After a rather lengthy process, the court-appointed administrator has now completed his review of the Silverpoint liquidation and the news is not good for the company or for several key personnel. Although the report is welcome it appears that the administrator has not included some key points which the lawyers behind the majority of cases against Silverpoint expected.
As we know a few years ago, the CEO of Silverpoint placed the company into voluntary liquidation, at the time it was already suspected that it was a ploy by the myriad of companies under the umbrella of The Limora Group to consolidate as much finance as possible for the family of the late Bob Trotta.
This now seems to have been officially recognised as the administrator has concluded the liquidation could have been avoided, had it not been for the mismanagement by the company directors and key personnel.
During his investigations, the administrator also uncovered a huge range of financial and management irregularities which he believes directly contributed to the collapse of the company. Because of this, he has classified the liquidation as “culpable”, which actually means it was a negligent bankruptcy.
The administrator also made it very clear that those responsible for the negligent bankruptcy are the former CEO Mark Cushway and the former CFO Diana Aitchinson. This obviously does not look good for either of them, there is obviously the possibility of criminal charges being brought against them, for that we shall have to wait and see.
On the role of Kwang Boon Sim, who we reported on in our six-part series Exclusive Breaking News: The Truth Behind Silverpoint Exposed, which lifts the lid on the dealings of The Limora Group and Kwang Boon Sim.
Although Kwang Boon Sim was not an employee or director of Silverpoint it was recognised that there is sufficient evidence that he played a significant and very influential role in the company. Remember Kwang was the financial guru for the late Bob Trotta, the Limora Group (of which Silverpoint is a part), and the heirs of Bob Trotta. (see links below to the full series).
It was also acknowledged by the administrator the existence of some very “dubious” transactions between Silverpoint and Excel, this point was brought to his attention by the leading law firm investigating Silverpoint on behalf of their clients, Canary Legal Alliance. These lawyers have also formally requested that the liquidation of all the other companies of Limora Group should also be investigated, which they believe will increase the overall asset value of the liquidation process.
Even though this report is welcome and is good news for the clients of CLA, they had hoped the administrator had gone further with his investigation. For instance, the administrator has acknowledged the role played by the legal advisors of Silverpoint in this situation but has not held them accountable.
It was also hoped that the corporate veil would be lifted, this would have shown a very well-orchestrated decapitalisation of Silverpoint through other entities such as Excel, Signalia and Inversiones Oasis among others.
We should also point out that from a previous investigation by Social Security, they clearly identified and highlighted the link between all these companies, so it does seem strange that all this has not formed part of the administrator’s report. But it is not over yet.
The State Attorney will study the report in detail and then will make his comments to place before the presiding judge. Along with the criminal report launched by CLA in 2019 for “allegedly” hiding and removal of funds and assets in order to obstruct payments to clients during enforcement procedures. This is known as “frustration of payments” and is in itself a criminal offence.
Further information on this can be found on the following link.
So the tangled web of deceit surrounding Silverpoint and their associates is finally becoming clear, it is also hoped that it will result in criminal charges, and those who are guilty face the full force of justice. For many of those who have been the victims of Silverpoint, it may be some comfort that justice is finally on its way.
We end today with a warning to our readers, with a lot of the news coming out about Silverpoint, there are some very unscrupulous cold-callers who will use this information in a twisted way to tempt you into signing up for termination and claim. Please be aware that even the major law firms and independent lawyers in this field are no longer taking on new Silverpoint cases, if you receive any calls on this subject please use our contact page and let Inside Timeshare know the details.
Welcome to the start of another week with Inside Timeshare, although it will be a short week and looking forward to a welcome break over the Christmas and New Year Period. We begin this week with news which came in late on Friday with another defeat for Anfi at the High Court. We also ask the question of why is the RDO (Resorts Development Organisation) not even acknowledging that their own members are losing in the courts for not abiding by the law let alone the organisation’s code of conduct and ethics?
As we have been seeing time and time again, Anfi is doing their utmost to delay proceedings with their constant appeals to the High Court, causing not just stress for the clients but also creating a huge backlog of cases to be heard by this particular court.
The Court of First Instance of San Bartelomé de Tirajana Number 3, declared the Anfi contract null and void in accordance with all cases they have tried, this is also in accordance with the rulings, of which there are now 131, by the Supreme Court in Madrid. This is Spain’s Highest Court and once they have ruled there is no going back as this is the last port of call for any appeal.
