Marriott Aruba Ocean Club Owners Being Ripped Off By Marriott - READ IF AN OWNER

[ecwinch]

Unless, Allan's statement is interpreted to mean, "... Marriott does not vote [in an Board election for Owners] (as A members), because they feel that the Owners should have their say and Marriott would not want to influence the election of Owner Members...."

Lots of loose interpretation there, I know, but it was the only way Allan's statement made any sense to me if he was not referring to proxy votes. And I don't expect that even he would make that deliberate a misstatement to further his agenda. As I said, if they are proxy votes the entire argument is changed, and not in his favor.



Agreed.

Without hard data we are spinning our wheels. So to spin them a little more:

In Allan's recap he shows that MVCI voted both as a owner (on the basis of some units they were holding for resale), and their large block of B votes. When he says they voted as "A" members, I think he is referring to them casting the votes for the units they held.

I do not find the fact that they voted as an owner as material. They clearly had a right to do, regardless of past practices. And those votes were not the margin of victory, the "B" votes were.

I would just like to know the basis for those "B" votes. If they are not proxies, then they must be outlined in the By-Laws somewhere.

 

[SueDonJ]

There has to be a quorom (25%) of the voting shares, which is why the proxy company made calls to all owners who didnt vote to get them to vote.

THe B shares are not proxy's assigned to marriott. THey are the shares assigned to Marriott in the mgmt agreement for commercial use and common facilities not exclusivly used by A share members (which are the owners). They did own @145 units A shares, that were bought or taken back from owners.

I think I get it now. Marriott held 1,730 votes for that meeting - the 1,500 B Shares that they hold as the management company, and the 230 A Shares that they hold as unsold inventory. But Allan said that historically Marriott/MVCI had not voted A Owner shares in member elections, which confused the issue of what constitutes A and B shares and whether or not proxies were counted among those numbers.

Hmmmm, interesting. Had Marriott/MVCI voted their B shares in the past, or was that also a tactic used first with this vote?

Obviously, the Marriott representatives needed to vote both B and A shares because the 1,500 B shares alone would not give Frank Knox enough votes to be elected.

But still, nothing about Marriott's/MVCI's actions was illegal. Unprecendented? Yes. Questionable? No.

 

[ecwinch]

There has to be a quorom (25%) of the voting shares, which is why the proxy company made calls to all owners who didnt vote to get them to vote.

THe B shares are not proxy's assigned to marriott. THey are the shares assigned to Marriott in the mgmt agreement for commercial use and common facilities not exclusivly used by A share members (which are the owners). They did own @145 units A shares, that were bought or taken back from owners.

But who voted those proxies that the "proxy company" obtained?

And in regard to the "B" shares, where are those votes authorized:

If you mean a document called the "Declaration", then that would be fine.

If you mean the By-Laws, then that is fine also.

But having them in a mgt agreement would not be fine. In the hierarchy of documents, mgt agreements are subordinate to the provisions of the Declaration and By-Laws.

Mgt agreements are entered into by the BoD. They assign certain rights that the BoD have to the Manager.

Unless the By-Laws have a provision for these B votes, then the BoD could not assign votes to the Mgt company.

Unless you have some really whacky agreements in Aruba.

 

[ecwinch]

Obviously, the Marriott representatives needed to vote both B and A shares because the 1,500 B shares alone would not give Frank Knox enough votes to be elected.

But still, nothing about Marriott's/MVCI's actions was illegal. Unprecendented? Yes. Questionable? No.

As a Marriott shareholder, I would argue that they had a duty to votes their shares. In a contested election like this one, failing use their votes, might be viewed as a breach of their fiduciary responsibility to their shareholders.

 

[modoaruba]

So if Eric is correct with (plus or minus) 23% of owners participating in the election,and logically not all of those 23% would be in agreement with the dissention group,how can anything be changed?
Unless a foul of the law can be argued inconclusively,does the dissention group have a right to make decisions for the silent 77%?
This has been my point even though I do agree with most of the "cause".

