in the Club is a Member. Except as otherwise specifically provided, Declarant is not to be deemed a Member based on unsold or reacquired Vacation Credits. For purposes of assessments and Voting Power, Declarant shall be deemed to hold the number of Memberships determined by dividing (the unsold or reacquired Vacation Credits) by (the average number of Vacation Credits per Membership held by Members other than Declarant), as adjusted periodically. Declarant’s “Memberships” shall each be deemed to consist of the average number of Vacation Credits per Membership held by Members other than Declarant.

I read this that WN’s unsold WM credits count towards voting but that’s all – WN is NOT a WM member. I don’t understand that and I’m not sure what the implications are – I’m assuming the WM BOD would rule on this confusing para.

2.15 Renting of Units. A Member other than Declarant may charge a fee or rent for the use of a Unit during such Member’s Vacation Credit Uses by a guest or invitee. However, the WorldMark Board of Directors may determine to either restrict or place conditions on rentals at particular resorts to comply with laws or restrictions by governing entities, so that The Club can own and operate at a resort location; and so that no excessive financial burden is imposed on The Club.

This para indicates that WN is not a member as pointed out in para 3.2. Beyond that this para can be read many ways and again the WM BOD should clarify the above.

If the WM BOD has been asked for clarifications to the above and refused to render a decision then a legal remedy would be the next step. However, the rulings should be the outcome and not big bucks from a Class action.
 

cotraveller

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A different, and more likely scenario. You book a cruise with credits and those credits go to Wyndham. You join TravelShare and book Fun Time, the credits that paid for the cruise are used to book the reservation. No Declarant credits are involved. They are merely the middle man for the transfer of credits from one owner to another. Owners do that all the time when renting credits from each other. Let’s not shut down the credit rental market.

In this case, as in most legal actions, the lawyers are the only sure winners.
 
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