Demeure - UE

[ClubsRDead]

Well another Demeure communication adding another week to the "closing." In typical JT fashion they have crafted the message by creating the allure of false demand - just like Jim did with the assessment "due to overwhelming response." They're also giving us the "opportunity" to be a**-raped by purchasing the UE homes they are leasing from Cap Source at abnormally high prices much more than they were offered during the auction process. On this note they elude to their being "multiple interested parties" and I find that hard to believe that anyone would buy something for 2-3 times retail. This just keeps getting better and better, you'd think they would know that we've all given our money to the kings of spin for so long that we're not inclined to do it again, especially just to line the pockets of others and get no real economic benefit ourselves.

 

[OneMoreTime]

Well another Demeure communication adding another week to the "closing." In typical JT fashion they have crafted the message by creating the allure of false demand - just like Jim did with the assessment "due to overwhelming response." They're also giving us the "opportunity" to be a**-raped by purchasing the UE homes they are leasing from Cap Source at abnormally high prices much more than they were offered during the auction process. On this note they elude to their being "multiple interested parties" and I find that hard to believe that anyone would buy something for 2-3 times retail. This just keeps getting better and better, you'd think they would know that we've all given our money to the kings of spin for so long that we're not inclined to do it again, especially just to line the pockets of others and get no real economic benefit ourselves.

Agree that this is right out of JT's playbook. How many extensions did it take for JT to close on the TH deal....

It just goes to reinforce the fact that Demeure needs OUR money to buy or pay the carry on THEIR new assets.

Odds are they will get another extension that will go beyond the DIP final funding date....

 

[TarheelTraveler]

UE

Cleaning out my in box and came across this email from UE:

"RECEIVE ONE YEAR OF TRAVEL WITH NO DUES WHEN YOU JOIN ULTIMATE ESCAPES!
Dear ,

2009 is coming to a close. Ultimate Escapes leveraged the soft real estate market and abundance of opportunities to enhance the Member experience and grow the Club!

Here’s a recap of our top accomplishments in 2009:

1.
Acquired Private Escapes, the 3rd largest destination club—adding 49 new residences, 16 additional destinations, and 387 Club Members

2.
Became the first publicly-traded luxury Destination Club in the world (ticker symbol: UEI)

3.
Added NEW RESIDENCES and DESTINATIONS!

•
Telluride, Colorado—definitive agreement to purchase 3 Elite ski residences

•
Alys Beach, Florida—made available new destination on the Florida Gulf Coast

•
Capella Pedregal, Cabo San Lucas—reciprocal use of 3 and 4-bedroom villas in this exclusive resort


4.
Delivered record numbers of Member experiences—with over 6,800 trips fulfilled for our Members in 2009

5.
Introduced the Reciprocity Program allowing all Members, regardless of their primary club, to utilize any of our 130 homes across our 3 clubs

6.
Launched a brand new Members-Only Website with all new features to better showcase reservation availability and to provide home details

7.
Became the market leader in the industry, setting a new standard with full public financial disclosure, largest membership growth in one year by any destination club, and expansion in a time of industry contraction



We're excited to present you with the Best Offer of the Year...Join Now and Get One Year of Travel with No Dues!

CALL ME TODAY TO LEARN MORE ABOUT HOW YOU AND YOUR FAMILY CAN ENJOY ULTIMATE ESCAPES MEMBERSHIP!

Warm regards, "

Just craziness.

 

[ClubsRDead]

Let me guess, you received this from Mr. Healy, or Mr Tousignant??

 

[Kagehitokiri2]

re demeure - wasnt TTT person talking about selling on DC4MS? also, one key world residence owners might be another good target.

interesting article re homeaway >
http://blogs.wsj.com/venturecapital/2010/03/05/the-100-million-revenue-club-homeawaycom/
raised $405mm, revenue $120mm

http://www.homeexchange.com/ exchange only

http://techcrunch.com/2010/10/29/google-ventures-invest-in-homeaway-at-1-4-billion-valuation/
says homeaway has raised $504mm and that google has just bought out some shareholders

...estimated revenue to be in the $200 million range, with $70 million or so in profit... [35%]

...540,000 paid vacation rental home listings throughout 120 countries...

http://www.statesman.com/business/homeaway-aims-for-major-league-splash-with-superbowl-214832.html - 2010 superbowl ad campaign

...

maybe demeure is hoping to be acquired?

if they were not looking to be acquired, they could theoretically offer UE members a "regular" equity stake in the company as well. but the dropping of equity in properties would seem to suggest what they would think of that.