 

[SueDonJ]

As a Marriott shareholder, I would argue that they had a duty to votes their shares. In a contested election like this one, failing use their votes, might be viewed as a breach of their fiduciary responsibility to their shareholders.

Oh, I agree, because they'd already been given notice that a minority ownership group would be attempting with their votes to oust a board member who was acting in the majority owners' and management group's best interests. No shareholder would want that to happen uncontested.

 

[SueDonJ]

So if Eric is correct with (plus or minus) 23% of owners participating in the election,and logically not all of those 23% would be in agreement with the dissention group,how can anything be changed?
Unless a foul of the law can be argued inconclusively,does the dissention group have a right to make decisions for the silent 77%?
This has been my point even though I do agree with most of the "cause".

Unless there is some validity to Eric's thoughts that the B share votes cast by Marriott/MVCI may be legally challenged,* there isn't any way to change the results of that election. BUT, the by-law protection which allows a minority (10%) ownership group to petition for a special meeting to initiate a membership vote to remove members of a BOD can be invoked at any time, subject to proper legal submission.

*I think this is the first time questions have come up involving the legality of those B votes (as opposed to the discussion of their unprecendented use being "morally" incorrect.) Is it really possible, after all this time and research has been expended, that this group and their legal advisors could have missed such a basic illegality? I don't know why I would be shocked at that, but I would.

 

[modoaruba]

Oh, I agree, because they'd already been given notice that a minority ownership group would be attempting with their votes to oust a board member who was acting in the majority owners' and management group's best interests. No shareholder would want that to happen uncontested.

When you say acting in the majority of owner's best interest you are projecting that as a factual statement. Realistically, since the majority of owners don't give a hoot as shown by election turnout numbers, Marriott can vote in the guise of what is in the best interest of the owners.
What is or isn't in the owner's best interest is irrelevent given the numbers.
If I was shown that a majority of owners,51% or more,are OK with the status quo I would oblige since it's the right thing to do.
Since that cannot happen, I oblige because thats the way it is.

 

[SueDonJ]

When you say acting in the majority of owner's best interest you are projecting that as a factual statement. Realistically, since the majority of owners don't give a hoot as shown by election turnout numbers, Marriott can vote in the guise of what is in the best interest of the owners.
What is or isn't in the owner's best interest is irrelevent given the numbers.
If I was shown that a majority of owners,51% or more,are OK with the status quo I would oblige since it's the right thing to do.
Since that cannot happen, I oblige because thats the way it is.

You're right, of course - it can be debated whether Marriott's/MVCI's votes are in support of how the majority would vote if there was 100% turnout. What I should be saying is that Marriott/MVCI is speculating and can protect/justify its vote actions by presuming that the majority owners don't agree with this minority ownership group by virtue of their silence on the subjects.

 

[modoaruba]

You're right, of course - it can be debated whether Marriott's/MVCI's votes are in support of how the majority would vote if there was 100% turnout. What I should be saying is that Marriott/MVCI is speculating and can protect/justify its vote actions by presuming that the majority owners don't agree with this minority ownership group by virtue of their silence on the subjects.

And VOILA! We have an understanding.
Next time at the AOC I'll be basking in the sun with the only thought in my mind of
"whatever".

 

[SueDonJ]

And VOILA! We have an understanding.
Next time at the AOC I'll be basking in the sun with the only thought in my mind of
"whatever".

Not even a thought about whether your next drink will be an iced tea, a beer or one of those frozen chick drinks, or whether that night's dinner will be steak or seafood? I like your idea of vacation.

 

[ecwinch]

Not even a thought about whether your next drink will be an iced tea, a beer or one of those frozen chick drinks, or whether that night's dinner will be steak or seafood? I like your idea of vacation.

Sorry my rule is never have what a frozen chick orders. Nor pay for it.

Avoid frozen chicks entirely. Frozen chicks just break your heart.

