New Thread: KBV Vote for Chapter 11 Bankruptcy

[DeniseM]

Here's my question: Why did they collect a SA at all, while at the same time they were trashing the buildings that they were supposedly repairing? It makes no sense, unless they never intended to repair them.

 

[dioxide45]

Here's my question: Why did they collect a SA at all, while at the same time they were trashing the buildings that they were supposedly repairing? It makes no sense, unless they never intended to repair them.

They did similar things at other resorts Wyndham is exiting. Not necessarily a SA, but big room renovations and such. At least in this case, the money is still there. For the other properties, if they sell the property some of that value will come back to owners in residual payout. If the property carries on as timeshare, then the room renovations are there for owners to still enjoy. As for KBC, at least they haven't sunk the money into something that isn't going to add value to the owners. I suspect it is sitting in the bank?

 

[DeniseM]

KBV = Kauai Beach Villas. We'll see how much money owners come out with - I'm not holding my breath.

 

[bnoble]

I have not seen it in person; my ex and son were there last week, and gave me a first-hand account. And it is not great, but it is also very likely intended to starve out the whole owners to get them to capitulate in the lawsuit. Which, fine, whatever. And that suit is scheduled for trial before the bankruptcy action is to take place, so hopefully by then we will have reached a conclusion.

But the real problem is that the buildings were poorly constructed in the first place. From where I sit, everhything else stems from that single (and very unfortunate) fact. I'm not Wyndham's biggest fan, but I'm also not going to assume they are pulling shenanigans from the get. Others might, and that's their prerogative.

 

[bnoble]

if passed, this measure does not authorize the AOAO to take individual timeshare intervals. I guess in theory, it could take whole units from the IOA if the IOA owned all intervals in a particular apartment.

I'm not sure this is true. The ballot language of the second proposal, in full and emphasis added, states: "Authorize the Board of Directors of AOAO KBV to acuqire or accept a unit or interval prior to bankruptcy filing by the AOAO KBV." That's interval, singular, which suggests to me that they do not need to collect all of the intervals of an apartment (aka unit).

In the attachment, it further states that the Authorized Persons would be empowered to "acqui[re] or accept[] ... one or more units or intervals". Again, if i am parsing that correctly, it doesn't seem to require an entire unit/apartment.

IANAL so YMMV.

 

[bnoble]

Here's my question: Why did they collect a SA at all, while at the same time they were trashing the buildings that they were supposedly repairing? It makes no sense, unless they never intended to repair them.

I think there are two plausible answers to this.

First, they do have a fiduciary duty to the owners--including the owners of those two buildings. If the buildings were uninhabitable, they are obligated to try to restore them to occupancy while the condominium plan still exists.

Second, it served as an expedient way to demonstrate that the prospects of obtaining the entire remediation sum were, at best, remote. Indeed, that's one of the reasons that PRI gives for their request for this vote. Namely, in Enclusure #1, they state that the sale is timely because (a) it's unrealistic to expect they will raise the $67M needed and (b) the much smaller special assessment has significant delinquencies.

I'm not saying those are the reasons. I am not privvy to the Board's deliberations. But I think they are plausible. And, if we are going to come up with plausible reasons why they are trying to screw us, it seems fair to come up with plausible reasons why they are not.

 

[T_R_Oglodyte]

But I think they are plausible. And, if we are going to come up with plausible reasons why they are trying to screw us, it seems fair to come up with plausible reasons why they are not.

Brings to mind the precept that one should never attribute to design that which can be as easily explained by ineptitude

 

[tango]

Also, in case it was missed, they were beginning to repair buildings G and H, however, with the initial work even more damage has been discovered, leading to the estimation that maybe double the initial small assessment sum would be needed to bring G and H to code. What has not been revealed is the results of the latest findings of the engineering firm (Janney) to update the building damage and the new cost estimate for the repair. It could be this development that has prompted the bankruptcy plans.

 

[bnoble]

they were beginning to repair buildings G and H

My son mentioned that he saw crews working last week.

 

[DeniseM]

My son mentioned that he saw crews working last week.

Working on Bldg. G & H? They have been doing normal maintenance on the other buildings, but not G & H. I will be on Kauai this fall and I will post some pictures.

 

[tbongoll]

Just received my Ballot for the September 19th special AOAO KBV on whether to authorize them to file Chapter 11. I'm voting to file for bankruptcy. I read through these threads and the documentation they sent. To me, that is the only way my husband and I can get out of ownership near to mid term.

 

[bnoble]

Working on Bldg. G & H?

Yes, if I understood him correctly, there were crews in some of the G & H units (they were staying in F).

 

[DeniseM]

How strange!

 

[CO skier]

Personally, I'm thrilled to see Wyndham gone, and hopefully, it will speed up the closure and final resolution of the mess they made at KBV.

The closure timing is entirely dependent on how long the whole owners choose to pursue their lawsuit, just as it has been for the past 3 years. After 12/31/2025 it will be clear Wyndham had and has nothing to do with any delay to a "final resolution."

 

[bnoble]

I will double check. I may have gotten it wrong.

