Aviawest/Crelogix bankruptcy merged thread

[deejay43 Junior Member Find all posts View Profile Close deejay43]

We purchased 60,000 points in August 2011 after being referred to the resort by our daughter and son-in-law after they had purchased a like amount in July 2012. My research on the internet brought up no red flags about Aviawest so we proceeded with our purchase.
During the presentation I did ask the salesperson to explain why Parkside (the cause of all this grief) had taken so long to complete. The reason given was that complications had arisen from the Platinum LEEDS construction designation aspired to by the developers. Having been familiar with LEEDS requirements (Platinum being the most stringent) I took the sales person at his word. It is now obvious that this was a huge lie but I would not be too quick to blame the individual who sold us this worthless boat anchor. The responsibility lies at the feet of the developers and the ARG Board of Directors.
In light of the information found on Grant Thornton's website regarding the timeline when ARG began to default on its interest payments, anyone who purchased points through 2010 and 2011 and even the latter part of 2009 may well have the basis for a civil suit. The growing insolvency was kept out of the public domain and was certainly not divulged during presentations for the timeshare club nor the fractional ownership. This constitutes breach of trust at the very least if not outright fraud but both would be difficult to prove, costly to litigate and unlikely to produce any benefit to the likes of ourselves and others in the same boat.

[sheila7 Junior Member Find all posts View Profile Close sheila7]

Has anyone audited the company to see where the money has gone?

As an aviawest owner for many years I would like to know if anyone has audited the business and what that shows. I would like to know how we get more detailed information on where the funding and maintenance fees. Can we get a financial report for the last 5 years to see where all our money has gone? I will probably be taking the VI deal but only because I don't want to loose everything. I would like more mediation and consultation and disclosure for us as owners. We have the right to know all of the details in the upcoming deal and even VI is not telling us anything. I would like to know if anyone has a family member or friend who would consult with us to get to the bottom of this. I am in Ontairo now but I don't feel that they can just force us to accept the deal without telling us more. Fraud, skimming, where did all the money go.....we have a right to know. I am not saying it is illegal but we need to find out.

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

A message from Intrawest Resort Club Group

Dear Aviawest Resort Club Members

There appears to be much speculation on the timeshare forums regarding the interest of other timeshare company’s in Aviawest Resort Club. Please be advised that Intrawest Resort Club Group, the exclusive manager of Club Intrawest, has provided a reasoned and compelling offer to manage Aviawest Resort Club on terms substantially the same as the existing management contract. This offer would not involve a merger with Club Intrawest and would allow you to maintain your existing Club and enjoy enhanced benefits of an affiliation with Intrawest Resort Club Group. Intrawest you received an email from the president of the board of directors this morning confirming that the board does not want to pursue the Intrawest offer and confirmed that the initial invitation to attend the meeting this Sunday was withdrawn.

If you are interested in learning more about Intrawest Resort Club Group’s proposal, please contact your board of directors, who were presented with a copy of our offer.

Intrawest Resort Club Group

[djyamyam Senior Member Find all posts View Profile Close djyamyam]

Well, I guess I was right. Intrawest was/is an interested party. I'm not surprised.

So for all you Aviawest owners, if you want choice, then you need to see if someone is able to make a motion and get is seconded and approved as an agenda item to be voted on at the SGM to have your board provide information about the Intrawest offer or potentially delay the VI vote. ie. What you need to do is look at your bylaws/master declaration documents to see what is the protocol to introduce a motion at the SGM - is there one?


It sounds like the March 15 meeting is to dissolve the ARC and merge with VI. In the event there is a vote to stay the decision and to entertain looking at Intrawest, I would raise the caveat of whether or not the Club would still be able to exist (ie. financially). Would Intrawest be able to step in right away, because that's what would have to happen.

Based on the above post or Intawest proposing to take on management of the Club under similar terms of the current agreement, I would strongly suggest that a few different things be looked at very closely or tweaked before anything is agreed to:

1. Voting rights of class A and B and the disparity between the two - would Instrawest take on the definition of "developer"? - I would try and eliminate that wording

2. What is the current management fee? Is it a flat dollar amount or a percentage of overall revenue? Most original developer contracts are based on a percentage and that is something I would suggest be changed.

3. What is the length of the management contract and what are the provisions for either party to end the agreement? Again, many of the developer based management contracts have an automatic renewal clause and some stringent guidelines that need to be met by the contracting party to get out of the agreement.

These same three points should be asked about the VI agreement as well that is being recommended by the ARC board. I'd be careful if the proposed VI offer has significant restrictions on these key areas.

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

Nanaimo meeting

Can someone please let me know where the Nanaimo meeting is to be held and at what time.

