Aviawest/Crelogix bankruptcy merged thread

[tpelton007 Junior Member Find all posts View Profile Close tpelton007]

Aviawest looking at merger with VI

If on March 11 a merger is voted for - then members would have to choose to join VI and be hit with a 25-60% increase in fees or choose to simply allow their ownership to disappear (i.e., walk away without liability).

They have only provided the members with minimal information. I contacted Vacation Internationale, and was given the run around. They don't want to provide fulsome information which might allow members to figure out what a poor deal this is.

It seems like there is undue haste and insufficient options for discussion amongst members.

The majority of the directors as of May 20 were also the owners and directors of the companies filing for bankruptcy protection, I am concerned that they may not have had the best interests of the ARC in mind when they promoted the early transfer of fees (hundreds of thousands of $) to the management company. This money is now apparently lost.

I would like to see this decision on hold - until a formal review by an outside agent can be conducted. What is the rush and who benefits from it? Doesn't look like the owners will. Many will simply walk away from their timeshare. What happens to those points?

[tpelton007 Junior Member Find all posts View Profile Close tpelton007]

Aviawest merging with Vacation Internationale - Bad deal...

We have received notice of a vote to be held on March 11 about merging (takeover, ?) of Aviawest Resort Club (ARC) with/by Vacation Internationale. I think this is a bad deal for the owners.

If on March 11 a merger is voted for - then members would have to choose to join VI for a modest fee and be hit with a 25-60% increase in fees (depending on how many points you may have to convert) or choose to simply allow their ownership to disappear (i.e., walk away without liability).

They have only provided the members with minimal information. There is no additional information available, and they are seeking proxy votes (so that they will have enough votes to push this through regardless of the wishes of those who show up).

I contacted Vacation Internationale asking for more information, and was given the run around. They don't want to provide fulsome information which might allow members to figure out what a poor deal this is.

It seems like there is undue haste and insufficient options for discussion amongst members.

The majority of the directors as of May 2011 were also the owners and directors of the companies filing for bankruptcy protection, I am concerned that they may not have had the best interests of the ARC in mind when they promoted the early transfer of fees (hundreds of thousands of $) to the management company. This money is now apparently lost.

I would like to see this decision on hold - until a formal review by an outside agent can be conducted. I have sent a request for a review to the board, and am waiting for a reply. I am not a lawyer, but it seems that if the ARC board tried to push this merger through without a fulsome discussion, then they are not serving ARC well, and perhaps some legal remedy may be sought.

What is the rush and who benefits from it? Doesn't look like the owners will. Many will simply walk away from their timeshare. What happens to those points?

At the moment there are about 97 condos and 200 million RCI points in ARC - with about 2.5 million dollars of maintenance fees. This club should be viable. Why are we giving it away to VI?

I can't find a way to communicate efficiently with other members. hoping this forum post works...

[suzie Junior Member Find all posts View Profile Close suzie]

I am not worried about my points i am worried about my lost investment of money

[tpelton007 Junior Member Find all posts View Profile Close tpelton007]

Aviawest club owners might to much better by liquidating...

This merger with VI essentially discards the club owners claim on the assets (at least the folks who walk away). The VI points are essentially worthless – you can acquire as many as you like on the open market for almost zero cost as long as you are willing to pay the maintenance fees. Also, when I contacted VI, they would not answer any of my questions regarding their prestige program, but I expect I am correct in my suspicion that they will want to charge us all a pretty penny to upgrade. How can the directors approve of this plan – where is the benefit for the club owners?

So in contrast to this zero dollar option, I would suggest that liquidation is the far more appropriate option. The club has a huge asset – 97 condos – worth $20 - $40 million (a very rough but reasonable estimate) that should be returned to the shareholders – the club members. The board's obligation is to look after our interests – not the developers. How can they in good conscience be promoting this merger?

Sure there may be short term struggles and costs - take out a restructuring loan against our assets to hold onto things if necessary. It is far better to recover $20 000 000+ for the members than essentially realizing a $0 benefit with a Vacations Internationale merger.

[tpelton007 Junior Member Find all posts View Profile Close tpelton007]

liquidation is a better option... if we can do it

Aviawest resort club has assets worth $20-$40 million dollars.

