We've been talking about this lawsuit pretty much since it has been filed. I do think people should read the documents, as they are interesting. It is worth remembering that they are not statements of fact, but assertions by each side, so neither side is necessarily completely (or even mostly) correct in their contentions.
Having paid at least semi-close attention to the lawsuit more or less since it was filed, here's my otherwise uninformed, speculative, and "I am not a lawyer" take on the current state of play: the Defendants' strategy is to starve the whole owners while continuing to limit the possible amount they can receive, to get them to give up and go away.
This is from memory, because the site is down at the moment, but here's what I remember:
- The IOA (the entity that represents the timeshare owners) was removed from the defendant list by summary judgement.
- The plaintiffs failed in their attempt to certify as a class.
- There is a draft summary judgement order removing Wyndham as a defendant; I don't think that order has been filed yet, but can't check to be sure.
If I am interpreting things correctly, that pretty much leaves only the AOAO and individual Board Members as defendants. I think there might be another entity or two in the defendant list, but I can't remember---maybe they are trying to bring in the original developer, but I'm not sure that entity exists anymore.
This vote is to limit the amount that the whole owners can possibly extract from the AOAO. Even if this vote fails, the AOAO is just "the people who own the apartments". Wyndham is one of those "people", but so are all of the rest of us. If that petition for summary judgement removing Wyndham as a separate entity (apart from their existing ownership) with liability succeeds, then the prospect of the whole owners having access to anyone with deep pockets gets very small very quickly.
At the same time, the AOAO has moved forward to levy special assessements against each apartment. They chose to do this in three installments. Conveniently, this puts each invidual timeshare week owned under the $5K "action limit" that was previously reported by one of the two Boards, even if they choose to pay
neither this year's fees
nor the special assessment.
By contrast, the whole owners will be well above that number---and will have to come up with low-six-figures or be subject to a lein, and eventually foreclosure. That's a long row to hoe, but if that's what the AOAO has to do, it seems like they'll be wiling to do it.
So, it seems to me that the defendants are moving as many levers as they can to get us closer to the ultimate end game for the resort, which is to partition it from the condo site plan and sell it at forced auction.
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I will be the first to admit that I'm biased and have a stake in the outcome, because I currently own a couple of weeks here. But, I've read the engineering report describing the problems with the buildings and the remediation plan, and as far as I can tell most (if not all) of the problems are structural. They are due either to failures during construction, or design elements that maybe were not the wisest choices in an oceanfront environment. For example, maybe using steel pre-tensioned concrete in a corrosive coastal marine environment wasn't the smartest idea. In contrast, few if any of the problems seem to be due to negligent maintenance, and I definitely don't see the case for "only the oceanfront buildings were neglected" seeing as how all of them share most of the same problems.
So, I think the whole owners' claims, as presented, are probably more or less without merit. Why are they pressing? Because unless they can get a chunk of money via a Hail Mary lawsuit, they are well and truly f*****. They have an "asset" that two years ago was worth mid-six figures, and now is worth
significnatly less than that---namely, whatever we end up getting at auction. Given Kauai County's stance on development, particularly outside of established tourism zones, that's probably not very much. At all.
How many of you could lose half a million dollars overnight without losing much sleep? If you were facing such a loss, how far would you go to try to get some of it back, even if it wasn't very likely to succeed?
That's where we are.