 

[TarheelTraveler]

Deadline Extended to November 19, 2010

http://destinationclubnews.com/News_Demeure_Extends_Transition_Deadline_To_November_19.php

"For the past several weeks, Demeure Founder Peter Schwartz has devoted all of his time to one-on-one conference calls with Ultimate Escapes members, detailing Demeure's unique brand of destination club. In order for the club to complete these conference calls, Demeure has extended the transition deadline for Ultimate Escapes members until November 19, 2010.

"Over the past week, I personally have made several hundred calls and replied to what seems to be thousands of messages from Ultimate Escapes members," Schwartz told us. "We are inherently different from every other destination club, so it has taken some time to fully deliver our message and value proposition, but the great thing is that we've managed to refine our communications and convey that to hundreds of members."

"The great thing about Demeure is that communication is a two-way street. While we have been hard at work outlining our model and the benefits of joining, we are also listening to Ultimate Escapes members to get their first hand perspective on what they are looking for from Demeure. We have taken their candid insight and implemented it into our design in a number of areas."

"Many members are unsure how much they will travel with Demeure. With a collection of former Ultimate Escapes properties joining our already established portfolio of contributed homes, we believe members will want to travel more than they ever did at Ultimate Escapes. Because of this feedback from members, we are allowing for a one time ability for members to decrease their travel commitment by 10% or increase as much as they wish."

"Similarly, many Ultimate Escapes members have already booked new travel plans to replace the ones they lost following the bankruptcy announcement and don't want to pay again immediately. Our solution is allowing members the ability make April 1, 2011 as their anniversary date by committing to paying 50% now with the balance due on April 1, 2011."

"Finally, for Ultimate Escapes members only, we are waiving our 5% surcharge for unaccompanied guest use, which will allow members the ability to more fully utilize their membership credits by letting friends and family the ability to travel the Demeure way....""

 

[ClubsRDead]

Yep, that's what they sent to us members, another extension. Which means no one has signed up. Which isn't exactly surprising...

 

[OneMoreTime]

3rd extension? 3rd time a charm!

CRD, you are too cynical. It takes time to negotiate and cut individual deals to try and match what JT and RK had given. That way those few that do go with the plan will have negotiated the best deals....

for themselves, for as long as Demeure might last.

 

[brit007]

Which might be till the 19th November

 

[TarheelTraveler]

Quintess/DUO vs. Demeure

I guess things are getting testy between Quintess/DUO and Demeure:

http://demeure.com/news/demeure/duo-by-quintess.html

 

[TarheelTraveler]

New Press Release

http://www.prnewswire.com/news-rele...-secure-member-funds-in-escrow-108584824.html

Demeure "...today announced it has engaged an independent escrow agent to protect members' funds.

"This is a critical next step in our continuing effort to promote a higher ethical standard, transparency, and legal and fiscal responsibility into an industry that has been beset by less than stellar performance in these areas," said Peter Schwartz, Chairman and CEO of Demeure. "Beyond being representative of the principles upon which Demeure was founded, I believe it will raise the bar in the industry for stewardship and governance, and provide members with the security they deserve."

The purpose of the escrow arrangement is twofold: to ensure that members' funds, which are paid in advance for travel for the year ahead, are indeed appropriated for that travel; and, to make sure that members' funds are returned to them in the unlikely event that Demeure ceases operations.

Demeure selected International Escrow Services (IES), of Atlanta, Georgia to serve as the company's escrow agent. IES was selected by Demeure because of their specialized knowledge and experience in the vacation industry. A part of the law firm of Schreeder, Wheeler and Flint, LLP (SWF), the combined companies have served as escrow agent for over 100,000 timeshare closings and handled over one billion dollars in escrowed funds, including the Starwood Vacation Ownership timeshare sales since 2001. IES will provide detailed and individualized accounting of each member's transactions, and all activities will be audited annually by a certified public accounting firm."

