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”.
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).
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 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.