Timber Lodge BOD election - MVW trying to stack board with employees

[WBP]

How about the longstanding history of MVC, as evidence? Sue, you of all people claiming naivete is hard to digest. As if you do not know that MVC's long standing strategy for these resorts is to pack the board with MVC aligned people who are often MVC employees, to do their bidding. When they can't they threaten "brand quality" as a bludgeon.

I seem to think that MVC's decline corresponds with MVC’s spinoff from Marriott International. It seems that the little “business integrity” that Marriott International may have once demanded of MVCI, and JW Marriott, Jr’s “core values,” are long gone.

I am absolutely flabbergasted by Jason King’s bio. Talk about grandiosity.

 

[Dean]

The governing documents are key. Also, it appears that MVW in its role as the developer typically keeps at least one ownership interest so that it can run for the board as an owner. The salient issue is this: Regardless of how any director comes to any board of directors, each has a fiduciary duty to avoid self-dealing. This is virtually impossible for those who are employees of the managing agent. If you are both an owner and a vendor, the smart thing to do is recuse yourself from any decision involving both parties due to a conflict of interest; however, the decision to recuse is up to the director themself (barring any overriding specific provision in the governing documents).

Every member of the BOD will have different knowledge, experience and AGENDA. Some will cheap out to save yearly fees and some will go overboard the other way. Having different agendas can be a good thing. Given the setup, MVC is somewhat more than just the manager of the property, they are also looking at a bigger picture and they should. If owners don't trust them to do that then they should push to become independent and go with a management company that will have that focus. I do agree with the trust but verify approach though.

 

[rcdcowner557]

What do you think the agenda is of a board member who does not pay MF out of their own pocket while being paid by the property's largest vendor when there is a legal dispute between the board and said vendor? Should such board member listen to the board's outside counsel or should such board member follow conflicting direction of the vendor who is paying them? Note this is a rhetorical question to highlight why board members who face a conflict of interest in any transaction lose the benefit of the "business judgment rule."

 

[SueDonJ]

How about the longstanding history of MVC, as evidence? Sue, you of all people claiming naivete is hard to digest. As if you do not know that MVC's long standing strategy for these resorts is to pack the board with MVC aligned people who are often MVC employees, to do their bidding. When they can't they threaten "brand quality" as a bludgeon.

No, I don't remember a "long standing strategy" of Marriott backing employees for electable seats on resort BOD's. Seriously, I don't. I do know that Marriott is *entitled* to seats on every board (that I'm aware of) by virtue of the governing docs but they're not elected members - they're placed into those seats at only Marriott's discretion/direction and there's nothing that the ownership can do about that unless it can be proven that the people who are put in those seats act against the governing docs. And if theres'a successful challenge in a case like that, Marriott still holds the rights to that seat and who ends up in it.

I do agree that if Marriott employees gain electable seats on any of the resort boards it increases the advantage that Marriott already holds. I have absolutely zero argument with that thought. But I don't think it should be alleged without proof. If someone claims that a Marriott employee is running for an electable seat on a resort BOD, then the least info they can provide is what position that candidate holds in the company.

 

[Dean]

What do you think the agenda is of a board member who does not pay MF out of their own pocket while being paid by the property's largest vendor when there is a legal dispute between the board and said vendor? Should such board member listen to the board's outside counsel or should such board member follow conflicting direction of the vendor who is paying them? Note this is a rhetorical question to highlight why board members who face a conflict of interest in any transaction lose the benefit of the "business judgment rule."

I do think MVC as an owner has every right to have BOD representation and to act in the best interest of the owners including MVC as an owner and this will be a bigger picture view than many of the BOD will have. Obviously there can be a fine line in this regard. I would suggest that every Board member has some conflict of interest or the other. Still, one needs a certain amount of trust in the BOD and management in general and if that is not there they should make preparations to move on.

 

[rcdcowner557]

No, I don't remember a "long standing strategy" of Marriott backing employees for electable seats on resort BOD's. Seriously, I don't. I do know that Marriott is *entitled* to seats on every board (that I'm aware of) by virtue of the governing docs but they're not elected members - they're placed into those seats at only Marriott's discretion/direction and there's nothing that the ownership can do about that unless it can be proven that the people who are put in those seats act against the governing docs.

