Wyndham is closing a handful of legacy resorts - dedicated chart/tracker located in the first post for this unfolding set of events

[pedro47]

Is Wyndham in financial trouble ? Do they owe a large amount of dollars to a hedge company?

 

[Jan M.]

Yeah, it will be interesting to see what they do. 184 units (the exact number of units in bldgs 20,21,23 and 25) of a total of 451 units at Star Island (as I calculate based on my prior post) are under this bankruptcy.

Edited: Prior post is https://tugbbs.com/forums/threads/w...s-unfolding-set-of-events.375888/post-3209912

If my math is correct that means 40.8% of the units at Star Island are Wyndham units. Since some people do have units in other buildings hopefully you'll all keep us updated about what happens with those soon to be no longer Wyndham units and how this impacts the resort.

You and regatta333 are different situation than the owners in the Wyndham buildings. Not sure if any of the other resorts also have owners in your situation. Hopefully someone in Wyndham will explain to you whether or not you'll still have Wyndham points. My initial thought was you would've made a Fairfield or Wyndham purchase to convert your week so why wouldn't you still have your Wyndham points? However, Wyndham might not see it that way. This is uncharted territory so who knows!

 

[jp10558]

Which is why the bankruptcy approach is being used - it bypasses these types of concerns/issues for the most part.

It seems to me that this is quite the end run around normal property law and the CC&Rs or declarations or whatever contracts there were that everyone else was operating under. I'm not a lawyer either so this is my opinion only. The HOA, not in financial distress, is declaring Chapter 11 to effectively force like a partition action without doing that actually in court, such that they can force a group of property owners to sell. This makes me glad that I continue to avoid ever ever ever living in an HOA. To a layperson, the HOA is kinda like a private town or something - yet I would be astonished if a town going bankrupt could force all people living in that town to sell their properties to make up for that. But this is even less like that in that the HOAs aren't insolvent, and at least one says they're financially strong.

I'm sure one reason each one will be somewhat unique is that I feel like at least some jurisdictions and judges will look at this and flatly say - the HOA isn't insolvent and this is just trying to avoid the rules that are in the documents.

AI at least thinks that Timeshare HOAs in the US are basically the same as any other HOA, just over a different sort of property ownership. Maybe this is wrong, but like @dioxide45 says, I can't find any indication of that, and any differences seem like they have to be contractual. Looking at generic HOA bankruptcy, it is possible, but in no place have I found any claim that the HOA can directly force a sale of any property that it just manages, only properties that it owns. What they could do is levy special assessments to become solvent again. However, it seems like most of the letters we've seen so far don't mention immediate financial distress, just that there would be assessments for capital improvements.

Now, it's all well and good to say "well, we know if we levy the special assessment 'everyone will default' and then we will be insolvent" but it still seems to me like that would have to actually happen, not just a future prediction. On the other hand, if Wyndham owns enough of the property to pass the votes to sell, then I'm still at why not just do that.

I guess I just keep coming back to - why would a court want to intervene here when there's existing systems in place to deal with these eventualities - that it seems like Wyndham is mostly following anyway. I suppose according to this:

https://www.reuters.com/legal/litigation/debtors-without-cause-whether-non-distressed-entities-can-access-bankruptcy-2024-07-09/#:~:text=Financial%20distress%3A,109%20of

It's split, so the locations of the HOAs will make a huge difference - if anyone bothers to challenge them. And this brings me to what I think is happening - Wyndham is actually betting that no one will care enough to challenge this so whether it's legal or not doesn't make that much difference. But I would keep it in mind that maybe the CC&Rs or declarations might be a lot less binding than we thought, at least if you get enough pull on the HOA.