The Vacation Internationale offer is essentially - come join us if you like and let us take over all the assets. Given that VI points are pretty freely available at fire sale prices too - the net value of the offer is about $0

What about considering liquidation. If we were able to net $20 000 000 for the 97 ocean view condos (a reasonable value I think), then a club member with 50000 RCI points would receive $5000 and have no further liability. This seems like a much better option for the majority of club members (all?)

[lgvholdings Junior Member Find all posts View Profile Close lgvholdings]

The crelogix-aviawest-point to point-ect connection

We too hold 30000 aviawest points. Bought in 2011. After a sales pitch that rivals G.W. Bush's weapons of mass destrution story. We couldn't sign on fast enough. We were told that loan on the points would be secured with the points themselves. Essentially, if we defaulted on our payments the points would be revolked. Well two weeks later we recieve a letter in the mail from Crelogix acceptance corporation, informing us they bought our debt.

Aviawest sold us these points during a time when the had to have known they were going down.

Crelogix bought the debt and also knew aviawest was going down, as crelogics is one of the major ceditors seeking payment from the liquidation of assets.

Apon reading other posts on this site concerning the point to point-Vacation internationale merger, it seams the Crelogix was the holder of many owners loans as well. In like a dirty shirt.

I don't know what to make of it all, I'm not a lawyer. But I think some rules have been broken here.

If anyone cares to join in this discussion, lets talk and see what our options are.

[lgvholdings Junior Member Find all posts View Profile Close lgvholdings]

Aviawest-Crelogics-Point to Point connection

We hold 30000 aviawest points. Bought in 2011. After a sales pitch that rivals G.W. Bush's weapons of mass destrution story. We couldn't sign on fast enough. We were told that loan on the points would be secured with the points themselves. Essentially, if we defaulted on our payments the points would be revolked. Well two weeks later we recieve a letter in the mail from Crelogix acceptance corporation, informing us they bought our debt.

Aviawest sold us these points during a time when the had to have known they were going down.

Crelogix bought the debt and also knew aviawest was going down, as crelogics is one of the major ceditors seeking payment from the liquidation of assets.

Apon reading other posts on this site concerning the point to point-Vacation internationale merger, it seams the Crelogix was the holder of many owners loans as well. In like a dirty shirt.

I don't know what to make of it all, I'm not a lawyer. But I think some rules have been broken here.

If anyone cares to join in this discussion, lets talk and see what our options are.[/QUOTE]

[lgvholdings Junior Member Find all posts View Profile Close lgvholdings]

Aviawest-Crelogicx-point to point-Vacation Internationale Connection?

We hold 30000 aviawest points. Bought in 2011. After a sales pitch that rivals G.W. Bush's weapons of mass destrution story. We couldn't sign on fast enough. We were told that loan on the points would be secured with the points themselves. Essentially, if we defaulted on our payments the points would be revolked. Well two weeks later we recieve a letter in the mail from Crelogix acceptance corporation, informing us they bought our debt.

Aviawest sold us these points during a time when the had to have known they were going down.

Crelogix bought the debt and also knew aviawest was going down, as crelogics is one of the major ceditors seeking payment from the liquidation of assets.

Apon reading other posts on this site concerning the point to point-Vacation internationale merger, it seams the Crelogix was the holder of many owners loans as well. In like a dirty shirt.

I don't know what to make of it all, I'm not a lawyer. But I think some rules have been broken here.

If anyone cares to join in this discussion, lets talk and see what our options are.

[aliikai2 Super Moderator Find all posts View Profile Close aliikai2]

You are lucky

That a solvent company like Vacation Internationale is interested in preserving your ownerships.
Around Canada several timeshare clubs have failed since the downturn. Some were just dissolved withe the creditors taking what value there was and the share owners like you receiving nothing.
You have stated that your annual fees will go up, and if that is the case then your AW fees were too low to support the operation of the club as VI is owner owned and not a for profit company. Their annual fees have risen .11 per point over the last 4 years, when all costs have skyrocketed. They maintain there resorts and they were the 1st points based timeshare.
You do have options, you can not roll your AV into VI, and not have anything, which some of the PTP members choose that option. Some others became VI members and are pretty happy.
As in most things in Life you have a choice.

