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My Timeshare just filed Chapter 7 bankruptcy

Discussion in 'Buying, Selling, Renting' started by Mixedupmo, Nov 27, 2016.

  1. TUGBrian

    TUGBrian Administrator

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  2. Bwolf

    Bwolf TUG Member

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    This is a very interesting thread.
     
  3. Mixedupmo

    Mixedupmo Guest

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    update..................Finally we are getting final distribution paperwork. Our property sold for 8million to the town of Provincetown, MA. We will get a .0774% of that which is about $6,000, minus any fee's we owe. My question is: Can we claim a loss on our taxes from the original purchase price we paid. Just wondering.
     
  4. urban5

    urban5 TUG Member

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    No the IRS does not recognize losses incurred on timeshare properties.
     
  5. Panina

    Panina TUG Review Crew: Veteran TUG Member

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    At least you are cleanly out of it now, and some money is a good thing.
     
  6. Mixedupmo

    Mixedupmo Guest

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    Thankyou for your information...yes...finally out of this nightmare!
     
  7. theo

    theo TUG Review Crew: Veteran TUG Member

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    Harbor Hill was / is a great property in a great location. There are many important lessons to be learned from the whole Harbor Hill timeshare debacle, particularly by Board members at any and every other independent timeshare property in existence. Among those lessons I would personally include:

    1. A Board so apathetic and so disinterested in their duties and responsibilities that they actually relinquish all of those duties and responsibilities to a single, irresponsible, unqualified (and larcenous?) individual masquerading as a "manager" is an indefensible open invitation to disaster.

    2. Hiring a competent, professional timeshare management company should be a priority for any independent timeshare property. To have one single person of dubious capability (and / or honesty), with absolutely no oversight or "adult supervision", mismanaging the financial affairs of a timeshare property is another ingredient in a recipe for guaranteed disaster. Of course, utilizing a professional timeshare management company first requires a Board interested enough and involved enough to seek bids and evaluate and hire a professional timeshare management company in the first place. Not the case at Harbor Hill.

    3. Owners need to pay attention to what is going on at independent timeshares at which they own intervals. The debacle at Harbor Hill had rolled far downhill for far too long before owners even raised their eyebrows. By then, it was too late --- too much Board inattention and far too much financial "mismanagement" (probably outright theft, actually) had occurred for too long to successfully salvage the situation. To this day, it remains unclear where or how hundreds of thousands of dollars just simply disappeared there. Property taxes and Federal taxes were not paid for quite some time. No one seemed to notice (or care). Any rudderless ship with no one at the helm will inevitably crash or run aground --- just as the good ship Harbor Hill inevitably did.

    It's a shame what happened there --- really and truly just a shame. If timeshare management and oversight was somehow ever a topic for business school analysis, the Harbor Hill debacle would qualify as a classic case study in exactly how to best guaranty complete failure. :(
     
    Last edited: Sep 12, 2017
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  8. Bunk

    Bunk TUG Member

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    What kind of debts did Harbor Hill owe? It is rare to see a bankruptcy where there is such a big payout to the unit owners
     
  9. theo

    theo TUG Review Crew: Veteran TUG Member

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    You can conduct a search for yourself on TUG to find old threads addressing this matter in detail. Property tax bills went unpaid to the town for an extended period of time. Likewise Federal taxes owed. The outright disappearance of hundreds of thousands of dollars there is of course another matter entirely. :rolleyes:

    I don't know much of anything about bankruptcy, but it is alleged by some that the filing at Harbor Hill was both premature and strategically unwise.

    The property has reportedly now been purchased by the town for 8 million dollars. That certainly seems (to me, anyhow) like a hefty enough sum to result in significant payouts, even after satisfying debts and paying legal fees. :shrug:
     
    Last edited: Sep 11, 2017
  10. bizaro86

    bizaro86 TUG Member

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    If the owners are getting out with $6k, maybe it was exactly the right time to file for bankruptcy...
     
  11. theo

    theo TUG Review Crew: Veteran TUG Member

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    I respectfully disagree; I think that's a very simplistic view of a very complicated situation. You are however at least correct that owners will see some money when the smoke clears, but matters never had to get that desperate there in the first place. It's just a crime (certainly figuratively --- and probably literally).

    The "missing" money (many hundreds of thousands of dollars) was essentially rendered academic by the premature, knee jerk bankruptcy filing (IMnsHO).

    IMnsHO, it is nothing short of miraculous good fortune that the town was willing to pay 8 million dollars for the property.; if you've ever been there it's not a huge parcel (and certainly not worth that much money in the open market). If things had gone differently, owners would have seen not one red cent.
    It wasn't "bankruptcy" that saved owners' hides --- it was the town being willing to pay such an inordinately exorbitant sum to acquire the real estate.
    No developer would ever have even momentarily considered doing so (IMnsHO). :shrug:
     
    Last edited: Sep 11, 2017
  12. Panina

    Panina TUG Review Crew: Veteran TUG Member

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    Wonder what the town will do with it.
     
  13. Bunk

    Bunk TUG Member

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    Theo: I believe that one thing the bankruptcy accomplishes is that it allows the bankruptcy court to rule that the debtor's interest in the property has priority over the time share owners and therefore the property can be transferred free and clear of the time share owner's rights without having to get 80% of them to approve.
     
