Updates for Timeshare Owners at David Walley’s Hot Springs Resort and Spa Timeshare

When Celebrity Resorts timeshares filed Chapter 11 bankruptcy earlier this year, it left many timeshare owners wondering what the future holds for them. (See earlier The Timeshare Authority blog post: David Walley’s Hot Springs Resort and Spa Timeshare Updates to Timeshare Owners).

On a website established by the Board of Directors for the David Walley’s Resort Property Owners’ Association, the BOD states that it believes that the resort is both worth saving because it is unique and that it realistically can be save. The Board explains: “Quintus and the lender on the resort still have a vested interest in turning things around, so they are assisting the Board and advancing funds as approved by the Board.”

Additionally, the Board reports that new managers are considering lending money to the POA to get it through 2010; that many timeshare owners are prepaying special assessments; and other timeshare owners who have been holding back on payments are now making them—all of which contributes to cash flow during this challenge.

Timeshare Property Owners Settlement Agreement Summary

Here’s a partial summary of the terms of the recent Settlement Agreement:

1. Celebrity will no longer be managing the POA (Timeshare Property Owners Association).
2. Celebrity will sell the restaurant, spa building, parking lots, deli, grounds, and pool areas (“Real Estate”) to Quintus for $2.325 million. As part of purchase, Quintus will assume $1.825 million in debt that is in default.
3. Quintus will grant the POA a 25-month option to purchase the Real Estate at Quintus’ cost with no markup of the price.
4. Quintus cancels $265k note due from Celebrity and drops lawsuit.
5. POA drops lawsuit against Celebrity for “disputed funds”.
6. Celebrity drops any counter claims against POA and/or Quintus.
7. Celebrity continues to operate the reservation line for timeshare owners and reopens the reservation line for nightly rentals. In exchange, Celebrity gets to rent “unused, unreserved” weeks and Quintus-owned weeks for its own account. Celebrity will pay housekeeping charges for its rentals at a set rate and 50 percent of front desk costs. Unused, unreserved weeks can only be booked 45-days in advance.
8. Celebrity will release the POA cash accounts to the POA, and assign the dues servicing (billing) agreement to the POA.
9. Celebrity will provide all books and records to POA.
10. Quintus to manage POA until new manager can be found for a fixed monthly fee approximately 1/3 of what Celebrity was charging to the POA. The monthly fee will be all-inclusive with no other cost allocations. The Board can terminate Quintus and bring in a new manager on 3-days notice.
11. POA will fund costs to operate spa for rest of 2010 (Quintus will be responsible for debt in default). Unless the POA exercises its purchase option, beginning 1/1/2011 Quintus will fund all spa expense and pay debt service, and the POA will pay Quintus the annual “club dues.”
12. The “Facilities Use Agreement will be amend to provide for quarterly payments of “club dues” and to clarify the calculation of the fee, which should reduce the fee payable for 2011 by over $130,000 or 17 percent. If the POA buys the Real Estate, this agreement shall terminate.
13. Quintus will begin work immediately to reopen the restaurant. The POA will give Quintus the right to lease the restaurant for a share of the profits, if it buys the Real Estate.

You can learn more at the timeshare property owner’s association website. And for additional information on how to buy, rent or sell timeshare at David Walleys Hot Springs Resort and Spa timeshare, visit Sell My Timeshare NOW.