fwiw,
Greg

[aliikai2 Super Moderator Find all posts View Profile Close aliikai2]

You are lucky

That a solvent company like Vacation Internationale is interested in preserving your ownerships.
Around Canada several timeshare clubs have failed since the downturn. Some were just dissolved withe the creditors taking what value there was and the share owners like you receiving nothing.
You have stated that your annual fees will go up, and if that is the case then your AW fees were too low to support the operation of the club as VI is owner owned and not a for profit company. Their annual fees have risen .11 per point over the last 4 years, when all costs have skyrocketed. They maintain there resorts and they were the 1st points based timeshare.
You do have options, you can not roll your AV into VI, and not have anything, which some of the PTP members choose that option. Some others became VI members and are pretty happy.
As in most things in Life you have a choice.

fwiw,
Greg

[aliikai2 Super Moderator Find all posts View Profile Close aliikai2]

You are lucky

That a solvent company like Vacation Internationale is interested in preserving your ownerships.
Around Canada several timeshare clubs have failed since the downturn. Some were just dissolved with the creditors taking what value there was and the share owners like you receiving nothing.
You have stated that your annual fees will go up, and if that is the case then your AW fees were too low to support the operation of the club as VI is owner owned and not a for profit company. Their annual fees have risen .11 per point over the last 4 years, when all costs have skyrocketed. They maintain there resorts and they were the 1st points based timeshare.
You do have options, you can not roll your AV into VI, and not have anything, which some of the PTP members choose that option. Some others became VI members and are pretty happy.
As in most things in Life you have a choice.

fwiw,
Greg

[tpelton007 Junior Member Find all posts View Profile Close tpelton007]

Wait! Lucky?

Hi Greg,

Thanks for your insight. I don't doubt that some members of VI are happy.

But there are several things that are not clear.

1. Aviawest Resort Club has substantial assets (97 nice condos perhaps worth $400 000 each in todays market) and little or no debt. The club is not bankrupt, but the developer's companies are. Unfortunately it appears that the developers were also acting as the directors of the club (should have been a big red flag) and managed to prepay several hundred thousand $ and that is now lost. So some special assessment may be needed in the very short term - maybe $0.005 per point (that would raise $1 million) - less than the proposed increase associated with VI maintenance fees (see below).

It appears that the former directors (developers) were overcharging for their management services (the companies that they owned and serviced ARC with were ordered to drop the 3 family members employed because their services were not needed to service the resort management). I would like someone to investigate -but I don't know who to call.

As I understand it the developers ran into financial difficulty when the recession lasted too long while they were developing other properties. Nothing to do with ARC - except that the majority of the directors happened to be the developers family . It is my understanding that directors are supposed to seek the best for those they are representing - it appears that they may have been more concerned about their financial gain (at first) and then trying to hold on (as other developments went south)

Bottom line the existing annual ARC fees are more than sufficient - $2 500 000 a year budget would easily maintain the 97 condos in the pool.

The only sticky point is that the bankrupt companies are still running the resort (being monitored) and there has been some difficulty in figuring out who should be paying what to whom until that group of companies gets sorted out.


2. The remaining current directors (who were also directors when the developers were directors) seem to have made this deal with VI - which essentially forces everyone to choose whether to throw away their 'investment', or sign on for an extra chunk of MF with VI - who will then swallow ARC assets. There are 4200 members, if 2000 choose to go with VI and the assets are worth $40 000 000 then that's $20 000 a piece being paid to VI to buy in (essentially a full price sale with no selling expenses), while the remaining 2200 members are forced to walk away with nothing. I would recommend liquidating and distributing the proceeds. ARC directors seem to be giving away the assets for nothing - why pay $20000 for a set of 100 VI points when you can find essentially free VI points contracts on the web (just pay closing costs).


3. The tactics being used to RAM THROUGH this merger are right out of a TS salesman's playbook. They are highly unethical and possibly illegal.

- only give minimal information on costs (they aren't even telling us the VI maintenance fee rate - I had to dig that out on my own)

- don't spell out the other costs. Is there a cost to upgrade to the VI prestige level (one-time or on-going or both)?

