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Celebrity Resorts files for Bankrupcy

TUGBrian

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http://www.jdsupra.com/post/documentViewer.aspx?fid=491abf36-f3e4-4fbe-81a1-2bbeeebbdb80

SUMMARY: On Friday, Celebrity Resorts, LLC and 35 affiliates voluntarily filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court in Orlando, Florida. Celebrity Resorts was founded in 2003 and the group of debtors own and operate 13 vacation timeshare resorts in Colorado, Florida, Hawaii, New Jersey, Nevada, and Pennsylvania.


In their bankruptcy pleadings, the companies claim that they have been "one of the fastest growing timeshare companies in the nation" since their founding.
 

ricoba

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So, I wonder, was the HOA no vote at David Walley's the straw that broke the proverbial camels back?
 

schiff1997

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Celebrity Resorts file Chapter 11

I am ever glad I managed to dump this company 2 years ago. We had a unit in Lake Buena Vista and sold it privately. Heres the headline in the Orlando Sentinel www.orlandosentinel.com/business
 

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Well, I still own at Resort World II. I was wondering how this could effect the owners?
 

theo

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I know nothing about bankruptcy and very little about Celebrity.

That much openly acknowledged right up front, I find myself wondering what a bankruptcy filing actually means in real, practical impact, upon folks who own weeks at resorts under the umbrella of the company filing for bankruptcy. Anyone here know (...as opposed to mere speculation?) :shrug:

It depends on what class of bankruptcy is filed ( i.e. Chapter 11, Chapter 7 ). In this case, they filed for Chapter 11 which should not materially affect owners nor employees. What Chapter 11 basically does is allow a company to reorganize while being protected from their debtors. Many companies have operated under Chapter 11 for a long time. If Chapter 11 does not allow the company to succeed then they will file for Chapter 7 which basically liquidates the company.

Here is a link with some details about the Celebrity Resorts Chapter 11 bankruptcy.

http://www.netdocketsblog.com/2010/03/celebrity-resorts-files-for-chapter-11.html
 
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Mel

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The only way I see it possibly effecting timeshare owners is through the HOAs which are listed among the creditors. Under Chapter 11, they will reorganize, but not erase debt. While that is good, it might mean they won't be paying their share immediately, which could hurt cashflow at some of the resorts. That would largely depend on what percentage of units they own, and whether they are behind in their share of the fees.
 

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Bankruptcy

I know nothing about bankruptcy and very little about Celebrity.

That much openly acknowledged right up front, I find myself wondering what a bankruptcy filing actually means in real, practical impact, upon folks who own weeks at resorts under the umbrella of the company filing for bankruptcy. Anyone here know (...as opposed to mere speculation?) :shrug:
It has no effect at all on the HOA. This is strictly related to the management companies and their affiliates.
 

JMAESD84

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The only way I see it possibly effecting timeshare owners is through the HOAs which are listed among the creditors. Under Chapter 11, they will reorganize, but not erase debt. While that is good, it might mean they won't be paying their share immediately, which could hurt cashflow at some of the resorts. That would largely depend on what percentage of units they own, and whether they are behind in their share of the fees.

I would agree with this. This would also be a great time for an owner controlled HOA to petition the court to get control of the developer rights, unsold inventory and all marketing rights to the resort, so that the HOA could be in control of the resort. Of course, if Celebrity controls the HOA board that petiton would never happen.
 

gwenco

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When a resort company goes bankrupt

As probably posted previously on this site, Celebrity Resorts filed for Chapter 11 March 8th in the state of Florida. They own resorts throughout the country and have purchased them by "bottom feeding" and then letting them become run down properties but of course, still collecting and increasing m/f's. We own at Celebrity Hilltop and have owned since day one. First Ramada owned it, then Leisure (which has ties to Celebrity or visa versa) and then Celebrity took over a few years ago. The resort itself is situated on prime real estate in Steamboat, CO and is sandwiched between million dollar homes. What happens with Celebrity folds? What is the chance a developer will by the land with the resort "thrown" in and us owners be paid our share? :shrug: Or, is that a possibility? I am hoping it will occurr the same way as Ramada Suites in Vegas was handled. Summer (something like that) took it over and totally remodeled the resort and it is now one of the premier properties for Vegas. There seems to be alot of in-fighting amongst the Celebrity players including family members so I don't see the company being "reorganized" from the bankruptcy.