 

[ecwinch]

Just realized that the count was 736 to 875, and that I would tag one on for "whatever"

 

[lovearuba]

Questionable no?

I think I get it now. Marriott held 1,730 votes for that meeting - the 1,500 B Shares that they hold as the management company, and the 230 A Shares that they hold as unsold inventory. But Allan said that historically Marriott/MVCI had not voted A Owner shares in member elections, which confused the issue of what constitutes A and B shares and whether or not proxies were counted among those numbers.

Hmmmm, interesting. Had Marriott/MVCI voted their B shares in the past, or was that also a tactic used first with this vote?

Obviously, the Marriott representatives needed to vote both B and A shares because the 1,500 B shares alone would not give Frank Knox enough votes to be elected.

But still, nothing about Marriott's/MVCI's actions was illegal. Unprecendented? Yes. Questionable? No.

Are you serious, questionable no? Not to offend you but I have to do the same thing I do with Eric, what is your relationship to Marriott. Its certainly bias. Although with Eric I do think he has some comments that look at both sides of the issue. Your comments are strictly bias to Marriott, I have to wonder why? Fact, Marriott monitors this site and comments on it.

 

[ecwinch]

Are you serious, questionable no? Not to offend you but I have to do the same thing I do with Eric, what is your relationship to Marriott. Its certainly bias. Although with Eric I do think he has some comments that look at both sides of the issue. Your comments are strictly bias to Marriott, I have to wonder why? Fact, Marriott monitors this site and comments on it.

Ok, we need to come clean.

MVCI called us all up and said if we came over here and tried to submarine the crusade, that we would get free internet, free parking, 10 free drink coupons, and room upgrades.

I tried to keep it from you, but your repeated questioning of our motives has worn down my resolve. It is kinda like a chinese water torture test, and you have broken me with your unrelenting focus on this question.

Sorry, Sue, Eric, and others, I broke. The gig is up. We should just come clean.

 

[Dean]

I know I was presumptuous. Many responses on this blog have been so by claiming that a party acted that way because---(fill in the blanks) without concrete knowledge of that parties real intentions.
If we look at how we elect officials,we do so by a majority vote.
Do the Majority really vote? Or is it that the majority of the Minority that votes the candidates in? What are historical election turnouts in percentage?
Either way,most votes win.
When it may be deemed that the officials are not really representing their voters but only their own interests,it is up to those who care to take a stand and become the movers and shakers to PROVE this point to a higher court.
These voters are usually a minority.
It is very difficult to get a true majority to band together and even more so to agree.
That's why, in my opinion,officals get away with what thet get away with.
They take the opportunity to take advantage of the situation knowing that the majority would never take a stand.
My opinion.

I realize that one must make some assumptions to discuss this issue and your assumptions may indeed be correct, but they may not be. Usually votes such as this are in the 5% or less of total potential votes, if 25% are required, that's high IMO. Often there is a minimal % of votes required to conduct certain type of business or often if you don't get a min % of total voters, a second meeting with a lower % is required. Another reason some of us were hoping to see the various legal paperwork that deals with this issue. I would agree that as a generalization, most voters don't have a clue. I own a resort that set the budget and certain cost items as separate agenda items. They approved the cost items but not the budget, quite funny I thought.

I think one fundamental difference between myself and some of the rest is that in my view, Marriott is an owner to and has the right to vote their units just like anyone else and it mattes not in my mind if they have or have not done so in the past. To me, this is the members voting. Whether the commercial unit shares are votable again comes back to the legalities spelled out in the paperwork, not whether they've used them in the past.

 

[ecwinch]

I realize that one must make some assumptions to discuss this issue and your assumptions may indeed be correct, but they may not be. Usually votes such as this are in the 5% or less of total potential votes, if 25% are required, that's high IMO. Often there is a minimal % of votes required to conduct certain type of business or often if you don't get a min % of total voters, a second meeting with a lower % is required. Another reason some of us were hoping to see the various legal paperwork that deals with this issue. I would agree that as a generalization, most voters don't have a clue. I own a resort that set the budget and certain cost items as separate agenda items. They approved the cost items but not the budget, quite funny I thought.