I do agree that if Marriott employees gain electable seats on any of the resort boards it increases the advantage that Marriott already holds. I have absolutely zero argument with that thought. But I don't think it should be alleged without proof.

All governing docs are different. Governing docs at our building do not entitle them to a seat. The extent to which a developer can retain control of any building is an issue to which I pay great attention when reviewing governing docs of a potential purchase.

 

[rcdcowner557]

I do think MVC as an owner has every right to have BOD representation and to act in the best interest of the owners including MVC as an owner and this will be a bigger picture view than many of the BOD will have. Obviously there can be a fine line in this regard. I would suggest that every Board member has some conflict of interest or the other. Still, one needs a certain amount of trust in the BOD and management in general and if that is not there they should make preparations to move on.

No, every BOD member does not have a conflict of interest in the eyes of the law. There are actually bright legal lines here. Note that having a conflict of interest does not preclude a director's voting on a transaction in which they have conflicting interests; they just need to be prepared to have that transaction scrutinized by a third party for fairness/commercial reasonableness. Those MVW employee board members who argue brand standards do so at their own peril given the fluidity of the alleged standards, which standards most definitively go by the wayside when MVW is cornered.

 

[SueDonJ]

All governing docs are different. Governing docs at our building do not entitle them to a seat. The extent to which a developer can retain control of any building is an issue to which I pay great attention when reviewing governing docs of a potential purchase.

At the resorts of which I'm aware, the Marriott-installed BOD members are there to protect Marriott's interests. That makes sense to me because Marriott still owns interests in those resorts. At the resorts which still had Weeks on Marriott's books at the Abound (then, Destination Club) inception, we still don't know if all of the unsold/Marriott-held Weeks have been conveyed to the Abound Trust.

If Timber Lodge is different and Marriott-entitled BOD seats don't exist, how else would Marriott's continuing ownership interests be protected other than an employee running for a seat? At least that way there's an opportunity for owners to not elect them.

 

[rcdcowner557]

At the resorts of which I'm aware, the Marriott-installed BOD members are there to protect Marriott's interests. That makes sense to me because Marriott still owns interests in those resorts. At the resorts which still had Weeks on Marriott's books at the Abound (then, Destination Club) inception, we still don't know if all of the unsold/Marriott-held Weeks have been conveyed to the Abound Trust.

If Timber Lodge is different and Marriott-entitled BOD seats don't exist, how else would Marriott's continuing ownership interests be protected other than an employee running for a seat? At least that way there's an opportunity for owners to not elect them.

Any owner who is also a vendor does not get a free pass to vote in the vendor's interest as a board member - end of story. In many instances the vendor's interests and the owners' interests will be aligned so there will be no issue; however, there will be many instances where the interests are not aligned. All board members have a fiduciary duty to avoid self-dealing.

 

[SueDonJ]

Any owner who is also a vendor does not get a free pass to vote in the vendor's interest as a board member - end of story. In many instances the vendor's interests and the owners' interests will be aligned so there will be no issue; however, there will be many instances where the interests are not aligned. All board members have a fiduciary duty to avoid self-dealing.

But you didn't answer my question - if Marriott's not entitled to seats on a resort BOD but continues to own interests in the resort, how else can they protect those interests other than being on equal footing with every other owner who can choose to run for a seat to protect his/her owned interests?

I'll also note here in response to your other posts - if a BOD candidate for my resorts runs on a platform of not supporting Marriott's "brand standard," that person doesn't get my vote. I bought Marriott specifically because it's Marriott, and the brand standard is supposed to be upheld by virtue of both the Timesharing Declaration and Management Agreement governing docs. It's likely a minority opinion on TUG, but I do generally want Marriott's interests to be protected because I primarily align with them more than any candidate who finds fault with everything they do. That's okay by me - I'm not at all claiming that everyone needs to agree with me.

 

[rcdcowner557]

But you didn't answer my question - if Marriott's not entitled to seats on a resort BOD but continues to own interests in the resort, how else can they protect those interests other than being on equal footing with every other owner who can choose to run for a seat to protect his/her owned interests?