 

[comicbookman]

It seems to me that this is quite the end run around normal property law and the CC&Rs or declarations or whatever contracts there were that everyone else was operating under. I'm not a lawyer either so this is my opinion only. The HOA, not in financial distress, is declaring Chapter 11 to effectively force like a partition action without doing that actually in court, such that they can force a group of property owners to sell. This makes me glad that I continue to avoid ever ever ever living in an HOA. To a layperson, the HOA is kinda like a private town or something - yet I would be astonished if a town going bankrupt could force all people living in that town to sell their properties to make up for that. But this is even less like that in that the HOAs aren't insolvent, and at least one says they're financially strong.

I'm sure one reason each one will be somewhat unique is that I feel like at least some jurisdictions and judges will look at this and flatly say - the HOA isn't insolvent and this is just trying to avoid the rules that are in the documents.

AI at least thinks that Timeshare HOAs in the US are basically the same as any other HOA, just over a different sort of property ownership. Maybe this is wrong, but like @dioxide45 says, I can't find any indication of that, and any differences seem like they have to be contractual. Looking at generic HOA bankruptcy, it is possible, but in no place have I found any claim that the HOA can directly force a sale of any property that it just manages, only properties that it owns. What they could do is levy special assessments to become solvent again. However, it seems like most of the letters we've seen so far don't mention immediate financial distress, just that there would be assessments for capital improvements.

Now, it's all well and good to say "well, we know if we levy the special assessment 'everyone will default' and then we will be insolvent" but it still seems to me like that would have to actually happen, not just a future prediction. On the other hand, if Wyndham owns enough of the property to pass the votes to sell, then I'm still at why not just do that.

I guess I just keep coming back to - why would a court want to intervene here when there's existing systems in place to deal with these eventualities - that it seems like Wyndham is mostly following anyway. I suppose according to this:

https://www.reuters.com/legal/litigation/debtors-without-cause-whether-non-distressed-entities-can-access-bankruptcy-2024-07-09/#:~:text=Financial%20distress%3A,109%20of

It's split, so the locations of the HOAs will make a huge difference - if anyone bothers to challenge them. And this brings me to what I think is happening - Wyndham is actually betting that no one will care enough to challenge this so whether it's legal or not doesn't make that much difference. But I would keep it in mind that maybe the CC&Rs or declarations might be a lot less binding than we thought, at least if you get enough pull on the HOA.

The main difference between a normal HOA and a time share HOA is the HOA facilitates the sharing of units. Without a functioning HOA that sharing is virtually impossible. So, the HOA's are mentioned in the deed and are a condition of ownership (oversimplification but basically correct). That is how you get to forced deed sales. That is what AI misses.

 

[Greg G]

If my math is correct that means 40.8% of the units at Star Island are Wyndham units. Since some people do have units in other buildings hopefully you'll all keep us updated about what happens with those soon to be no longer Wyndham units and how this impacts the resort.

You and regatta333 are different situation than the owners in the Wyndham buildings. Not sure if any of the other resorts also have owners in your situation. Hopefully someone in Wyndham will explain to you whether or not you'll still have Wyndham points. My initial thought was you would've made a Fairfield or Wyndham purchase to convert your week so why wouldn't you still have your Wyndham points? However, Wyndham might not see it that way. This is uncharted territory so who knows!

Now that I look at it again possibly three of those 3 story units may contain more than 11 units each so probably more than 451 units (hard to tell from the google maps 3D view). I might ask the owners services for the exact number, but yes, at most 40% (and probably less) are involved in the bankruptcy.

 

[Greg G]

You and regatta333 are different situation than the owners in the Wyndham buildings. Not sure if any of the other resorts also have owners in your situation. Hopefully someone in Wyndham will explain to you whether or not you'll still have Wyndham points. My initial thought was you would've made a Fairfield or Wyndham purchase to convert your week so why wouldn't you still have your Wyndham points? However, Wyndham might not see it that way. This is uncharted territory so who knows!

Just to be clear. I own a fixed week at Star Island not associated with Wyndham in any manner. regatta333 appears to own a week associated with Wyndham but not part of the bankruptcy.