Dean,

Like you, I questioned the 25% percentage. It seemed high for a quorum requirement.

My thought was that someone was reading a section related to amending the By-laws. Typically I see requirements increase in the following fashion:

% required to call a special meeting
% required for meeting quorum
% required to amend By-Laws
% required to amend the Declarations
% required to amend the Declarations that materially adversely affect the rights of Members

from lowest to highest

For the AOC, having a 10% requirement to call a special meeting, with a 25% requirement to meet quorum, would effectively negate the right for any action to be taken at a special meeting (if only the members requesting attended/voted).

We keep banging up against our inability to read the By-Laws.

 

[tlwmkw]

I haven't chimed in for a while because I don't really see how this can come to a conclusion that will mollify the dissatisfied owners group but one thought does keep coming to my mind as I read through this thread. What control do you believe that MVCI has over Frank Knox or indeed any other members of the board? If you allow that they are just owners who are willing to sit on the board like anyone else then how can Marksue and lovearuba keep accusing them of being puppets of MVCI? It just doesn't make sense to me- as it is the much revered Allan Cohen was allowed to run for the board (and even become president) by the evil folks at MVCI. Why did they allow him in in the first place? I guess their usual puppet mind control techniques failed on him and so he became a dissident. If you think about the facts it is really ridiculous to assume that Marriott knows what Frank Knox, or anyone else for that matter, will do in any given situation so why would they go out on a limb to make sure he is voted on to the board?

Anyway, I still think the dissident group should look to the future and focus on insuring that the resort is in good repair and that MF's are set at a level so that they will not get hit in the future by SA's that bust the bank. I know that there are lots of "secret reports" that only Allan and Marksue are allowed to see but I don't think even those will triumph in this situation. You will just end up paying for lots of expensive lawyers and may end up in a worse place than you are now. Be careful what you wish/litigate for. You have been getting good advice from ecwinch and suedonj- don't write them off as Marriott supporters- they just see both sides.

 

[Dean]

I haven't chimed in for a while because I don't really see how this can come to a conclusion that will mollify the dissatisfied owners group but one thought does keep coming to my mind as I read through this thread. What control do you believe that MVCI has over Frank Knox or indeed any other members of the board? If you allow that they are just owners who are willing to sit on the board like anyone else then how can Marksue and lovearuba keep accusing them of being puppets of MVCI? It just doesn't make sense to me- as it is the much revered Allan Cohen was allowed to run for the board (and even become president) by the evil folks at MVCI. Why did they allow him in in the first place? I guess their usual puppet mind control techniques failed on him and so he became a dissident. If you think about the facts it is really ridiculous to assume that Marriott knows what Frank Knox, or anyone else for that matter, will do in any given situation so why would they go out on a limb to make sure he is voted on to the board?

Anyway, I still think the dissident group should look to the future and focus on insuring that the resort is in good repair and that MF's are set at a level so that they will not get hit in the future by SA's that bust the bank. I know that there are lots of "secret reports" that only Allan and Marksue are allowed to see but I don't think even those will triumph in this situation. You will just end up paying for lots of expensive lawyers and may end up in a worse place than you are now. Be careful what you wish/litigate for. You have been getting good advice from ecwinch and suedonj- don't write them off as Marriott supporters- they just see both sides.