I'll also note here in response to your other posts - if a BOD candidate for my resorts runs on a platform of not supporting Marriott's "brand standard," that person doesn't get my vote. I bought Marriott specifically because it's Marriott, and the brand standard is supposed to be upheld by virtue of both the Timesharing Declaration and Management Agreement governing docs. It's likely a minority opinion on TUG, but I do generally want Marriott's interests to be protected because I primarily align with them more than any candidate who finds fault with everything they do. That's okay by me - I'm not at all claiming that everyone needs to agree with me.

You want Marriott's interests to be protected until they start charging you a price higher than the value they are delivering and you find you have no ability to do anything about it because they have quietly taken back total control through ROFRs and foreclosures. You actually would be able to do something about it, but I suspect you wouldn't know where to begin or what questions to ask. I am glad you are not in that situation, but that is almost certainly the future of your property. Remember this thread when it happens to you.

 

[rcdcowner557]

P.S. As for your question, if you don't understand the concept of self-dealing, maybe just google it? I find myself at loss as to how to explain it beyond what I have already laid out.

 

[SueDonJ]

You want Marriott's interests to be protected until they start charging you a price higher than the value they are delivering and you find you have no ability to do anything about it because they have quietly taken back total control through ROFRs and foreclosures. You actually would be able to do something about it, but I suspect you wouldn't know where to begin or what questions to ask. I am glad you are not in that situation, but that is almost certainly the future of your property. Remember this thread when it happens to you.

P.S. As for your question, if you don't understand the concept of self-dealing, maybe just google it? I find myself at loss as to how to explain it beyond what I have already laid out.

Well golly, thank you so much for teaching me about google - without your highly intelligent contribution I'd never have known where to look for answers!

You're on TUG. We're on TUG. TUG is the premier timeshare information BBS on the interwebs (or whatever you smart people call it ) and it's loaded with timeshare-savvy people who have been here for years, understand how their ownerships work, are willing to engage with people who need help without being all prissy about it, and, will help me when I ask questions because I help when they ask. This is where I'll come with my questions if/when I'm ever disillusioned with the timeshares I chose to buy despite knowing the pitfalls, and this is where I'll choose to ignore the people who only want to score points instead of engaging in civil discussion.

 

[rcdcowner557]

I

Well golly, thank you so much for teaching me about google - without your highly intelligent contribution I'd never have known where to look for answers!

You're on TUG. We're on TUG. TUG is the premier timeshare information BBS on the interwebs (or whatever you smart people call it ) and it's loaded with timeshare-savvy people who have been here for years, understand how their ownerships work, are willing to engage with people who need help without being all prissy about it, and, will help me when I ask questions because I help when they ask. This is where I'll come with my questions if/when I'm ever disillusioned with the timeshares I chose to buy despite knowing the pitfalls, and this is where I'll choose to ignore the people who only want to score points instead of engaging in civil discussion.

I apologize. I did not mean to offend you and appreciate your contribution to both this discussion and TUG in general. I do not mean this as an excuse, but it has been brought to my attention before that I might not interact with others according to generally socially acceptable norms. I am working on it. Again, my intent was not to offend, though I clearly did. I will ask my better half to review the dialogue and do his best to explain to me where I went wrong, which I am sure I did.

 

[Dean]

No, every BOD member does not have a conflict of interest in the eyes of the law. There are actually bright legal lines here. Note that having a conflict of interest does not preclude a director's voting on a transaction in which they have conflicting interests; they just need to be prepared to have that transaction scrutinized by a third party for fairness/commercial reasonableness. Those MVW employee board members who argue brand standards do so at their own peril given the fluidity of the alleged standards, which standards most definitively go by the wayside when MVW is cornered.

I stand by the position that every member of the BOD will have a conflict of interest at one time or another but I would concede that there is the potential for a magnitude of scale difference here though I do not agree it is automatic or guaranteed. I also don't believe that the best interest of MVC and the resort is all that much different. I also believe that having a BOD with members who have a different focus is a good thing. Still if one is that distrustful of their management company who is also an owner, why not move on when the contract is up or if not, why continue to be an owner there.