Or am I just dreaming???:doh:
 

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As probably posted previously on this site, Celebrity Resorts filed for Chapter 11 March 8th in the state of Florida. They own resorts throughout the country and have purchased them by "bottom feeding" and then letting them become run down properties but of course, still collecting and increasing m/f's. We own at Celebrity Hilltop and have owned since day one. First Ramada owned it, then Leisure (which has ties to Celebrity or visa versa) and then Celebrity took over a few years ago. The resort itself is situated on prime real estate in Steamboat, CO and is sandwiched between million dollar homes. What happens with Celebrity folds? What is the chance a developer will by the land with the resort "thrown" in and us owners be paid our share? :shrug: Or, is that a possibility? I am hoping it will occurr the same way as Ramada Suites in Vegas was handled. Summer (something like that) took it over and totally remodeled the resort and it is now one of the premier properties for Vegas. There seems to be alot of in-fighting amongst the Celebrity players including family members so I don't see the company being "reorganized" from the bankruptcy.

Or am I just dreaming???:doh:

If my recollection is correct, Ramada Vacation Suites, now known as Summer Bay Resort, was "saved" from doom because it was located on a prime piece of property that Harrah's Casino next door wanted. The purchase was made and new timeshare units were built on a new parcel about a block away. That Cinderella story is not likely to be repeated at any of the other Celebrity resorts.
 

Conan

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Is it likely that Celebrity owns underlying units at its properties? If so will there be a time that it ceases to pay maintenance on those units?

I own an RCI Points week at Celebrity Resorts Palm Coast, formerly called Harbor Club, which is why I'm wondering.
 

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I believe that Celebrity has a meeting with creditors on April 5. From my previous experiences, companies that file Chapter 11 do so in order to reorganize, etc., still it's quite harsh. However, there is so much turmoil within this company and "family", I can't believe that there won't be some type of scale back, I think the term is called becoming Asset Light. They seem to bite off too much, instead of concentrating on improving their existing properties, customer service, etc.
 

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Fees are due and payable usually no matter what

Is it likely that Celebrity owns underlying units at its properties? If so will there be a time that it ceases to pay maintenance on those units?

I own an RCI Points week at Celebrity Resorts Palm Coast, formerly called Harbor Club, which is why I'm wondering.

In the past, which guarantees nothing but shows the likely direction the process will take, when a Developer goes into bankruptcy the first order from the Court is that any fees due to the Association(s) be paid. The Courts understand that is the very lifeblood of every Association and they cannot be encumbered by the process they hold no control over. It is likely that will also be the case here and effectively the Association/Resort will see no problems with collections on Celebrity controlled units. It may be an entirely different story if they also hold management there as that will suffer and the Owners may wish to consider a change both for service levels and to protect themselves.
 

theo

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A question...

In the past, which guarantees nothing but shows the likely direction the process will take, when a Developer goes into bankruptcy the first order from the Court is that any fees due to the Association(s) be paid. The Courts understand that is the very lifeblood of every Association and they cannot be encumbered by the process they hold no control over. It is likely that will also be the case here and effectively the Association/Resort will see no problems with collections on Celebrity controlled units. It may be an entirely different story if they also hold management there as that will suffer and the Owners may wish to consider a change both for service levels and to protect themselves.

I don't claim to know enough about bankruptcy (or Celebrity) to dispute any of the above.
However, it is still my understanding (mostly from Celebrity owner forums) that, at least in the specific instances of the several seperate Celebrity properties in Florida, the resorts' BOD's / HOA's are all essentially just a carefully controlled collection of Celebrity employees and / or lackeys.

Assuming, just for the sake of discussion, that this is indeed the case, how might that fact impact how the court perceives (or issues any orders regarding) such a pseudo-"association"? It's hard for me to wrap my head around why or how foxes can be expected to act in the best interests of the henhouse chickens... :shrug:
 
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timeos2

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Payments made but are they used correctly?

I don't claim to know enough about bankruptcy (or Celebrity) to dispute any of the above.
However, it is still my understanding (mostly from Celebrity owner forums) that, at least in the specific instances of the several seperate Celebrity properties in Florida, the resorts' BOD's / HOA's are all essentially just a carefully controlled collection of Celebrity employees and / or lackeys.

Assuming, just for the sake of discussion, that this is indeed the case, how might that fact impact how the court perceives (or issues any orders regarding) such a pseudo-"association"? It's hard for me to get my head around why or how foxes can be expected to act in the best interests of the henhouse chickens... :shrug:

For management it could mean quite a battle for control - not uncommon in these cases and perhaps a chance for the individual owners to gain the upper hand. For payments only the Courts have been consistent in ordering payments be made. Unfortunately if those payments are being poorly handled after they are made - a management issue - the Courts aren't involved directly in that & it is up to the owners to get that fixed. Back to wresting control from the developer. Always a good plan IMO.
 

theo

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I still don't get it...