To play the devils advocate to a degree, I do know it is very possible for a management company to control a BOD in a number of ways. One, they tend to be intimidating in their presentation and in the numbers and info they throw around. Another, they can be heavy handed if they so choose. Marriott can be a lot of both when they see the need. And likely the most common and most effective way, they can provide the info they want in the way they want you to receive it. On top of that, Aruba really is a good ole boy network in many ways. I have owned at a resort in Aruba that has gone through much the same issues with 3 SA and a 25% fee hike that was essentially an ongoing SA. Including lack of payments from the developer to the management company (their management company) for years along with many other very questionable issues. The second SA was essentially to do the same things that the first one was scheduled for, no explanation was ever offered as to why. Just by sheer luck, I missed them all by being in between units (having sold some and buying back later) and then for the last one, having converted to the points system where the SA was spread over much of the entire membership in those points. Fortunately I paid a SA of less than $50 rather than the $8000 it would have been had I still owned the fixed weeks. I wish I could say it was skill or knowledge that I missed all the extra expenses but the truth is it was pure luck. And fortunately I did not know of any of the SA at the time I sold any units in question so there was no disclosure issues.

 

[SueDonJ]

Are you serious, questionable no? Not to offend you but I have to do the same thing I do with Eric, what is your relationship to Marriott. Its certainly bias. Although with Eric I do think he has some comments that look at both sides of the issue. Your comments are strictly bias to Marriott, I have to wonder why? Fact, Marriott monitors this site and comments on it.

Yes, I am serious, and I have already written my explanation and my connection to Marriott (which is the same as yours - I'm an MVCI owner.)

If Marriott is reading, I hope that they intend to compensate me in some way.

 

[SueDonJ]

Ok, we need to come clean.

MVCI called us all up and said if we came over here and tried to submarine the crusade, that we would get free internet, free parking, 10 free drink coupons, and room upgrades.

I tried to keep it from you, but your repeated questioning of our motives has worn down my resolve. It is kinda like a chinese water torture test, and you have broken me with your unrelenting focus on this question.

Sorry, Sue, Eric, and others, I broke. The gig is up. We should just come clean.

OH DANG! You mean you all are already getting compensation?!?! All they promised me was a TOP 25 spot on The Good Owner list!

It is time to look up Scott Boras. Hmmmph.

 

[Chemee]

But who voted those proxies that the "proxy company" obtained?

I can answer this for you since we are MAO owners who submitted a proxy vote. There were two options - Frank Knox to vote for you or write-in a name of someone who was attending the meeting to vote for you.

I also want to say that we did not vote for Frank Knox. Our vote was based on the bios we received, not this thread (I'm not a diehard follower & think it's past it's useful purpose). Upon review of the bios, it was clear to us that another candidate was better qualified. We are perplexed to why Marriott voted it's shares to keep Frank Knox on the Board since obviously more than the 10% Concerned Owners Group voted not to reelect Mr. Knox.

 

[SueDonJ]

To play the devils advocate to a degree, I do know it is very possible for a management company to control a BOD in a number of ways. One, they tend to be intimidating in their presentation and in the numbers and info they throw around. Another, they can be heavy handed if they so choose. Marriott can be a lot of both when they see the need. And likely the most common and most effective way, they can provide the info they want in the way they want you to receive it. On top of that, Aruba really is a good ole boy network in many ways. I have owned at a resort in Aruba that has gone through much the same issues with 3 SA and a 25% fee hike that was essentially an ongoing SA. Including lack of payments from the developer to the management company (their management company) for years along with many other very questionable issues. The second SA was essentially to do the same things that the first one was scheduled for, no explanation was ever offered as to why. Just by sheer luck, I missed them all by being in between units (having sold some and buying back later) and then for the last one, having converted to the points system where the SA was spread over much of the entire membership in those points. Fortunately I paid a SA of less than $50 rather than the $8000 it would have been had I still owned the fixed weeks. I wish I could say it was skill or knowledge that I missed all the extra expenses but the truth is it was pure luck. And fortunately I did not know of any of the SA at the time I sold any units in question so there was no disclosure issues.

I agree that it is possible for the management companies (in this case, Marriott/MVCI) to be heavy-handed with the boards, and I fully admit that as a satisfied owner of MVCI property I give them leeway because I am familiar with how their management style can add immensely to the value of a resort. I also don't automatically look for illegalities in any of their decisions or maneuvers because I figure that they could not possibly have become as successful as they are if their business practices are not sound.