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

Please let's ask the board about the other offers

I am just now aware that the board has received another offer that would allow us to remain as Aviawest Resort Club with a new manager. That may give us another choice to consider and ask questions about.
If I interpreted what I read correctly this was a bit of an analysis for individuals to consider in the decision making process.
The other offer means we will still have a say over the same properties we are so fond of. We will be able to continue exchanging through RCI. They asked us to pay $160 each but not to be a member somewhere else but to put that into our funds to make up part of our shortfall . That would be $672,000. They are willing to put $400,000 toward that fund. That would mean we would have to come up with approximately $878,000, if we want to make up the amount owing to us from Aviawest Resorts Inc, if we take $1,950,00, from the Interim Monitors First Report. On a per member assessment that would be $209/each, one time. It would be a different amount per member if this amount was calculated using percentage points vs per member. There is no commitment to upgrade units from this offer and we don’t show any provision for refurbishments listed on our Financial Statements in the Assets section. I do not have any information on what requirements for refurbishment we are facing. Any increase in maintenance fees would be decided by us as in the past.
I worked out how this compares with VI and this is what I came up with.
VI conversion fee $140
Approximate maintenance increase based on conversion of our 46,000 points (46,000/420 = 109.50 109.50 X $7.18) less current maintenance fees excluding HST $235/yr

An annual increase of 42.8%/ year.
They will handle our refurbishments for us.
I'm sure to this but lets get to the meeting and ask question so we can make an informed decision.

[LCSP-BH Junior Member Find all posts View Profile Close LCSP-BH]

(LCSP)-Let Common Sense Prevail; I too am a member of the ARC and have been for several years. I'm not pleased about the lack of communication or the nonexistent flow of information which could help us make a decision whether a merge with VI is in the best interest of our club. The Board of Directors have acted irresponsibly; they have fallen short on this account in my opinion. How is one to make an informed decision on whether this merge with VI is acceptable? Tomorrow my intentions are to attend the meeting scheduled for Saturday, March 10th in Nanaimo. If they are unable or unwilling to answers my questions or cannot provide me with the information I feel is necessary for me to make a decision my vote will be ``NO``. How can one vote YES to something when you do not have enough information to make an informed decision? For those of you that are unable to attend the meeting either in Nanaimo or Victoria and have not obtained the information you feel you require so you can make an informed decision I would urge you to vote NO on your proxy and state the reason why. If it is for lack of information, I'm sure a majority No vote would not kill this deal if it is a good deal. I'm sure they would be forthcoming with information if that is all that was preventing this from going through. The other way of looking at it, if it kills the deal then we probably don't want it anyway. These are my personal thoughts on how I'm going to base my decision on how to vote for March 11th proxy vote. All the best to the rest of you out there trying to making a decision on how to vote.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

[Moderator Note: All three Aviawest/Crelogix/VI threads merged.]

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

Lots of questions I hope we get answers soon.

As I continue to research more I keep getting more questions. I have posed these questions which I hope to get answers for this weekend but wonder if there is enough time for answers to actually be forthcoming.
Questions:
How much does Aviawest Resorts Inc owe us in maintenance fees? How much are they paid in advance on management fees? Are the points they have held with us default on loans, unsold units or a combination of both? How many points belong to them and how will these points get removed from inventory from the club upon default?
On the Interim Monitors Statement it does not show maintenance fees in arrears with Aviawest Resort Club, how does that stop them from voting if fees came due Jan 1,2012 and rights are lost after 90 Days according a document I have?
Answers
The default is not of membership fees as much as it is the failure of ARI to be able to honor the prepayment agreement, while in CCAA protection. Whether ARI is successful or unsuccessful in their attempt to restructure we need to have a manager for our Club.

VI has offered to credit our members fee against the annual fee in July and to refurbish our resorts without special assessments. These are crucial financial concerns for all of us.
Unanswered Questions:
What is the most attractive part of the VI offer over other offers received?
If we merge with Vacation Internationale do they have the right to shift our ownership to other vacation resorts, consolidate and sell off parts of our existing club thus removing them from VI group?
Do we as owners of Aviawest Resort Club have the ability to consolidate and sell off some of the units within the Aviawest Resorts Club(ie all the delinquent ownerships returned to the club)? Will we still have the ability to do so if we merge with VI? Would that be any different with the management company offer(s) presented to the board?
Why don't we have a contingency fund as part of budget for Aviawest Resort Club? If we stick together as a group and choose to work with another management company how much of a contingency fund would we need for refurbishments?
Assuming we will likely experience a 35% increase as Vacation Internationale members (I have calculated a 42.9% increase to our fees)would that same increase more than cover our need for refurbishment funding and for how long?
Has the board actually looked at the ratings of VI Resorts in RCI? Are they aware how many are gold Crown or Silver Crown?

[sheila7 Junior Member Find all posts View Profile Close sheila7]

I am going to say yes and see what happens with the merger. I have come to this conclusion only by a lot of research and reading. If you look into the Aviawest owners site you find terrible accounting information. I do know that the judge rules on the 20th of March regarding the 1st round of protection and creditor issues. Our conversion is rumoured to cost less than 160$$ US and they have no booking or housekeeping fees. Our current RCI points (I have $40,000 will be converted to VI points if I want if not I will still be able to book thru RCI and pay the extra Fees.) Our maintenance fees may go up a little but I am willing to take that risk to see my children still be able to take a vacation as the years go on. Even at 600 per year my first vacation would cost but a second or third would only cost housekeeping and booking fee. We all have a choice. I choose not to loose my shirt and see what happens. Yes there are lots of other points for next to nothing but then u are paying more again and who knows how stable their company is??? We have a choice. Options may not be given so I am gonna cover my butt now to say yes and see what happens.....