-don't provide any information that might cause the members to say "wait"
They haven't even come clean with the members that the former directors managed to arrange to siphon off hundreds of thousands of dollars as prepayments - just before they went into bankruptcy protection. (Last May the majority of the directors were members of the developers family - by October, they were in bankruptcy and no longer directors).

- Stonewall when people ask for information on the VI program. Both the ARC directors and VI (I called to ask about the prestige program - they said it would all be explained on the 11th)

- Block/fail to facilitate communication between members who want to discuss the options.

- and last but not least - put a false deadline on the process to force people into making a decision without thinking through all of the options - Why do we have to decide on March 11th - without knowing all of the potential costs without having other options presented and without having a fulsome discussion.

-One afternoon in a room with a few well prepared sales pitches from the ARC directors and VI pitchmen and nobody to offer a fully informed counter proposal - sounds like a timeshare sales meeting to me.

4. It would be great to get a fulsome disclosure about P2P merger with VI last year. What portion of the members of that group converted. What was the total value of the assets acquired by VI? I don't know many details, but for our ARC, it looks like VI is getting all of the benefit. More fee paying members (with very high fees) and more assets.

5. fees are currently $7.08 per VI point (2011) which works out to $0.01686 per RCI point. Same period 2011-12 at ARC MF are $0.01357 for the first 30000 and then $0.00896 for the remainder.

Thus in 2011 fees for ARC members converting to VI (1 VI point for 420 RCI points) we see:

If you have 30000 RCI points, your maintenance cost will rise from $407 to $506 (a 24% increase)
If you have 60000 RCI points, your maintenance cost will rise from $676 to $1011
If you have 100000 RCI points, your maintenance cost will rise from $1034 to $1685
If you have 150000 RCI points, your maintenance cost will rise from $1487 to $2537 (a 71% increase!)

I also note that Vis maintenance fees have gone up 35 % over the last 10 years, and almost 60% from 99/00-2009/10.



Greg, I am glad you are on this forum - could you possibly enlighten me:

What is the cost of the Prestige membership (for 100 VI points, for 400 VI points)?

Also, I understand the VI is non-profit. What are the salaries (or are they volunteer) of the directors and who are they - are there open elections?

Is the associated company (VRI?) involved in this in any way - this is a for profit company isn't it - who owns that?

Thanks!

[tpelton007 Junior Member Find all posts View Profile Close tpelton007]

Aviawest Resort Club is not bankrupt - we are being pillaged

Hi Greg,

Thanks for your insight. I don't doubt that some members of VI are happy.

But there are several things that are not clear.

1. Aviawest Resort Club has substantial assets (97 nice condos perhaps worth $400 000 each in todays market) and little or no debt. The club is not bankrupt, but the developer's companies are. Unfortunately it appears that the developers were also acting as the directors of the club (should have been a big red flag) and managed to prepay several hundred thousand $ and that is now lost.

Bottom line the existing annual ARC fees are more than sufficient - $2 500 000 a year budget would easily maintain the 97 condos in the pool.

The only sticky point is that the bankrupt companies are still running the resort (being monitored) and there has been some difficulty in figuring out who should be paying what to whom until that group of companies gets sorted out.


2. The remaining current directors (who were also directors when the developers were directors) seem to have made this deal with VI - which essentially forces everyone to choose whether to throw away their 'investment', or sign on for an extra chunk of MF with VI - who will then swallow ARC assets.

There are 4200 members, if 2000 choose to go with VI and the assets are worth $40 000 000 then that's $20 000 a piece being paid to VI to buy in (essentially a full price sale with no selling expenses), while the remaining 2200 members are forced to walk away with nothing. Why pay $20000 for a set of 100 VI points when you can find essentially free VI points contracts on the web (just pay closing costs).




3. The tactics being used to RAM THROUGH this merger are right out of a TS salesman's playbook.

- only give minimal information on costs (they aren't even telling us the VI maintenance fee rate - I had to dig that out on my own)

- don't spell out the other costs. Is there a cost to upgrade to the VI prestige level (one-time or on-going or both)? Seems like the only good way to ensure you get a good deal is to own VI points is to be a platinum member.