 

[skcamerabuff]

Wouldn't any SA they collected be in a bank account? It isn't like Wyndham could just take that money (other than perhaps a management fee). If the resort is to close, any remaining funds would be paid out as part of the distribution to remaining owners.

I owned there for nearly 20 years. I am looking forward to no maintenance fees. I do not care if I get anything from the bankruptcy. I am happy that it is coming to a close. I enjoyed nearly a month on Kauai each year. Now I choose how I spend my $$$$. Someone will get a fire sale out of the property. My vote has been sent in to proceed with the bankruptcy. I will not be paying maintenance fees for 2026.

 

[skcamerabuff]

Just received my Ballot for the September 19th special AOAO KBV on whether to authorize them to file Chapter 11. I'm voting to file for bankruptcy. I read through these threads and the documentation they sent. To me, that is the only way my husband and I can get out of ownership near to mid term.

I sent my ballot back to vote for the bankruptcy. We will be out of our maintenance fees finally. We enjoyed 20 years and originally purchased on the resale market. So just to be out is so good. No maintenance fees for 2026.

 

[skcamerabuff]

Also, in case it was missed, they were beginning to repair buildings G and H, however, with the initial work even more damage has been discovered, leading to the estimation that maybe double the initial small assessment sum would be needed to bring G and H to code. What has not been revealed is the results of the latest findings of the engineering firm (Janney) to update the building damage and the new cost estimate for the repair. It could be this development that has prompted the bankruptcy plans.

I am sure that no one was willing to put any more $$$ into the repairs. I voted for the bankruptcy. I believe that G & H will probably need demo to even considering any building repairs. I am so happy to sign the ballots for bankruptcy. We will be out from under a very big mess. We owned there for 20 years. Now we can enjoy other resorts on the island without the huge maintenance and SA fees.

 

[ecwinch]

I'm not sure this is true. The ballot language of the second proposal, in full and emphasis added, states: "Authorize the Board of Directors of AOAO KBV to acuqire or accept a unit or interval prior to bankruptcy filing by the AOAO KBV." That's interval, singular, which suggests to me that they do not need to collect all of the intervals of an apartment (aka unit).

In the attachment, it further states that the Authorized Persons would be empowered to "acqui[re] or accept[] ... one or more units or intervals". Again, if i am parsing that correctly, it doesn't seem to require an entire unit/apartment.

IANAL so YMMV.

Perhaps Wyndham wants to tender all their inventory to the AOAO, and make a similar offer to all owners to consolidate.

 

[dioxide45]

Do HOA owned intervals get a vote in any upcoming elections?

 

[bnoble]

Indirectly.

The resort has a two-level structure. The AOAO represents all units---the whole owners and the units that are part of the timeshare plan. The IOA represents the timeshare owners. In an AOAO election, each unit has one vote. The IOA Bylaws specify the means by which IOA units cast votes in AOAO elections.

The short version is: Each IOA member in good standing can cast a vote. If a majority of the owners of a unit vote in a certain way, then that's the vote for that unit. If they do not collect enough votes on either side of the issue to reach a majority of any particular unit's owners, then the IOA Board casts a vote for that unit in what it believes to be the best interests of the IOA as a whole.

Note that this is a majority of the owners in a unit, not a majoirty of votes received for that unit. The resort uses a float/float booking structure within unit sizes and view categoires (ocean view vs. general), but the deed for each interval is tied to a specific week in a specific unit, and that's the unit for which that owner casts a (partial) vote. So unless there is a very clear, lopsided majority, I suspect the IOA Board will end up casting most of the votes themselves. But, in this case, there probably will be such a majority--the unofficial word from the two abandoned partition votes was that there was a stark majority of IOA owners favoring partition and sale.

 

[rmarywendy1]

We just got ballots in the mail. The new vote is being taken on whether KBV should file for bankruptcy. If this motion passes, then the filing will take place and the resort will be sold. No maintanence fees or special assessments will be required when resort is sold certainly. All owners will get a piece of price paid by whoever then acquires the property.

 

[kbvownerexit]

question i have is should Interval Owners (IO) pay 2026 maintenance fees??

i've paid my yearly maintenance fees, i paid the stupid special assessment (that i'm sure was not used for the intended purpose and nor will it be returned) - so if they file bankruptcy in 2025 or even early in 2026 and it releases the IO from future maintenance and "special" assessment - do we pay the 2026 maintenance fees or wait for the closure ?

 

[bnoble]

We haven't even been billed for it---and we might not be. If we are, it might be a very different amount related to winding down the resort. Let's wait and see what happens.

 

[M & D]

We pay our maintenance fees and the paid the special assessment, and we would like to see an end to all of it. It has dragged on so long. If the bankruptcy happens and IF they can sell it, I am hoping this will also terminate our Wyndham connection completely. Over the years we have enjoyed many different Wyndham locations, (haven't been to Hawaii in several years now), but we are retired and no longer enjoy the increased maintenance fees every year on a fixed income. Do you think if someone would buy it, that they could have purchasing terms that would transfer our ownership's?