I applaud any increased transparency, member protection and accountability in the industry, and, therefore, give kudos to Demeure. However, at the same time, I'm frankly bothered by the claim that this is the first for the industry and worthy of a press release. Although there have been loads of problems in the industry on the non-equity side, I believe a number of equity clubs have had similar arrangements for years with respect to member funds.

 

[travels1]

Does Rob McGrath work as a "consultant" for this escrow agent?

 

[TarheelTraveler]

More of the same:

http://www.destinationclubnews.com/News_Demeure_Secures_Membership_Funds_In_Escrow.php

"If, for some reason Demeure ceases to operate, escrowed funds are returned to members and not used to pay Demeure's creditors. There isn't another club in our industry that can make the same statement"

"I don't know how else to say it, but we are the only destination club where your membership funds truly are safe," Schwartz added."

That simply is not correct. Like I said earlier, there are equity clubs out there that provide the same protection.



http://www.prnewswire.com/news-rele...ase-of-ultimate-escapes-assets-108970854.html

"...today announced that it has reached an agreement with Ultimate Escapes CapSource to amend the asset purchase agreement and waive certain conditions to closing 6 days ahead of the November 24th deadline. Former members of Ultimate Escapes who join the Demeure community can be assured of a trusted home for their travel experience.

Demeure will be proceeding with the purchase of all the original assets listed in its court approved Asset Purchase Agreement and will also purchase an additional property in Scottsdale, Arizona. The Purchase Agreement also includes intellectual property and other critical Ultimate Escapes assets, to ensure a smooth transition of UE members to Demeure.

The Asset Purchase Agreement in its amended form represents the conclusion of the agreement between the Estate and Demeure. Demeure will also be offering employment to key Ultimate Escapes employees commencing on November 24th.

"Ultimate Escapes members have been put into an extremely stressful financial and emotional position throughout the bankruptcy process. It has been our goal to ensure their needs are at the forefront of our work," said Peter Schwartz, Chairman and CEO of Demeure. "Through the incredible efforts of our employees we have been able to convey our unique value proposition to members, which involves putting their own properties to work within the Demeure community. Our direct communication efforts with them has led to over 150 unique requests from members looking to participate in the property purchase program."

It had become clear throughout the Ultimate Escapes bankruptcy process and Demeure transition that members have individual needs requiring personalized attention. The waiver of conditions by Demeure and its commitment to proceed with the original Asset Purchase Agreement ensures members will have ample opportunity to complete commitment agreements, participate in the property purchase program and reservation lottery throughout the months of November and December.

"CRG is pleased that the conditions to close on November 24th have been waived and that CapitalSource Bank continues to work cooperatively with Demeure to reach a successful result based on the current number of property purchase inquiries," said Stephen Gray of CRG Partners."

What's the skinny on this? Was another potential buyer out there lurking so Demeure waived the conditions early? Was the support not there to meet the conditions? A combination or something else all together?

 

[AKTHUE]

Here's my gut feeling about the announcement they made today - and it's a bit of an enlightenment to me. I've kept wondering why it appears that Demeure is paying too much for properties, and why this makes sense.

The key feature for how Demeure operates is that they own no or very few properties - most of the properties are owned by members, and Demeure really makes its money as an agent mediating between owners and users of properties.

The key to Demeure isn't the few properties they will own, but whether they can get a good chunk of the UE properties bought by someone who will then commit them to use by Demeure. They must have a strong feeling that they've gotten a critical mass of UE members who have indicated they'd buy a home and contribute it to Demeure use for a minimum of 5 years, that they are willing to commit to go ahead.

 

[TarheelTraveler]

Interesting point, AKTHUE. I'm sure CapSource is thrilled to unload as many houses as possible, since the sales price to members I would think would be much better than some mass liquidation of the portfolio of houses.

 

[Kagehitokiri2]

...based on the current number of property purchase inquiries...

 

[ClubsRDead]

I will comment on both of the above postings here...

Most of the Demeure homes are NOT in fact, owned by members. In reality, the majority of them which they have listed are owned by Capital Source.

Secondly, Cap Source has not "unloaded" the homes, they are leasing a majority of them to Demeure, or planned too - and the published sales prices are much higher than the listed stalking horse prices during the auction.

No one is buying this bag of garbage...