...it is up to the owners to get that fixed. Back to wresting control from the developer. Always a good plan IMO.

I certainly wouldn't disagree in concept, but how exactly could that happen in this particular instance?
From what little I know of the Celebrity operations at a few places in Florida, Celebrity has controlling ownership (and management) interests, sells only floating week ownerships, and routinely rents out any and all possible "unreserved" units, at will, on a daily, several day or weekly basis.

I guess it's just a bit hard for me to conceptualize in real, applied terms, just how control ever would (or could) be "wrested" from such a controlling majority ownership interest. Maybe I'm just dense...:shrug:
 
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timeos2

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If developer holds absolute control then I don't own there

I certainly wouldn't disagree in concept, but how exactly could that happen in this particular instance?
From what little I know of the Celebrity operations at a few places in Florida, Celebrity has controlling ownership (and management) interests, sells only floating week ownerships, and routinely rents out any and all possible "unreserved" units, at will, on a daily, several day or weekly basis.

I guess it's just a bit hard for me to conceptualize in a real, practical way, just how control ever would (or could) be "wrested" from such a controlling majority ownership interest. Maybe I'm just dense...:shrug:

Without knowing how the resort is sold, how the documents read, who has the true voting power/control the "how" to do it is an unknown to me. But IF the resort has unbreakable control/management of the original developer and/or subsequent developers that took over that role then that is a resort / system I wouldn't own. It is far too easy for those with that type of power to favor the company over the owners and leave the owners with no recourse. Not a good place to be as an individual owner.
 

theo

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Maybe apples vs. oranges...

Without knowing how the resort is sold, how the documents read, who has the true voting power/control the "how" to do it is an unknown to me. But IF the resort has unbreakable control/management of the original developer and/or subsequent developers that took over that role then that is a resort / system I wouldn't own. It is far too easy for those with that type of power to favor the company over the owners and leave the owners with no recourse. Not a good place to be as an individual owner.

I don't believe that Celebrity has ever actually "built" any among their (...about 8 in total?) resorts, so the "original developer" (and the associated documents) is liklely radically different for each Celebrity facility.
My understanding of the Celebrity history / m.o. is that they have (over about the last 25 years) acquired various financially troubled enterprises to turn them into timeshares and rentals. For example, the Celebrity facility in Indian Shores, FL started out as private, whole ownership condominiums (initially called Aloha Bay when my folks lived in that area). Ramada took the property over next (not sure whether as motel or timeshare ---or maybe both) and within not many years thereafter sold out to Celebrity.

I don't envy anyone involuntarily involved as an owner in the Celebrity mess. Taking into account their "checkered" history and practices, Meyers family in-fighting --- and now a bankruptcy filing, I'm guessing that a whole lot of lawyers are breaking into big smiles about a whole lot of billable hours to come...
 
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timeos2

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It takes time & money - they may not have either!

I don't believe that Celebrity has ever actually "built" any among their (...about 8 in total?) resorts, so the "original developer" (and the associated documents) is liklely radically different for each Celebrity facility. My understanding of the Celebrity history / m.o. is that they have (over about the last 25 years) acquired various financially troubled enterprises to turn them into timeshares and rentals. For example, the Celebrity facility in Indian Shores, FL started out as private, whole ownership condominiums (initially called Aloha Bay when my folks lived in that area). Ramada took the property over next (not sure whether as motel or timeshare ---or maybe both) and within not many years thereafter sold out to Celebrity.

I don't envy anyone impacted as an owner by this whole Celebrity mess. Taking into account their "checkered" history and practices, Meyers family in-fighting --- and now a bankruptcy filing, I'm guessing that a whole lot of lawyers are breaking into big smiles about a whole lot of billable hours to come...

If they didn't write the original docs then after so many years (usually 5) the resort has to be turned over to the owners control. No matter how much any developer/subsequent developer may own/control Fl law doesn't allow them to retake control from the individual owners - although plenty of developers may try! Of course it might take a lawsuit to unseat them and that will cost money so things may go down a road they shouldn't if no one is willing to stand up & to pay the cost to enforce the law. Groups like Wastegate seem to depend on that to keep things under tight Developer control long after they should be gone. There may be a similar case here. I too fel sorry for the owners as they are in a very tough spot.
 