  14. Bunk

    Bunk TUG Member

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    Looks like it will be used for middle income rentals:
    At a Feb. 6 Special Town Meeting voters OK’d the borrowing of $10.7 million for the 1.2-acre property with four buildings on Harbor Hill Road and Bradford Street Extension. It includes 26 apartments in the West End of town that would be rented to Provincetown residents, Provincetown employees and families in the Provincetown Schools who earn between 80 and 200 percent of the Barnstable County Area Median Income (or between $47,550 and $107,940 per year for a one-person household).
     
  15. theo

    theo TUG Review Crew: Veteran TUG Member

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    I won't pretend to know enough about bankruptcy matters to intelligently comment; you could very well be absolutely correct and your point entirely valid.

    Although never an owner at Harbor Hill, as a Board member elsewhere it just somehow grates on me that there could possibly be so little (i.e., no) involvement or interest in the property, by either its' Board or its' owners, that a single incompetent (and larcenous?) individual, with virtually no oversight or supervision, could (allegedly) steal the place blind, pocket privately conducted transaction proceeds, fail to record deeds, not pay the resort's assorted, routinely predictable and known tax obligations, singlehandedly march the place to the brink of insolvency, unimpeded --- and ultimately be able to just walk away unscathed, apparently with no consequences. Didn't anyone there want to know (or demand to know, either then or now) exactly where / how a million dollars just somehow disappeared into thin air? :shrug:

    The entire debacle is just beyond my ability to comprehend. The town's intended use of the acquired property was certainly predictable in an area where property housing is limited and property values extremely high --- and well beyond the means of people who actually live and work there year round.
    Apparently at least some good will come out of that whole unfortunate mess.
     
    Last edited: Sep 11, 2017
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  16. ssreward

    ssreward TUG Member

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    That's the first time I've even seen "middle income rentals" as (apparently) subsidized housing. I'd hate to be paying taxes in that town - can't say I agree with spending 8 mil to provide housing for people that make enough to buy their own...but it works out well for the timeshare owners!
     
  17. theo

    theo TUG Review Crew: Veteran TUG Member

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    I'm not travelling down the road of socio-economic discussion, but I respectfully submit that you really have to know and understand the many details, nuances and unusual nature of the lower Cape Cod economy. I once lived there year round for a few years, so have at least some personal insight.

    For starters, bear in mind that a whole lot of Provincetown (i.e., virtually all of the land east of Route 6) is owned by the U.S. Dept. of the Interior / NPS / Cape Cod National Seashore. There is no housing there --- and there never will be. The remaining bit of Provincetown (on 1A / Commercial St., Bradford St and the short offshoot streets) has a very limited amount of residential property, much of it used as seasonal "vacation" property, all of it very expensive and mostly unavailable to locally employed year round residents (both literally and financially). Nonetheless, Provincetwon has a Police Department, a Fire Dept (and until recently, its' own high school) to support. It's very hard to draw cops, firemen, teachers, etc. to a town where they can neither afford nor even find year round housing. The adjoining town of Truro has over the past few decades, west of Route 6, essentially become a haven / enclave for the uber wealthy (much of Truro and most everything east of Route is also part of CCNS, btw). Ditto for much / most of the land in Wellfleet east of Route 6. It's a unique situation and a real dilemma, the likes of which I have not personally witnessed before or since living there. I was fortunate to have acquired a (overpriced) long term rental in Wellfleet when I accepted and worked a job on the lower Cape for a few years. Despite the ancillary housing problems, I am personally very grateful that President John F. Kennedy initiated creation and preservation of the Cape Cod National Seashore, making all that unique land and beaches available to everyone, not just the uber wealthy who would surely have turned it all into gated, private vacation property. Good on 'ya, JFK! :thumbup:

    In any event, I'm frankly glad to see that a limited amount of new, affordable housing will become available to year round residents there as a result of the unfortunate and eminently avoidable saga / debacle of the grossly (and probably criminally) mismanaged timeshare property known as Harbor Hill.
     
    Last edited: Sep 12, 2017
  18. bizaro86

    bizaro86 TUG Member

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    I'm not saying the events weren't criminal or disappointing.

    Just that once the situation of debt arose, trying to claw out with special assessments probably just delays the inevitable as more owners default. By declaring bankruptcy now, the owners of the underlying property recover some value (probably enough to buy a similar TS resale for those who want to continue). It is almost never realistic for owners to get enough signatures to sell. A bankruptcy court only needs one signature (that of the judge).

    The board was clearly failing here, which is too bad, but this seems by far the best solution.
     
  19. ssreward

    ssreward TUG Member

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    I'm generally a fan of JFK (poor Bill Clinton caught twice as much flak for doing SO much less, lol) & not at all informed about the eastern seaboard in particular but I notice the Kennedy's haven't given up their Hyannis Port compound so I'll take leave to doubt how generous that declaration was - sounds more NIMBY than anything. And seems like it would correct itself if given a chance - how long would the uber-weather keep summering there if there *weren't* cops, firemen, etc, to keep their fancy homes safe?
     
  20. theo

    theo TUG Review Crew: Veteran TUG Member

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    I think that's a bit narrow minded and judgmental (with no personal offense intended). By your own admission, you don't actually know the area at all.

    Fwiw, the (relatively small) Kennedy compound in Hyannisport is located in an entirely different part of Cape Cod, in a much less impressive area than the expansive area where the Cape Cod National Seashore was established much further "down Cape" --- to be enjoyed in perpetuity by everyone.
     
    Last edited: Sep 12, 2017
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