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

More questions

Do we know the financial situation of VI Inc?
Do we know the financial situation of other offers?
Looking at the web it seems Intrawest had their problems a few years ago? How did they resolve that? Is that why they have a $12million refurbishment fund?
So sorry I could not make the meeting in Nanaimo today I hope someone will post a report on the club site or on this forum. Fortunately we will be at the meeting tomorrow.
Diane

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

Based on the above comments I think there are a couple of issues that people should keep separate to avoid confusion.

Vacation Internationale (VI) does not operate or manage any resorts. VI is essentially a resort club - like Aviawest - that owns properties which are held in trust for the trust owners. If I understand the deal correctly, Aviawest owners who convert to VI will wind up with a beneficial interest in the VI trust.

VI has contracted with Vacation Resorts International (VRI) to actually manage the resorts it owns. It can be confusing because the names are so similar, but the two companies have no relationship with each other apart from the fact that VRI manages the VI resorts.

So if there is an offer out from Intrawest to manage the resorts, what that means is that the club stays intact and Intrawest steps in for whomever has been managing the resorts until now. Note that if the Club has operational or liquidity issues bringing Intrawest on board will not address those issues.

********

VRI is the largest independent timeshare resort management firm around - by independent I mean that they are not controlled by a resort developer and their forte is serving resorts that are sold and where there is no longer a significant developer interest. VRI became the manager for VI after VI kicked out Sunterra, a developer/manager that had weaseled it's way in. That event was, IMHO, a classic situation in which a bunch of owners stood up and successfully fought a developer that was weaseling its way in.

Although it's nice to see something from Intrawest, I think that Aviawest owners should also bear in mind that Intrawest is a developer, and a decision to bring Intrawest in to manage is tantamount to giving a developer a foot in the door. I would think long and hard about that, as there is ample opportunity for Intrawest's interests to skew from the overall interests of the owners - as was often the case when Sunterra was managing VI.

Note that it might also be possible for Aviawest board to skip the merger with VI and just contract directly with VRI to manage the resorts.

******

From my little catbird seat outside of this whole affair, it seems to me that one of the key issues is the solvency/liquidity of Aviawest. If the financial situation is such that the whole operation is tottering, just changing managers isn't going to do much.

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

Thanks

All postings, questions and responses are so needed. Thank you everyone that is contributing. Let's keep this going.
Thanks again. All this helps me.

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

Communication avenue...

While I really appreciate the forums as a place to converse I a concerned that most ARC members are out of the loop.

I expect to be voting NO tomorrow as well. The information provided was incomplete and thus I believe that the proxy votes may be invalid.

I also believe that the past and current boards have not acted in our best interests, and believe that the members ought to have an opportunity to discuss their options fully.

In an Attempt to improve communications, and support any action that the members as a group might want to undertake I have set up an email for people to sign up to communicate with other members. The email address is aviawestmembers@gmail.com. Even if all we do with it is pass along a UR tothis site, that would be far better than we have now. I will try to bring some leaflets to pass around tomorrow to get the word out.

questions I would like to know the answers to include:

Why not table the vote for a month, present a series of options ahead of time and allow an open vote after all of the issues have been discussed?

Are the previous or current directors serving the best interrests of the ARC members? Who is checking on this? Are they independent? Shouldn't we be chasing the directors liability insurance down (if it is owed)?

Do the developers retain voting rights if their fees are not paid or if their companies are indebted to ARC?

[deejay43 Junior Member Find all posts View Profile Close deejay43]

It is difficult for any of us to make a decision without knowing all the facts and all the options that have been presented to the ARC board. The board should have been aware of the potential receivership of ARI for several months as the CFO of ARI sat on our board of directors. So, why were the members not put in the loop until late February? Why did the board not advise the members that the conciliatory advice by Jim Pearson in his letter of November 15th was somewhat misleading? Why did the board not keep the club membership advised of the efforts being made to salvage ARC? Why did the board leave the bombshell to the last minute before announcing their resolution to merge with VI? Is the board already in possession of the 15% "Yes" votes by proxy? Does the developer still have Class B shares voting rights and if so, how many shares? Is tomorrow's meeting anything more than a sham in an effort to placate the membership into thinking that our concerns actually matter?
How many are in possession of the Club's bylaws? How do we know if any of the membership will be allowed to speak? If the developers can vote and/or the board has the required 15% "Yes" in its pocket, what are the chances of any member making a motion from the floor? I certainly hope a tsunami of indignation breaks over that meeting tomorrow because we have all been taken for a ride.