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There was an extremely complicated situation with the Summer Bay Resort property in Las Vegas that Celebrity acquired from bankruptcy of Leisure Resorts. The Las Vegas resort survived because Harrah's Casino purchased the property and built replacement timeshare units nearby.

I have attended a few of the annual meetings at the Celebrity Resorts property at Brigantine Beach in New Jersey. (Members of our New York timeshare owners group own several weeks there). Celebrity acquired this resort after Leisure Resorts went bankrupt. It had previously been part of the Ramada Vacation Suites group. As soon as Celebrity acquired the Brigantine property, they "kicked out" the long-standing HOA Board that was composed of dedicated owners (including at least one TUG member).

There were no annual meetings for several years. A Special Assessment of approximately $1100. was ordered, and owners were given a very short period of time to pay it. It was a heavy burden to many seniors on a tight budget who had been owners for over 20 years. Owners started to demand that an annual meeting be held, as required by the original legal documents.Celebrity then scheduled a meeting on Friday at 9:00 a.m. at a hard to find location about a mile or two away from the resort. The notices were mailed at the last minute and some arrived after the meeting date.

The meeting was conducted by a slick group of executives from Orlando who, IMHO, were masters of double talk and misinformation. They claimed that all of the legal documents were lost or possibly destroyed when Leisure Resorts acquired the Brigantine Resort. One owner at the meeting stated that he had owned since its inception as a timeshare in the 1980's and had been an HOA member and President for many years. He said that he had saved tons of papers and would gladly provide copies of whatever documents Celebrity wanted. He reported next year that they had never taken him up on his offer.

About 20 owners made their way through a major storm (almost a hurricane) to the last meeting in October 2010. It turned out to be a sales presentation to convert to Points, not even RCI Points, but some sort of program Celebrity had contrived for what amounted to internal changes to other Celebrity properties.

On the positive side, Celebrity has greatly improved the Celebrity property which had fallen into disrepair under the management of Ramada Vacation Resorts and Leisure Resorts. There are a large number of owners who use their weeks every year. The location is excellent--right on a beautiful beach, on a charming upscale island, only 10 minutes from the Atlantic City casinos.

There is a nice, popular restaurant on-site which, I believe, is rented out by Celebrity to a private company. The food and views are excellent but it poses a problem to owners in the summer, because owners have to compete with diners compete for the limited parking spaces.

Hopefully the owners can regain control of the resort. Celebrity, however, owns several weeks, mainly deep off season weeks with virtually no resale value. Many prime summer weeks have been sold via Ebay over the past two years. Many were already converted to RCI Points.

There are owners willing to spend whatever time it takes at the Courthouse to search deeds and compile a mailing list of owners. Any suggestions on what type of legal action can be taken, what type of attorney would handle a situation like this?
 

AwayWeGo

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One Timeshare, Three Different Names.

There was an extremely complicated situation with the Summer Bay Resort property in Las Vegas that Celebrity acquired from bankruptcy of Leisure Resorts. The Las Vegas resort survived because Harrah's Casino purchased the property and built replacement timeshare units nearby.
Our initial modern-day exposure to timeshares included a high-pressure sales pitch at Summer Bay Las Vegas back when it was still Ramada Vacation Suites Las Vegas. They actually let us stay in 1 of their timeshare units, rather than putting us up in a dinky motel somewhere remote -- which is what happened on the Orlando & Ft. Lauderdale FL legs of that same promotional tour package.

We were there again on another promotional stay after the place had transmogrified into Summer Bay Las Vegas. In between, I believe, the timeshare was briefly known as Leisure Resorts Las Vegas.

Both times when we were there on sales promotions, the timeshare sellers mentioned the extremely high value of the property because of its proximity to the heart of The Strip, planting the idea that all the timeshare owners there stood to cash in bigtime when Harrah's or Ceaser's or some other big casino company upped the ante sufficiently.

Now that the old timeshare property has actually been swapped for the current Summer Bay Desert Club at its new location, it would be interesting to tour there, or even stay there, once again.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​
 

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I don't believe that Celebrity has ever actually "built" any among their (...about 8 in total?) resorts, so the "original developer" (and the associated documents) is liklely radically different for each Celebrity facility.
They are the original developers of Celebrity Orlando, formerly known as Resort World of Orlando, The Spas, The Villages, and Lake Buena Vista. In the beginning, the developer was known by a different name, but they are the same family.