 

[rcdcowner557]

I stand by the position that every member of the BOD will have a conflict of interest at one time or another but I would concede that there is the potential for a magnitude of scale difference here though I do not agree it is automatic or guaranteed. I also don't believe that the best interest of MVC and the resort is all that much different. I also believe that having a BOD with members who have a different focus is a good thing. Still if one is that distrustful of their management company who is also an owner, why not move on when the contract is up or if not, why continue to be an owner there.

We were in the process of moving to a different management company until MVW stacked our board with the MVC Trust's dominant ownership position. Litigation is in process. In terms of continuing to be an owner, there is zero resale value because the maintenance fees are now higher than accommodations one can purchase on the open market without being an owner. Why own at a cost of $8000 per week when you can rent exactly the same thing (or better even these days) at $5000 per week? Good for you if you are not in that situation. Better for MVW if you are and don't even realize it.

 

[wuv pooh]

I stand by the position that every member of the BOD will have a conflict of interest at one time or another but I would concede that there is the potential for a magnitude of scale difference here though I do not agree it is automatic or guaranteed. I also don't believe that the best interest of MVC and the resort is all that much different. I also believe that having a BOD with members who have a different focus is a good thing. Still if one is that distrustful of their management company who is also an owner, why not move on when the contract is up or if not, why continue to be an owner there.

Exactly. The average owner has 1/50 interest of 1 unit in one building. For discussion sake an extra 5% on a $2,000 MF is worth $100. I make more than that an hour. I assume that is why evil Marriott pays a stipend, so that the board actually has people on it who will serve. The board is required to exist for the resort to function. My condo HOA of several hundred units struggles to get 60 owners to vote, and they have much more at risk. What rational person would waste their time with all the board BS to "protect" a potential $100? I just want to go on vacation. It is ego driven people, like most HOAs, retirees with a hobby, etc. The developer fills a need and protects everyone's interest, including their own.

My guess is that the average owner, trying to reserve a reservation, would be much more concerned with the conflict of interest of "OP is a major broker of points and units at this resort" than of any supposed malfeasance of Marriott provided board members.

 

[TimGolobic]

My guess is that the average owner, trying to reserve a reservation, would be much more concerned with the conflict of interest of "OP is a major broker of points and units at this resort" than of any supposed malfeasance of Marriott provided board members.

Except that GRC owners are not "average" owners. The quarter-share nature of the property and correspondingly higher dues necessitate some level of rental income to maintain ownership levels and not have 100 or more units dumped on the resale market rendering all units worthless. Those points and units that I broker do come from a human owner on the other end who has to pay the bills; I don't magically make the inventory out of thin air. And I have resisted calls to serve on the board to avoid any perceived conflict of interest, also due to the fact I respect the incredibly hard work that those already in place do as VOLUNTEERS and not paid a stipend, which Im sure is more than just a little meal money. I can't imagine "james bond" willingly serving on multiple boards (essentially a full time job) for a "stipend" of a few thousand dollars, just to be a good guy for MVW's benefit. If there is no problem with a Marriott-provided board member (beyond their guaranteed seat), then full transparent disclosure on the financial nature of that relationship shouldn't be such a huge secret that they even deny its existence.

 

[wuv pooh]

Except that GRC owners are not "average" owners. The quarter-share nature of the property and correspondingly higher dues necessitate some level of rental income to maintain ownership levels and not have 100 or more units dumped on the resale market rendering all units worthless. Those points and units that I broker do come from a human owner on the other end who has to pay the bills; I don't magically make the inventory out of thin air. And I have resisted calls to serve on the board to avoid any perceived conflict of interest, also due to the fact I respect the incredibly hard work that those already in place do as VOLUNTEERS and not paid a stipend, which Im sure is more than just a little meal money. I can't imagine "james bond" willingly serving on multiple boards (essentially a full time job) for a "stipend" of a few thousand dollars, just to be a good guy for MVW's benefit. If there is no problem with a Marriott-provided board member (beyond their guaranteed seat), then full transparent disclosure on the financial nature of that relationship shouldn't be such a huge secret that they even deny its existence.

Thought the beef was with Timber Lodge? We have discussed GRC ad naseum, so can search if interested.