 

[AKTHUE]

Most of the Demeure homes are NOT in fact, owned by members. In reality, the majority of them which they have listed are owned by Capital Source.

In Demeure's existing offerings, prior to the UE transaction, Demeure owned either zero or very little real estate. The properties they made available were either owned by members, or were leased, often in a way that made Demeure not much more than a rental agent (the rental charge set by the property owner with Demeure getting a portion).

Demeure would like to replicate that model for the UE offering, but to get in the door with CapitalSource they had to commit to buy some homes, and then they essentially negotiated a lease with option to buy for a bunch more - and would like to get UE members to agree to buy those and put them in the pool for 5 years. It's hard to see why that makes economic sense for a member.

 

[ClubsRDead]

It makes absolutely no sense. The rhetoric they are spewing about having phenomenal success in getting members enrolled, and the "overwhelming interest in purchasing homes by UE members" is hogwash. We've all been to these crap boxes, are well aware of the deferred maintenance issues on many (most go back to the TH days) and certainly wouldn't overpay for them.

 

[TarheelTraveler]

Demeure timeline of events:

http://destinationclubnews.com/News_Demeure_Sets_Timeline_of_Upcoming_Events.php

"...Those interested in purchasing one of the residences formerly attached to Ultimate Escapes must register their interest to purchase by this deadline. Purchase prices begin at roughly $250,000 and go as high as $3.5 million for Villa Eternidad, a four bedroom home spanning over 5,000 square feet in Cabo San Lucas...."

 

[Kagehitokiri2]

http://destinationclubnews.com/News_Demeure_Closes_On_Select_Assets_From_Ultimate_Escapes_Estate.php

Demeure is scheduled to formally announce later today that they have completed the acquisition of choice assets from the now bankrupt Ultimate Escapes and will be resuming full operations on December 4, 2010.

Demeure now owns 11 former Ultimate Escapes residences and could own up to 15 as the club is waiting for four additional properties to clear title. The rest of the former Ultimate Escapes property portfolio is available for lease to Demeure, and the final list of homes will be released in the middle of December. "There are a handful of properties that are going back to CapitalSource...ones that classically have low popularity and high operating costs or are in destinations where we can get comparable properties for lower rates."

Demeure waived select closing conditions on the acquisition of these Ultimate Escapes residences...bringing all of the Ultimate Escapes members with homes they wish to contribute to the club set up in the Demeure system. The firm commitment deadline for Ultimate Escapes members transitioning to Demeure concludes at the end of the week.

 

[OneMoreTime]

Time will tell

I can't wait to see the real numbers as Demeure claims to be a transparent entity. I have heard that less than 100 Member's have sent in a check and spoke with a Member who was able to negotiate a commitment with was only 25% of their UE dues ( now paying well under 5K!!).

Given those data points it is not hard to see why Demeure had to drop the 12MM commitment- Good luck to all involved.

 

[travels1]

So less than 100 members sign up with Demeure. Demeure takes on somewhere in the neighborhood of less than 20 of UE's properties and yet the KC staff is still working at nearly 100% of its employees. No wonder the DIP funds ran out so quickly. Can't seem to wonder how those salaries can be justified or for that matter, what they are all doing 8 hours a day 5 days a week. Can somebody help me understand this?

 

[Kagehitokiri2]

what would have been so hard about doing an equity club when demeure even originally planned it?

although i hear there are other nonequity clubs launching...

sigh.

***

http://www.bmcgroup.com/restructuring/GenInfo.aspx?ClientID=255 >
http://ultimateescapes.creditorinfo.com/default.aspx committee of unsecured creditors site i just noticed

***

the $12mm required figure is just another example of game playing. god only knows.

the numbers >

with 15% increase - 64% required
http://tugbbs.com/forums/showpost.php?p=1003384&postcount=42

without 15% increase - 74% required
http://tugbbs.com/forums/showpost.php?p=1004362&postcount=11

 

[OneMoreTime]

Another DIP

I can't quite follow who will pay the 1MM of December expenses, but Cap Source is funding it- ( http://www.bmcgroup.com/restructuring/DocView.aspx?ClientID=255&DocNumber=472&CaseNo=1-10-bk-12915) It appears the closing has been extended to 12/20.

Is Demeure going to have to pay for this "extension" due to their inablity to close- What a mess- what a surprise....not.