-don't provide any information that might cause the members to say "wait!"
They haven't even come clean with the members that the former directors managed to arrange to siphon off hundreds of thousands of dollars as prepayments - just before they went into bankruptcy protection. (Last May the majority of the directors were members of the developers' family - by October, their companies were in bankruptcy and no longer directors).

- Stonewall when people ask for information on the VI program. Both the ARC directors and VI (I called to ask about the prestige program - they said it would all be explained on the 11th)

- Block/fail to facilitate communication between members who want to discuss the options.

- and last but not least - put a false deadline on the process to force people into making a decision without thinking through all of the options - Why do we have to decide on March 11th - without knowing all of the potential costs without having other options presented (liquidate, special assessment to buy up resort support assets) and without having a fulsome discussion.

- Call everyone who can make it to one meeting in a room with a few well prepared sales pitches from the ARC directors and VI pitchmen all singing the same tune and nobody to offer a fully informed counter proposal

-Then force a vote (to which they have already determined the outcome because they collected proxies from many members who are assuming the directors are acting in their best interests - but who have not been told the whole story).

This whole merger deal smells very fishy. Is there someone in the back room somewhere making a deal? Are the former developers leveraging their way in by forcing this deal which might allow them to recover their ownership of some of their companies? Man I wish there were some government agency to call to investigate this whole mess.


4. It would also be great to get a fulsome disclosure about P2P merger with VI last year. What portion of the members of that group converted (10%? 30%? 50%?). What was the total value of the assets acquired by VI? I don't know many details, but for our ARC, it looks like VI is getting all of the benefit. More fee paying members (with very high fees) and more assets (at essentially no cost).

5. Fees are currently $7.08 per VI point (2011) which works out to almost ~$0.017 per RCI point (that is really high). Same period 2011-12 at ARC MF are ~$0.014 for the first 30000 and then ~$0.009 for the remainder. Remember - they are not telling the members this up front - I and anyone else who wanted to know ahead of the meeting had to dig it out on the Web.

Thus in 2011 fees for ARC members converting to VI (1 VI point for 420 RCI points) we see:

If you have 30000 RCI points, your maintenance cost will rise from $407 to $506 (a 24% increase)
If you have 60000 RCI points, your maintenance cost will rise from $676 to $1011
If you have 100000 RCI points, your maintenance cost will rise from $1034 to $1685
If you have 150000 RCI points, your maintenance cost will rise from $1487 to $2537 (a 71% increase!)

I also note that VIs maintenance fees have gone up 35 % over the last 10 years, and almost 60% from 99/00-2009/10.


Greg, could you be the one to shed some light on this?

I am especially interested in finding out what we might expect on the other side of the meeting. They won't tell us what the hidden costs are. As a VI member, do you have any idea what the costs for the prestige silver, gold and platinum plans are. Are they included at no cost, is there a one time fee? is there an annual fee?

I understand that there may be variations, but what is typical? What might be the cost of the Prestige membership (for 100 VI points, for 400 VI points)?


Thanks!

[qb_bc Junior Member Find all posts View Profile Close qb_bc]

There has been a lack of information made available to the members. TPelton007 has discussed this information lack quite well.

In my case, I see only three options;
1) If members want to continue as a time share operation they need to amalgamate with VI.

2) If members wish to wind up operations and try to obtain a residual value for distribution, TPelton007's suggestions have value.

3) If a member simply wants to be done with this operation and walk away from their time share, amalgamation with VI is the option to choose, as the members will be permitted to choose not to join.

I believe that Aviawest Resort Club is in worse financial condition than TPelton007 may have stated. The following is directly from the CCAA filing;

I believe it is safe to assume that $1.9 million of the fees (around 80%) paid by members in 2011 have been lost in the Aviawest bankruptcy. The Club is now existing on the advanced collection of 2012 fees that began in January 2012. This supposition may be supported by the comment made in the letter we received, that VI will treat this money as payment of the 2012 maintenance fee after amalgamation. It will need to be made up, either by VI or a separate assessment.

Reading between the lines of the correspondence, I also suspect the maintenance on the resort has been neglected. We were told that the refurbishment would be spread across all owners of VI.