 

[rcdcowner557]

Except that GRC owners are not "average" owners. The quarter-share nature of the property and correspondingly higher dues necessitate some level of rental income to maintain ownership levels and not have 100 or more units dumped on the resale market rendering all units worthless. Those points and units that I broker do come from a human owner on the other end who has to pay the bills; I don't magically make the inventory out of thin air. And I have resisted calls to serve on the board to avoid any perceived conflict of interest, also due to the fact I respect the incredibly hard work that those already in place do as VOLUNTEERS and not paid a stipend, which Im sure is more than just a little meal money. I can't imagine "james bond" willingly serving on multiple boards (essentially a full time job) for a "stipend" of a few thousand dollars, just to be a good guy for MVW's benefit. If there is no problem with a Marriott-provided board member (beyond their guaranteed seat), then full transparent disclosure on the financial nature of that relationship shouldn't be such a huge secret that they even deny its existence.

Exactly - Paying an average Joe an undisclosed stipend to sit on boards around the country in an attempt to pretend that average Joe is "independent" is deceptive at best. And then when the guy feigns ignorance about what is going on at other properties that distinctly parallels what is happening at our property (that he is making happen at our property), all doubt is removed that he is not acting in good faith for the benefit of the owners, but rather is sitting on the board with a glaring conflict of interest. The gentleman was placed on the ballot by MVW at multiple properties to displace true owners at those properties. This is not a situation where the developer is running unopposed. When they force this guy onto your board, it will be because the board has caught on to the wrongdoing. They have a play book that they have run at multiple properties; it is about to catch up with them in a big way.

 

[rcdcowner557]

Exactly. The average owner has 1/50 interest of 1 unit in one building. For discussion sake an extra 5% on a $2,000 MF is worth $100. I make more than that an hour. I assume that is why evil Marriott pays a stipend, so that the board actually has people on it who will serve. The board is required to exist for the resort to function. My condo HOA of several hundred units struggles to get 60 owners to vote, and they have much more at risk. What rational person would waste their time with all the board BS to "protect" a potential $100? I just want to go on vacation. It is ego driven people, like most HOAs, retirees with a hobby, etc. The developer fills a need and protects everyone's interest, including their own.

My guess is that the average owner, trying to reserve a reservation, would be much more concerned with the conflict of interest of "OP is a major broker of points and units at this resort" than of any supposed malfeasance of Marriott provided board members.

And they don't pay a stipend to all board members; just the two average joe's they send around the country to masquerade as "independent" board members who they try to pretend are not employees of MVW.

 

[TimGolobic]

Thought the beef was with Timber Lodge? We have discussed GRC ad naseum, so can search if interested.

Agreed, but you're the one who brought my apparent conflict of interest in to the discussion as "a major broker of points and units at this resort". My activities are at GRC, not Timber Lodge. Though GRC has recently experienced this "independent" person being elected to our board.

 

[wuv pooh]

Agreed, but you're the one who brought my apparent conflict of interest in to the discussion as "a major broker of points and units at this resort". My activities are at GRC, not Timber Lodge. Though GRC has recently experienced this "independent" person being elected to our board.

My bad. I assumed the comment was related to the topic.

 

[rcdcowner557]

It is interesting when I run through the properties where they are encountering pushback from the legacy owners - they are the higher end properties where the initial buy in and MF are not average by any means. That is perhaps what is so offensive about having this guy come in as if he earned his way into the room. Imagine somebody comes into your house as if they own it with an arrogance and on a power trip when they have nothing at stake and have no idea what they are talking about and are not of the same caliber professionally or financially as those who have not only their own money on the line, but more importantly, control over their home. The properties where legacy owners are pushing back are properties that were never intended to be timeshares per their governing documents.

 

[rcdcowner557]

My bad. I assumed the comment was related to the topic.

Back to the topic of Timber Lodge, the fact they are running an MVW employee for an elected seat against legacy owners is a red flag. Legacy owners at Timber Lodge must be on to them. I don't know what the ownership composition is at Timber Lodge, but the play book is to put all the MVC Trust votes behind the MVW employee and hope that the bulk of the legacy owners are too apathetic to vote. The Trust can take over the board at such properties where it has a sizeable but not dominant ownership interest fairly easily due to owner apathy along the lines that wuv pooh describes.