The original sentence issued by the Court of First Instance as well as declaring the contract null and void also ordered Anfi to repay 61,166€ plus Legal Interest. The award was also calculated to include the repayment of double the amounts the client paid within the statutory cooling-off period.
As expected, Anfi once again appealed the ruling to the High Court of Las Palmas. The Judges once again in accordance with past practice and the Supreme Court rulings rejected and dismissed the appeal. They confirmed the original sentence and returned it to the original court for execution of sentence.
No doubt the Lawyers at Canarian Legal Alliance had already placed a “provisional execution of sentence order”, even before the announcement of the appeal. We have come to expect this in every single case.
In this case, the Norwegian client’s case was prepared and presented by Eva Gutierrez with Claims Consultant Michael Gadman assisting the client throughout the procedure.
We now have to ask the question, “Why does the RDO not sanction Anfi and other timeshare operators who are their members, such as Diamond Resorts and Club la Costa?”
Well, the simple answer is the RDO policy of not getting involved in any dispute between their members and timeshare owners. Yet they will pull out all the stops if a non-RDO member does anything remotely wrong.
Is this practice fair for consumers, Inside Timeshare and others think not!
In fact, all the cases we are seeing and also highlighting on these pages are members of the RDO, they also have one thing in common, they are all in breach of one of the main points of the RDO“Code of Conduct and Ethics”.
Part I, Chapter 3, Paragraph 3.5 actually states:
“To comply with all laws, which apply to Member’s, business in the jurisdiction in which the Member operates.”
Now, considering that the Laws of Spain have been ignored by virtually all timeshare resorts and companies since the Law 42/98 came into force on 5 January 1999, surely this is a blatant breach of their rules?
This is not the only breach of the RDO “Code”, Part II of the code, which covers “Principles”, is also being blatantly breached. This covers the way in which timeshare should be sold and relates to the information consumers must receive. It also covers the point that consumers should be given the facts in order that they are able to make “informed purchase decisions when contracting with an RDO Member”.
In Part II of the Code, it is also clearly stated:
2. Sales and Marketing Principles
2.1 RDO Members will in no case mislead a consumer into believing that a product or service has other features and/or benefits than those laid down in the contract.
2.2 RDO Members will in particular ensure:
2.2.1 Appropriate marketing techniques that make it clear what the object of the approach to the consumer is;
2.2.2 Appropriate selling methods that treat the consumer with respect and allow the consumer choice between purchasing and reflection; and
2.2.3. The provision of any necessary assistance to consumers to enable them to make an informed decision.
As we have seen over the years, these principles have been ignored by all the major timeshare resorts and operators. The very worst was by one of the RDO’s former largest contributors, Silverpoint, whose CEO Mark Cushway was also a Director of the RDO!
Silverpoint withdrew from the RDO with Cushway resigning as a Director a few years ago, since then have filed for liquidation following major defeats in the courts regarding the sale of their product “Investment Packs”.
These were groups of weeks and apartments sold with the promise of a rental income and a profit when the weeks were to be put up for resale after 2 years. As we know none of these ever materialised with Silverpoint losing in all cases along with around 50 rulings against them in the Supreme Court.
This particular scheme has been dubbed as one of the biggest frauds in timeshare history, yet what did the RDO say or do about it?
Well, you guessed it, absolutely nothing, even when these consumers made complaints to the RDO their response was what we have come to expect, the RDO does not mediate in any dispute between a member and a consumer. The consumer must take up any complaint directly with the timeshare operator. Hence the proliferation in litigation which the timeshare industry is losing.
Below is a PDF copy of the RDO Code of Conduct, once you begin to read it you will see many other infractions of this code by RDO members. Just remember what the sales reps told you when you first attended a presentation or even the constant attempts to “upgrade” you by the in-house reps. This will certainly open your eyes to what this industry and the so-called “Trade Body” are actually all about, we call it “protecting the old boy’s network”.
So, who can you go to when you have a dispute, the Kwikchex “helpline”, which is just another company funded by the RDO designed to protect their own members. The choice is very limited, timeshare owners are basically left on their own and at the mercy of some very dubious “exit & claims” companies. For those whose purchases were made in Spain, at least they are able to use the laws in place and use the legal system to gain redress, as we have constantly shown on our pages.