We do not know the current state of membership. Again, reading between the lines, I feel that many people chose not to make their maintenance payments beginning in January 2012. Are there any units held by the Club (and/or the Developer) and what is the voting status of these units?

If the units are put on the market, will the only entity interested in purchasing them be the one that bids and purchases the building in the bankruptcy sale? The units in Vancouver will only be of interest to the Rosedale Hotel, so we will be dealing with single bidders. The Rosewood in Victoria may draw more interest, but it is smaller with mostly only studio rooms. Legal and realty fees will need to be paid. I can't argue with the estimate for total value that has been given by Tpelton007, as I honestly have no feel for what might be left at the end of the day for distribution.

The Aviawest Club cannot continue without associating with another established club such as VI. Gregg is correct in all that he says. VRI, by the way, is a separate management company hired by VI and it appears that the contact can be terminated by VI if they choose. The biggest impediment that I see preventing ARC from being on their own is being able to sell points that are forfeited back to ARC, and being responsible for the maintenance fees at the same time. Possibly ARC could hire VRI themselves, but who knows what the costs would be under this scenario. ARC would be responsible for the refurbishment costs and restoring the lost funds all on their own under this scenario.

Now for where I sit, I want to unburden myself of this timeshare, not because of any of this Aviawest issue or anything Aviawest, but because I am getting on in age. I do not want any time share with obligations that extend in perpetuity as part of my estate. My daughter does not want it, and cannot afford the maintenance fees. It is my responsibility to see that this does not happen. I have offered the timeshare for free, to anyone that will look after the transfer fee. While I would not object to sharing in the residual if the assets are disposed of, I will support the alternative that provides me with the greatest likelihood that I will be able to unburden myself of these timeshare points. Even if VI takes over ARC, VI points appear reasonably easy to dispose of if priced correctly (FREE).

I will still continue to own timeshares, but they are right to use and in my contract they assess a maintenance fee only if I elect to use it in a given year. I paid for this privilege (probably too much), but my reward is knowing that my estate and daughter will not be saddled with figuring out how to dispose of it.

[Emerald Girl Junior Member Find all posts View Profile Close Emerald Girl]

AviaWest Merger With VI - Emphatic "No" Vote

Hi,

My husband and I own 40,000 points in the AviaWest Resort Club. We, like you, received a ballot to approve/disapprove a reconveyance of our deeded interests in Pacific Shores to Vacation Internationale.

We've made three attempts to gleen information from the current board regarding this reconveyance and the meeting on March 11, 2012. Some of our questions have been answered, many have not.

Fortunately I saw this forum post. I truly hope others in our same boat will read what they can find on the internet and on this and other forums so that they can make an INFORMED decision regarding the proposed reconveyance vote.

We are instructing our proxy, Kate Britton, to cast an emphatic "NO" vote. This decision was reached after having to scour the internet to pick the fly sh*t out of the pepper! lol Apparently "buyer beware" is in full effect with this proposed deal.

Below is what we found. We're sharing it with this forum so the folks who do, prayfully, find their way here understand what they may be getting themselves into by voting "yes" with the Board.

Here's a link to some information that VI has put out to help people understand a little more about point to point conversions. Please realize that this may not tell the whole story (again buyer beware). It is, however, more information then we've been able to obtain from Aviawest's Board after three attempts.

Point To Point FAQ | Vacation Internationale

The following link is to the Better Business Bureau. Vacation Internationale receives a "F" rating:

Vacation Internationale Inc Business Review in Bellevue, WA - Alaska, Oregon and Western Washington BBB

On a separate but related note, here's some additional information that Aviawest Resort Club owners might be interested in reviewing:

Aviawest Resorts Inc. Business Review in Victoria, BC - BBB

Grant Thornton LLP in Canada | Aviawest Group


Not sure where we go from here. We don't want to relinquish our Aviawest points interests, reconvey our points interest to Vacation Internationale, and we most-definitely can't sell right now because of the CCAA and/or litigation occuring. We'd be happy to vote "yes" to scrutinized liquidation. All in favor?

Hope this information has been helpful, Peeps! God's speed.