What Happens if A Timeshare Company Such as Diamond Goes Bankrupt?

[thunderball027 Junior Member Find all posts View Profile Close thunderball027]

Hello,

So with the downturn in the economy, what happens if any of the timeshare companies, let's use Diamond for example, goes bankrupt? What happens to our fractional interests in the properties and any additional points we have purchased?

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Someone else takes over as resort manager and you continue as always. There will be no disruption in service as the bankrupcy filing will protect the assets against creditors. The reservation systems would be sold off to another management company or resort developer so that operations could continue.

If the company goes chapter 7 liquidation, this would still be the case as the resort management assets would have value to some company. When they are sold off, the creditors get the proceeds according to their place in line to be paid.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

All you have to do is a google search to find out what happened when Epic and Sunterra filed for bankruptcy. I partly depends on what sort of bankruptcy is filed. Sometimes, as with what Consolidated is doing right now, it's a liquidation form of bankruptcy. Sometime, as with what Sunterra did once in the past, it's to reorganize debt.

There have been a few bankruptcy filings through the years. It's very rare that a timeshare stops funcitoning all together. There are different cases for developer bankruptcy and when an HOA of a timeshare actually bankrupts the timeshare they're in charge of running. There have been a few timeshares that, thanks to the mismanagement of the HOA/BOD, have stopped operation. What is now Summer Bay, formerly Ramada, in Las Vegas came pretty close. There was recently an article on a small timeshare in the northeast the stopped operations and closed it's doors but, I don't recall the name.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

After a couple of bankruptcies they change their name and start again- at least that's how Sunterra got to be Diamond.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

After a couple of bankruptcies they change their name and start again- at least that's how Sunterra got to be Diamond.

Sunterra didn't change it's name, it went out of business. Diamond resorts was around LONG before Sunterra took it's final swan dive. We've been owners with Diamond since 1998. Diamond was the original developer for Jockey Club in Las Vegas.

Sunterra did not just change it's name. It was purchased by another developer after it failed.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

So---when is the next bankruptcy ?

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

I wouldn't worry about Diamond going bankrupt anytime soon. There is just too much asset stripping they can do, and have already started. Closing and selling their Carlton Court resort in London, I am sure netting them a pretty penny, and it appears that Wychnor Park may be next to go.

[timeos2 Senior Member Find all posts View Profile Close timeos2]

Use it to the Association advantage

All you have to do is a google search to find out what happened when Epic and Sunterra filed for bankruptcy. I partly depends on what sort of bankruptcy is filed. Sometimes, as with what Consolidated is doing right now, it's a liquidation form of bankruptcy. Sometime, as with what Sunterra did once in the past, it's to reorganize debt.

There have been a few bankruptcy filings through the years. It's very rare that a timeshare stops funcitoning all together. There are different cases for developer bankruptcy and when an HOA of a timeshare actually bankrupts the timeshare they're in charge of running. There have been a few timeshares that, thanks to the mismanagement of the HOA/BOD, have stopped operation. What is now Summer Bay, formerly Ramada, in Las Vegas came pretty close. There was recently an article on a small timeshare in the northeast the stopped operations and closed it's doors but, I don't recall the name.

And if things really fall the owners way the opportunity that a bankruptcy of a developer represents will be used to wrest owner control over the resort. In at least two cases I know of it was developer bankruptcy's that helped open the door to owner take overs and installation of an independent Management (vs one owned/operated by the Developer) that gave the owners of the resorts the upper hand. It was a great outcome for the owners and reduced the Developer to a very limited presence strictly for sales. Hope for the best!

[Bill4728 Super Moderator Find all posts View Profile Close Bill4728]

THe problem comes when the developer owns a big portion of the weeks. Bankruptcy can close a single resort or two but generally not a big company. ( it happened a short time ago to a couple of Cape cod TSs. )

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

I went through one bankruptcy and one take-over, after purchasing my first week from Sunterra. Nothing has happened. If I didn't read newspaper or come to this site, I would not have noticed the change of ownership. Everything just remains the same.

Since I have a deed, the worst scenario is I Keep my fixed week, but not Diamonds ownership. I don't know about the points program though.

I bet given the size of Diamonds, someone will always want to buy it.

[1950bing Senior Member Find all posts View Profile Close 1950bing]

Could be S.O.L.