To end today’s article, if you purchased in Spain after 5 January 1999, with a contract with either no end date (perpetuity) or over the permitted 50 years duration, you have floating weeks or points systems, which also include fractional, paid any amount within the statutory cooling-off period. Then you may have a case under the Spanish legal system against your timeshare company for breaches of Timeshare Laws 42/98 & 4/12.
If you would like more information on this subject please use our contact page and Inside Timeshare will get back to you.
Welcome to the end of another week with Inside Timeshare, it has certainly been a busy one with so much news coming in from the courts and some more scam warnings were also issued. We began on Monday with news of the latest payouts to clients from cases against Anfi, this also included a warning on misinformation being put out on various forums regarding clients not getting paid out. On Tuesday we brought you more news from the courts including those from another timeshare law firm and also from an independent lawyer. We then published the story of the “fake” law firm supposedly operating out of Madrid and claiming to be working for the Courts. There is no company name but there are plenty of fake court documents. There was also more news on the “Battle for Anfi Payments”, this article followed one case which is now over with the client finally receiving their money. This story explains why there is such a “battle” to secure clients funds from Anfi, it is a real eye-opener.
Today however we have a look at the future for the timeshare industry and what it may hold for timeshare resorts/companies and the RDO (Resorts Development Organisation) the supposed “Trade Body” of the timeshare industry.
Over the past few years, we have seen many “timeshare sales” companies closing their “sales decks” with many sales staff losing their jobs.
Around three years ago, Diamond Resorts closed all their sales decks around Europe keeping on a few of the “in-house” sales reps. This was followed by Silverpoint, then recently the announcement that Club la Costa has now closed down all of their timeshare sales. It is also a fact that even Anfi has cut down on their cold line and in-house reps. The reason, well, there are several which we can think of, obviously, the first is the lack of sales on the “cold line”.
The “cold line” is your first introduction to timeshare, you will probably have been picked up on the street by an “OPC” with those wonderful “scratch cards” where you are the “only” winner of the “star prize”. (Sorry, but everyone’s a winner).
You spend several hours (after being told it is only 90 minutes), being given “the hard sell” along with “selling the dream”. Everything sounds great and you are then convinced to sign up. You are now a “proud” timeshare owner, but you also now are fodder for the in-house reps to attempt to upgrade you every time you holiday.
As people have become aware of the tactics used to get you to these presentations, it has become increasingly difficult for the OPC’s on the street to get people “on the tour”. Those that do are not as easily convinced to purchase as they were years ago when timeshare first appeared and during its heyday in the late 80s and early 90s.
Another reason is that so many of the current owners/members are now elderly and are giving up their timeshares either through relinquishment or by taking the case to court having the contract declared null and void plus the return of their purchase price. Now there is a severe lack of new members, the management companies are now liable for the maintenance on the unsold and returned weeks.
So with the lack of sales, the closure of the sales decks, the diminishing membership base what is the future for the timeshare industry and the RDO?
Timeshare ownership has been on the decline for years, leaving the management companies with more weeks on their inventory than members in many cases, so they need to make up the shortfall. This has been done by advertising those weeks on various booking websites, this has tended to infuriate members who due to owning floating weeks or points (which incidentally are illegal in Spain) find that there is a lack of availability. Many are able to book cheaper than the annual maintenance fees!
As for the RDO, over the years they have always backed up their members, they have ignored the fact that it is their own members who have been selling contracts which are illegal in Spain. It is their own members who are being taken to court for these illegal contracts, yet they make no mention of it apart from the odd statement that they believe the Courts and the Supreme Court have interpreted the law incorrectly. We wonder why?
A great case in point is that of Silverpoint, for years this company along with their predecessor Resort Properties sold many illegal contracts, the most prolific were the “investment packs” of weeks. These were supposedly weeks which would gain a rental income and after 2 years be resold at a profit. This was later replaced with the “company participation scheme”, the same thing under another name.
These “products” have been clearly deemed as illegal and there are hundreds of cases waiting to be heard in court, which is a large contributing factor to the closure of sales and the liquidation of Silverpoint. Yet, Silverpoint were one of the largest contributors to RDO funds, the CEO of Silverpoint, Mark Cushway was also a director of the RDO!