Control of Resort World was never turned over to the Home Owners Association. Such HOA meetings as were held were only information sessions. To my knowledge the owners have never had the opportunity to vote on anything.
 

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This is an issue where we agree 100%. If a developer or management company controls the HOA BOD, I have absolutely no interest in owning at that resort.

I have read enought about Celebrity that I would not touch one of their resorts with a 10 foot pole. They have a reputation for strongarming their way into control of HOA's and cutting off the voice of the members. Their management practices also leave a great deal to be desired.

I hope that owner groups can be organized at some of their resorts to take back the HOA's and terminate management contracts with Celebrity at the earliest opportunity. They are one of the real slugs of the timeshare industry, right down there in the sewer with Festiva.


Without knowing how the resort is sold, how the documents read, who has the true voting power/control the "how" to do it is an unknown to me. But IF the resort has unbreakable control/management of the original developer and/or subsequent developers that took over that role then that is a resort / system I wouldn't own. It is far too easy for those with that type of power to favor the company over the owners and leave the owners with no recourse. Not a good place to be as an individual owner.
 

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In most states, state corporate law allows any timeshare owner to demand and receive a full mailing list of members.

You need a lwyer familiar with corporate litigation, as the HOA is almost certainly organized as a non-profit corporation. You need to assemble all corporation documents that are recorded, which will include the articles of incorporation, and in some instances by-laws.

On the OBX, all of the four resorts developed by First Flight Builders had concerned owner groups organize and challenge developer control. They kicked First Flight out of control of all of the resorts, acquiring all of their unsold developer inventory in the process, and in the case of one of them also a six figure sum in cash. I have owned at three of those resorts at one time or another and have heard all of the war stories although I did not own at the time the battle was going on. A resort I own at in South Africa also had the members organize and kick out the developer from control.


There was an extremely complicated situation with the Summer Bay Resort property in Las Vegas that Celebrity acquired from bankruptcy of Leisure Resorts. The Las Vegas resort survived because Harrah's Casino purchased the property and built replacement timeshare units nearby.

I have attended a few of the annual meetings at the Celebrity Resorts property at Brigantine Beach in New Jersey. (Members of our New York timeshare owners group own several weeks there). Celebrity acquired this resort after Leisure Resorts went bankrupt. It had previously been part of the Ramada Vacation Suites group. As soon as Celebrity acquired the Brigantine property, they "kicked out" the long-standing HOA Board that was composed of dedicated owners (including at least one TUG member).

There were no annual meetings for several years. A Special Assessment of approximately $1100. was ordered, and owners were given a very short period of time to pay it. It was a heavy burden to many seniors on a tight budget who had been owners for over 20 years. Owners started to demand that an annual meeting be held, as required by the original legal documents.Celebrity then scheduled a meeting on Friday at 9:00 a.m. at a hard to find location about a mile or two away from the resort. The notices were mailed at the last minute and some arrived after the meeting date.

The meeting was conducted by a slick group of executives from Orlando who, IMHO, were masters of double talk and misinformation. They claimed that all of the legal documents were lost or possibly destroyed when Leisure Resorts acquired the Brigantine Resort. One owner at the meeting stated that he had owned since its inception as a timeshare in the 1980's and had been an HOA member and President for many years. He said that he had saved tons of papers and would gladly provide copies of whatever documents Celebrity wanted. He reported next year that they had never taken him up on his offer.

About 20 owners made their way through a major storm (almost a hurricane) to the last meeting in October 2010. It turned out to be a sales presentation to convert to Points, not even RCI Points, but some sort of program Celebrity had contrived for what amounted to internal changes to other Celebrity properties.

On the positive side, Celebrity has greatly improved the Celebrity property which had fallen into disrepair under the management of Ramada Vacation Resorts and Leisure Resorts. There are a large number of owners who use their weeks every year. The location is excellent--right on a beautiful beach, on a charming upscale island, only 10 minutes from the Atlantic City casinos.

There is a nice, popular restaurant on-site which, I believe, is rented out by Celebrity to a private company. The food and views are excellent but it poses a problem to owners in the summer, because owners have to compete with diners compete for the limited parking spaces.

Hopefully the owners can regain control of the resort. Celebrity, however, owns several weeks, mainly deep off season weeks with virtually no resale value. Many prime summer weeks have been sold via Ebay over the past two years. Many were already converted to RCI Points.

There are owners willing to spend whatever time it takes at the Courthouse to search deeds and compile a mailing list of owners. Any suggestions on what type of legal action can be taken, what type of attorney would handle a situation like this?
 
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