But of course it IS possible for them to make improper moves at any time, and it doesn't make any sense at all to not be on the lookout for those instances. Nothing in this thread, though, has made me think that Marriott/MVCI/the BOD has acted illegally. What I don't understand, what I keep coming back to, is that the questions raised here in this thread concerning the actions that Marriott/MVCI/the BOD have taken during this ongoing debacle should have been anticipated - would have been by qualified legal representation - before this minority group took any of their actions. It boggles my mind that anybody could think they could go up against a corporation as large and established as Marriott without proper preparation or representation.

 

[SueDonJ]

I can answer this for you since we are MAO owners who submitted a proxy vote. There were two options - Frank Knox to vote for you or write-in a name of someone who was attending the meeting to vote for you.

I also want to say that we did not vote for Frank Knox. Our vote was based on the bios we received, not this thread (I'm not a diehard follower & think it's past it's useful purpose). Upon review of the bios, it was clear to us that another candidate was better qualified. We are perplexed to why Marriott voted it's shares to keep Frank Knox on the Board since obviously more than the 10% Concerned Owners Group voted not to reelect Mr. Knox.

I appreciate your good, solid reasoning for not casting your vote for Frank Knox, and the fact that you offered something new to this discussion. Thanks.

I think, or I would expect, that if enough votes to equal a majority of the entire ownership had been cast to result in Frank Knox not being reelected, Marriott would have either abstained from casting their votes or thrown their votes in with the majority. Of course I have no idea, but that's what I think, and it's not based on any goodwill feeling I have for Marriott. It's because if that was the circumstance, it would have been pointless for Marriott to vote for Frank Knox simply because their votes would not result in him being reelected - they don't hold enough shares for that.

I think, again, that the reason they did cast their votes for Frank Knox was because (one) by doing so they could effectively manage the election and (two) Frank was the sitting President of the BOD that made the unpopular decisions/actions to increase the maintenance fees and levy a special assessment fee. The fact that this minority ownership group opposed his reelection probably played a part, also, but to a lesser extent. Marriott/MVCI probably considered that it would be that much more difficult for a new President to come in so soon after the implementation of the fee increases while all this turmoil is swirling.

But of course, that's only my speculation and opinion.

 

[ecwinch]

I can answer this for you since we are MAO owners who submitted a proxy vote. There were two options - Frank Knox to vote for you or write-in a name of someone who was attending the meeting to vote for you.

I also want to say that we did not vote for Frank Knox. Our vote was based on the bios we received, not this thread (I'm not a diehard follower & think it's past it's useful purpose). Upon review of the bios, it was clear to us that another candidate was better qualified. We are perplexed to why Marriott voted it's shares to keep Frank Knox on the Board since obviously more than the 10% Concerned Owners Group voted not to reelect Mr. Knox.

Idle speculation again - but if Frank was the party designated to vote the proxies, then I think the bump is from the proxies rather than the B votes. Any proxy solicitation from the BoD usually receives a decent turn-out. So if the original report of 300 or so votes for Frank is correct, then either the proxies were nominal or the votes attributed to the B shares were actually the proxies.

Either is possible.

And the whole explanation of the B votes being for the commercial use and common facilities does not make sense. Do they pay m/f on the common facilities? And they rent the commercial areas. Who would give HOA votes to someone that rents commercial space. How did the Budget rent-a-car desk vote their ballots? Something is not right there.

And if the "crusaders" want to complain about something, it should be that Frank was designated to vote the proxies. A BoD member running for election has an inherent conflict of interest if allowed to vote proxies in their favor. The proxies should go to the BoD, and should be voted based on the decision of the BoD with any members up for reelection not voting.

Or more appropriately, the BoD should only solicit proxies for the purpose of meeting quorum.