Tropic Leisure Club at Magens Point Resort Bankruptcy

[SMM53 Junior Member Find all posts View Profile Close SMM53]

We have an annual use timeshare at Tropic Leisure Club at Magens Point Resort in St Thomas. We were notified that they have filed bankruptcy and owe creditors close to a million dollars. They have levied special assessments on owners and I have been told many owners are not paying their maintenance fees. Owners that do pay their maintenance fees are being forced to pay for those who don't pay through higher maintenance fees.

Does anyone know what's going on with the bankruptcy (Chapter 11) and whether owners have any legal obligation to pay special assessments and increased maintenance for others who do not pay their fees?

[The Gatekeeper Junior Member Find all posts View Profile Close The Gatekeeper]

I have a partial answer for you. I write the blog "The GateHouse" for the timeshare news website InsideTheGate.com and I was asked about this yesterday. By coincidence I have been researching the Magens Point bankruptcy for a future article, and this is what I told the person who emailed me for information:

According to court records, the Chapter 11 was dismissed, without prejudice, on Sept. 12. As best as I can determine at this time (not being a lawyer) this means that everything goes back to square one for everyone, as though the Chapter 11 had never been filed.

Per a legal site I visited: The dismissal of a bankruptcy case ends it, including most of the legal consequences of the bankruptcy filing, but without giving the debtor a discharge of its debts. The debtor and his bankruptcy estate are released from bankruptcy, the automatic stay is ended, and the creditors are free to pursue their collection remedies outside of bankruptcy.

As you probably know, a Chapter 11 trustee (Adam Hoover) was appointed to continue operations (including the timeshare operations) rather than leave it in the hands of Magens Point Inc. In his motion to have the case dismissed, the trustee wrote this:

7. The chapter 11 trustee determined that the debtor’s operations could not be operated profitably and that he cannot file a confirmable plan of reorganization.
8. The chapter 11 trustee advised the United States Trustee that there is no possibility that the chapter 11 trustee or the debtor will be able to file a confirmable plan of reorganization.
9. The chapter 11 trustee advised the United States Trustee that he consents and supports this motion to dismiss this chapter 11 case.

In the trustee's final operating report for the court (on September 28), the first question asked in the questionnaire was: Is the business still operating? Hoover checked the box that said "No".

I'm still researching and I have no idea at this point what Magens Point Inc and/or its debtors intend to do, but perhaps this will be somewhat helpful to you. Good luck!

The Gatekeeper

I hope this is helpful to you, too.

[SMM53 Junior Member Find all posts View Profile Close SMM53]

Thank you. When will your article publish?

[The Gatekeeper Junior Member Find all posts View Profile Close The Gatekeeper]

Thank you. When will your article publish?

Hopefully on Sat. Nov. 9, but it depends partly on if I can get anyone from the resort or attorneys' offices to respond to my questions. If I can't I may just have to go with what I've got so far.

[The Gatekeeper Junior Member Find all posts View Profile Close The Gatekeeper]

The blog post on Magens Point BK has been published. It's too long to post here, so I hope I'm not breaking any rules by posting a link to it. I hope it's helpful to you.

http://www.insidethegate.com/gatehou...vember-9-2013/

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

Do you know who the resort attorney is? Curious as own a ts on STT, not this one though.

Hopefully on Sat. Nov. 9, but it depends partly on if I can get anyone from the resort or attorneys' offices to respond to my questions. If I can't I may just have to go with what I've got so far.

[The Gatekeeper Junior Member Find all posts View Profile Close The Gatekeeper]

Do you know who the resort attorney is? Curious as own a ts on STT, not this one though.

The attorney representing the resort was Benjamin A. Currence, Esq. It appears he's quite a busy lawyer in Charlotte Amalie.

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

http://www.insidethegate.com/gatehou...vember-9-2013/

It says "...“go green” with solar installations on the property..."

Wanted to add that heard it said the USVI utility WAPA fought the solar installation at Bluebeard's Castle. The Castle now has solar and is reported to be saving substantially which it needs to do to off set the cost.

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

Tropic Leisure Club recently hired a collection agency to collect maintenance fees and assessments. Magens Point filed a Chapter 11 proceeding on 9/12/12 but it is not clear if the proceeding was dismissed or not. In Magen's filing they disclosed that Magen's owed Tropic Leisure Club $84,415.50 indicating that Magen's has been diverting substantial amounts of cash from Tropic Leisure. That means that Tropic Leisure was being forced to pay for the debts of Magen's with the maintenance fees and assessments which seems unreasonable. Inasmuch as Mr. Shelby controls both operations it appears that Tropic Leisure owners are being taken advantage of for the benefit of Magen's.

[SMM53 Junior Member Find all posts View Profile Close SMM53]

Hmm. That seems like an unlawful trade practice.

Tropic Leisure Club recently hired a collection agency to collect maintenance fees and assessments. Magens Point filed a Chapter 11 proceeding on 9/12/12 but it is not clear if the proceeding was dismissed or not. In Magen's filing they disclosed that Magen's owed Tropic Leisure Club $84,415.50 indicating that Magen's has been diverting substantial amounts of cash from Tropic Leisure. That means that Tropic Leisure was being forced to pay for the debts of Magen's with the maintenance fees and assessments which seems unreasonable. Inasmuch as Mr. Shelby controls both operations it appears that Tropic Leisure owners are being taken advantage of for the benefit of Magen's.

That seems like a violation of consumer protection laws. I would think it would be difficult to force Tropic Leisure owners to pay for maintenance fees they did not owe. The use of a collection service to further badger owners is unconscionable. The owners should be reimbursed for the monies they were improperly assessed.

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

Equivest/Wyndham did something similar with Bluebeards, took Castle HOA monies to pay for expenses at a sister resort, owners organized/ran for the boards and won. They then discovered more with the help of a forensic accountant, they sued and won in 2008 ....... but it wasn't easy.

Tropic Leisure Club recently hired a collection agency to collect maintenance fees and assessments. Magens Point filed a Chapter 11 proceeding on 9/12/12 but it is not clear if the proceeding was dismissed or not. In Magen's filing they disclosed that Magen's owed Tropic Leisure Club $84,415.50 indicating that Magen's has been diverting substantial amounts of cash from Tropic Leisure. That means that Tropic Leisure was being forced to pay for the debts of Magen's with the maintenance fees and assessments which seems unreasonable. Inasmuch as Mr. Shelby controls both operations it appears that Tropic Leisure owners are being taken advantage of for the benefit of Magen's.