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Excel Resorts

Start the Week

Welcome to Start the Week and our countdown to the Christmas break, we begin this morning with news from the Spanish Courts.

This morning Inside Timeshare has received the following information regarding our old friends Silverpoint, this company is certainly taking a bashing in the courts, contrary to what some might have you believe.

The other breaking news is there has also been another ruling from the Supreme Court, making 130 in total against the timeshare industry, the company on the receiving end is Diamond Resorts.

On Thursday 13 December in the Court of First Instance No 5, Arona Tenerife, Silverpoint were once again found to be in breach of the Spanish Timeshare Laws 42/98 and 4/12, in respect of their product called “Company Participations”.

As we have reported on many occasions this scheme was designed to bypass the current timeshare legislation, instead of purchasing weeks in an apartment the unwary consumer is sold “participations” in apartments which are “registered” as companies. These companies are administered by Silverpoint and Excel Resorts, with the purchaser believing they are “investing” in a “company”. The terms of the contract are complex, with purchaser having no rights to know who the other participants (share holders) are, they also have no right to use the apartments they have purchased these in these “participations”, but are given weeks they may use in other apartments and resorts.

As with the old Silverpoint scheme of “investment weeks”, purchasers are promised a variety of incentives, these are in the form of “dividends” paid each year for the rental income of the “participations” they have purchased, unfortunately many are still waiting to receive them. They also then have the option after 3 years to “sell” their “participations”, but not on the open market, they can only be “sold” to other participants, but only through Silverpoint who will broker the sale.

In the latest sentence, the judge has clearly stated that these “Company Participations” contracts are a blatant disguise of a timeshare product.

The sentence also states and reiterates the ruling from the Supreme Court (STS16/2012 of 16 January) that these purchasers are indeed Consumers and not investors. (Page 2 of the sentence PDF below)

Silverpoint Sentence 13 Dec

The court declared the contract null and void and ordered Silverpoint to return the full purchase prices plus double the deposit paid, a sum of over 108,000€.

The courts have also place another 3 embargoes on Silverpoint accounts securing over 130,000€ for clients who have been awarded their money back.

The Supreme Court has issued their 130th ruling against the timeshare industry, the very first against Diamond Resorts!

The court has upheld previous rulings that the points system is illegal, along with the perpetuity contract which contravenes the maximum duration of 50 years as demanded by law.

Diamond Supreme Court 11 Dec

Although the amounts awarded are not substantial, this ruling now proves that even Diamond are not immune from being prosecuted under Spanish Law.

Both of these cases have been brought on behalf of clients by Canarian Legal Alliance, the leaders in the field of timeshare litigation.

In other news, it has been announced that the CEO of the American Resorts Development Association (ARDA), Howard Nusbaum is to retire in 2019. The board of directors has appointed a committee to search for a new CEO, the members will be working alongside a leading executive search company Spencer Stuart, who will be managing the process.

Whoever is appointed will certainly have a lot on their plate, the timeshare industry is in dire need of a thorough shake up, so let us hope that the new CEO will have the guts to make sure their members start to treat consumers in a better way than we are seeing at the moment.

So that’s it for today, if you require any information on any of the articles published, companies that have contacted you or would like to know where you stand in regards to your purchaes of any timeshare product, especially the “company participations” from Silverpoint, then use our contact page and we will get back to you.

Silverpoint: Company Participations is Timeshare

A few years ago Silverpoint changed their usual “investment” packs  into “The Company Participation Scheme”. This is where the clients are then sold “participations” (not shares), in “registered” companies. These are actually apartments that are registered as companies with names like “Palm Beach 112”, using the names of the resorts along with a number, (possibly the apartment).

Once again like the “investment” weeks the whole point is to dodge the strict timeshare laws, which at first Silverpoint were successful in doing so. They actually fooled the courts in the early days that the purchasers were not buying timeshare but were investing in property. Eventually the Supreme Court ruled that these clients were buying timeshare and were not investors, therefore they had the full protection of the timeshare laws.

Since that first ruling Silverpoint has been on the receiving end of many court cases, almost on a daily basis, with the court’s finding for the clients. This is costing Silverpoint hundreds of thousands of pounds.

In a new and unprecedented case these “Participations” have been shown to be what they are, timeshare by another name, or what we at Inside timeshare would call a “Pig in a Dress”.

Company Participations “Pig in a Dress”

It all revolves around a case brought by Canarian Legal Alliance on behalf of clients at the Juzgado De Primera Instancia No2 in Arona Tenerife, (Court of First Instance), on the 20 November 2018.

In this pre-trial hearing, which is usually a precursor to a full trial, something very extraordinary took place, before the Judge, Dña Lara Etelvina López Jiménez, Silverpoint and their legal team admitted that the “Company Participations” are indeed “TIMESHARE”!

This admission is going to have a very profound effect on all pending cases, it also opens the gates for many more “victims” to come forward and place claims against Silverpoint, not just to be reimbursed with their “INVESTMENT” but also have the contract declared null and void.

Judge Lara Etelvina López Jiménez decided on this admission that there was no need for a full trial to take place and closed the proceedings issuing her judgement and sentence within days of the case.

She ordered that the contract be declared null and void with the return to the client of 81,700€ including legal interest and fees. (Click on the PDF to see the court document).

