A meeting was held on August 2nd in New York City for owners of The Manhattan Club. Here, Jeff Weir provides a recap of this meeting.
We'll post updates as they become available.
If you attended, we'd like to hear from you.
If there's another topic that you feel warrants a meeting, let us know as well.
Manhattan
Club owners rally in New York, seeking understanding of legal strategies and
the AGs investigation
Some 120 timeshare
owners at The Manhattan Club (TMC)—representing an estimated 14,000 to 18,000
frustrated buyers rallied in New York on Aug. 2, 2015, to discuss legal
strategies and the practical problems of escalating maintenance fees,
reservation hassles, and resale roadblocks. The meeting, hosted by RedWeek.com,
the National Timeshare Owners Association, and TimeSharing Today, was
the first focused "take-action" meeting among Manhattan Club owners
who are stuck in legal limbo while New York Attorney General Eric Schneiderman
battles TMC developer Ian Bruce Eichner over the fate of the club and its
owners, most of whom paid $20,000 to $40,000—or more for timeshares they can
rarely, if ever, use.
The gathering
included presentations from a New York attorney, Douglas Wasser, who is very
familiar with the AG's investigation, real-estate law, and similar litigation;
and Bob Schmidt, chief data officer for Sharket.com, a timeshare resale
research company based in Florida.
Wasser informed
owners about the legal issues in the AG's case, while Schmidt discussed the
market values of TMC timeshares, based on resale and developer sales from
2012-2015
Highlights and
consensus opinions released at the TMC owners meeting include:
• Future legal
actions: Launching a new legal case against the club, at this stage, would
probably serve no purpose, because the AG already has a year's worth of
investigative data. Wasser urged owners to show patience and evaluate their
options after the AG's case comes to a head. Three previous class-action
cases already were thrown out of court. In its most recent court filing,
the AG's office said, "Nearly every week the NYAG discovers new evidence
of potential wrongdoing."
• Maintenance-fee
issues: Owners who want to continue using their timeshares must continue paying
maintenance fees, even if they don't like the cost ($2,500 to $3,000 a year).
Many other owners have already opted out, refusing to pay due to frustration or
financial considerations. According to the AG's office, 2,265 contracts
were inactive or delinquent as of March, 2015. The club has 14,147 active
contracts. Those active payers must shoulder the costs of the inactive
timeshares.
• Sharket's survey of
TMC resales shows that Manhattan Club sales and prices plummeted in recent
years—no surprise, given all of the negative publicity about the club.
From 2012-2015, Sharket traced 144 resales with an average selling price of
$2,148. Only nine resales have been recorded in New York property records
in 2015 (when the club itself was barred from transferring, selling, or
foreclosing on property).
• Also during
2012-2015, the Manhattan Club took back 1,554 timeshares through buybacks or
foreclosures, paying an average price of $133 per unit. Developer retail
sales, in contrast, stayed strong until the AG closed down the sales
operation. From 2012 to July of 2014, the club notched 1,521 sales worth
$86 million, with an average selling price of $21,000. Many owners noted
the striking similarity of the buyback/foreclosure numbers and the developer
sales. Overall, dating back to the inception of the club in 1997, TMC
claims to have sold $400 million worth of timeshares.
• A key allegation in
the AG's probe is that the club deliberately oversold timeshares and rented
rooms to the public while denying consistent access to owners. Proving
that, however, is a major paper chase that continues to generate heated debate
in court. In its most recent court filing, the AG says: "NYAG
has sought and still seeks to determine not only whether Sponsor (Eichner and
his operating companies) had oversold any units in the timeshare plan, at any
time, but also whether anyone at The Manhattan Club was keeping accurate
records as to the inventory that Sponsor has sold, has yet to sell, and has
bought back and re-sold."
The next court date
was set for Aug. 21, but could easily be postponed. No formal or public
hearings in the case have been held since the original 2014 court order.
TimeSharing Today will continue to follow the
situation as events unfold.
Jeff
Weir is Chief Correspondent for Redweek and a contributor TimeSharing Today.
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