So it is not rocket science why the RDO does not mention or sanction these companies for their “illegal” practices, it is their payments that keep this “organisation” afloat.
Now when Silverpoint withdrew their membership and Cushway resigned as a director, the RDO still said absolutely nothing, even though they were no longer members and have been completely discredited in the courts.
This also brings us to Kwikchex, this company replaced the discredited Alberto Garcia and mindtimeshare website, their brief is to bring to the attention of timeshare members the “bogus” practices of the many companies on the periphery of timeshare. But, only if they are not members of the RDO, yet did they say anything about the practices of Silverpoint, the answer is a resounding NO!
So what of the RDO if other timeshare companies go the same way, how will the RDO be able to function without their annual subscriptions?
That is the million-dollar question as it would not take much to diminish that income, after all, it appears that the RDO only represents around 10% of the timeshare industry in Europe and these are the major companies such as Diamond, Club la Costa and Anfi.
We know that Anfi is also in dire straits legally and financially, the majority shareholders and controllers of Anfi is the Cazorla Group, they are on the verge of being placed into liquidation. The number of claims and the amounts being seized by the courts is absolutely staggering, there is no way the sales company can survive. When they do finally go, will Anfi be withdrawing from the RDO?
This year has been very hard for the holiday industry with all the restrictions being imposed around the world, hotels have had to close resulting in a severe loss of income, timeshare, however, has fared a little better.
The reason being is that they are still demanding the payment of the annual maintenance fees even though the members cannot use it, resulting in many complaints about the fees. Will they get a refund, will they get a reduction in next year’s fees?
Unfortunately from the enquiries received by Inside Timeshare, this does not seem the case. In fact, Anfi has been downright despicable in this matter.
Members are basically being “blackmailed” into signing the new Anfi contracts or they will not receive a voucher to save this year’s week. The reason for the “new” contract is very simple indeed, ever since the introduction of the timeshare laws on 5 January 1999, Anfi has continued to sell their product in breach of these laws. Again nothing from the RDO except their backing of the Anfi claim the “law is wrong”.
The issue of the “new” contract is specifically designed to bring them within the law, with the duration set at the maximum of 50 years, along with the allocation of a week number and apartment number which then gives the impression that it is a fixed week. In fact, the contract still calls it a floating week. We also suspect that the same weeks and apartments have been allocated to several members at the same time!
So to answer our question of what does the future hold, well it does look very bleak indeed, timeshare seems to have had its day, people have found better and cheaper ways to holiday without the huge initial income of the timeshare purchase and the obligatory annual fees. The standard of hotels on package holidays has also improved considerably as many of the timeshare resorts have become dated. Along with the increasing number of elderly members wanting out and no new young blood purchasing, the timeshare industry will slowly diminish with many timeshare resorts reverting to standard hotels. Could this be the future for Anfi if they do liquidate, after all the minority shareholders with no direct control at present, are a major hotelier?
As for the RDO, with the demise of the industry who are they going to represent, after all, we have said that they only seem to represent 10%, so to lose another few of their main contributors would certainly reduce their influence.
Kwikchex, well your guess is as good as mine, we are sure the CEOChris Emmins who has a rather colourful track record (see link below), will find another company to “contract” their services!
In the end, the timeshare industry has only itself to blame for its demise, for years they have reaped millions of euros in sales yet have given virtually nothing in return. They have flouted the laws in virtually every place they operate and all with the full sanction of the RDO who will not investigate or adjudicate on any complaint against their members.
The industry does need to change and wake up to the realities that they are no longer the “must-have product” of the past, they need to reevaluate what they do and how they do it, they need to become more consumer/member aware. There will still be a timeshare industry, but this will be limited and more than likely appeal to the high-end market rather than the ordinary Joe in the street who was “kidnapped” and cajoled into purchasing.
Timeshare as we know it is a thing of the past, this year I believe has really put a spanner in the works, owners/members are waking up to the fact that they mean nothing to the companies apart from a readily available source of income. What we call “cash cows on a money-making conveyor belt”.
Are you experiencing problems with your timeshare, are you getting what you paid for and were promised, is your contract illegal, do you want out for whatever reason?
If you are answering yes to these questions and would like further information on your legal rights and your options, please use our contact page and Inside Timeshare will get back to you.