Silverpoint_Company_Participation_Sentence_1_instance

The client was represented by the CLA Team of lawyer Miguel Ángel Méllian Santana and Procurador Buenaventura Alfonso Gonzalez.

Miguel Ángel Méllian Santana

 

 

 

 

 

 

 

 

 

So what exactly is this “Company Participation”?

Well, it is a rather sophisticated scheme designed as we said to circumvent the timeshare laws, “Participants” purchase a number of participations in the companies, which are actually the apartments registered as companies. The idea is they will receive a “rental” income with a yearly dividend of about 4% of the income rental. They are also should be able after 3 years to “sell” their participations, the only thing as we have found out from one of our readers is that they can only be sold to other participants. One slight problem here, they don’t know who they are and have no way of finding out, but according to our readers information, Silverpoint will approach them with the sale!

Attached to these “participations” are also holiday weeks which the “investor” is able to use, which does put them into the realms of timeshare.

Now as far as the “dividends” are concerned, some have received them in the first couple of years of “investing”, but as we are increasingly finding out most are now way behind on receiving them for this year.

The reason is that Silverpoint and Excel Resorts, who are the managing company of the resorts themselves have had a very severe falling out, with Silverpoint losing all marketing rights. So when these “investors” enquire and complain that they have not received their dividends for this year, they are told by Excel that they are waiting for Silverpoint to pay them.

When the “investor” makes further complaints and threatens legal action, it appears that Excel pays them the dividend, the only thing is it is with the “investors” own money which they have paid for the “participations”. I don’t know about you, but to me this looks like the classic “Ponzi scheme”!

What is a Ponzi Scheme?

Here is a simple explanation.

A Ponzi scheme (/Ponzi/ also a Ponzi game) is a form of fraud which lures investors and pays profits to earlier investors by using funds obtained from more recent investors. Investors may be led to believe that the profits are coming from product sales, or other means, and remain unaware that other investors are the source of profits. A Ponzi scheme is able to maintain the illusion of a sustainable business as long as there continues to be new investors willing to contribute new funds and most of the investors do not demand full repayment and are willing to believe in the non-existent assets that they are purported to own. (It is also known as a Pyramid Scheme).

It is actually named after Charles Ponzi who became notorious for exploiting it in the 1920’s, it also has roots in literature, being used in two Charles Dickens novels Martin Chuzzlewit (1844) and Little Dorrit (1857).

In further developments it has also come to our attention that Diana Aitchison, Chief Operating officer for Mark Cushway at Silverpoint, has recently parted company with Silverpoint, she is apparently now in the reservations department of Excel Resorts and Hotels.

This does indeed acknowledges a huge split between the two companies, one problem which Excel will have with the move of Diana Aitchison, is the fact that she signed off many of these “participations” for Silverpoint. This along with the fact that Excel is listed as “Sole Administrator” for these “registered” companies indeed shows a legal link which will only help those future cases.

We will bring you further information as we get it, but for now this recent development is going to please many of those who “INVESTED” in this scheme.

Have you been a victim of this or a similar “timeshare” scheme?

Have you been a victim of Resort Properties / Silverpoint and want to know the way forward?

If so use our contact page and let us know, Inside Timeshare will explain what your options are and point you in the right direction. You have rights under Spanish law for redress, don’t lose out on your chance to regain your hard earned money and have the contracts declared null and void.

Mid Week News

Inside Timeshare has received information from one of our readers involving Silverpoint in Tenerife, it is to do with the so-called “Company Participation” scheme they have been selling.

In this scheme, the clients for considerable amounts of money, in many cases in excess of more than 150,000€, clients purchase not shares but “participations” in companies set up to hold “freehold” apartments, which will then be rented out by Excel Resorts. (Allegedly).

Having seen the documents for this scheme, it doesn’t leave much to the imagination that they are not in the best interest of the clients.

This reader has been contacted by Ali Farhoud one of Silverpoints sales people by email, in this he tells the client what we already know, that Excel Resort Management have cancelled the rental contract with Silverpoint.

This does look like Silverpoint are no longer in a position to generate a sufficient rental income to satisfy their contractual promise to their clients who have purchased the participation scheme.

Apparently Mr Farhoud told our reader that he had helped clients sell their apartments with genuine sales companies. But he also added that many companies had said that the apartments with leases concluded with Excel were not saleable.

He has taken on the services of a lawyer, (we wonder if it is the same one Silverpoint use), on behalf of the clients and that the necessary Power of Attorney was being sought from the clients.

Having studied this scheme and reading the documentation, it is Inside Timeshares opinion that extreme caution should be exercised before signing any power of attorney. Do not rely on any lawyer appointed on your behalf, as with any business or property transaction you should always engage your own independent legal advice.

The Court of First Instance No 2, in Maspalomas, Gran Canaria, has just issued the following sentence. Anfi have been ordered to repay one of their clients a total of 70,000€ plus legal interest, with the contract being declared null and void. The infringement of the law in this particular case is the length of the contract, it was one in perpetuity, when the law only allows for a maximum period of 50 years.

If you have any questions or concerns regarding any part of this article, or would like to know where you stand with any product purchased, then use the contact page and get in touch.

Have you been called or found a company on the internet and want to know if they are genuine, then contact Inside Timeshare and we will point you in the right direction.