Azure Resorts Liquidation Update – New Club Manager Appointed
We write to provide an update following the liquidation of Azure Resorts and associated companies. We refer to previous articles on this topic which can be viewed via the links below:
This firm is acting for a number of unhappy consumers who purchased timeshares at the Golden Sands Resort from Azure Resorts Limited including membership in Golden Sands Island Residents Club, The Heavenly Collection and Azure Experiences Membership Club.
In # May 2020, members of the above Clubs received notification that Azure Resorts Limited, Azure Services Limited and Azure XP Limited had gone into Liquidation.
As previously advised, the Azure companies and the Club are separate entities. Nevertheless, the position that we are adopting on behalf of our clients is that our clients are entitled to terminate in any event either as a matter of general law of unincorporated associations, by application of the Unfair Terms in Consumer Contracts Regulations1999 or as a consequence of misrepresentations made to induce the purchase of these products. Notices have been duly served on the Clubs and the Liquidators.
In respect of bank claims those are being pursued against UK lenders that provided linked finance to fund purchases. In some cases, the amounts involved are astonishing and we have had elderly clients who have invested in excess of £100,000 in timeshares that they were promised would be sold through the Azure Resales Programme. The Liquidators for Azure have, notwithstanding anything else, confirmed that the Resales Programme has now been discontinued and that the Clubs are under no obligation to reinstate the same. Clients are obviously concerned that their investment has been lost and that they are left with significant liabilities, namely loan repayments and maintenance fees payable until 2045.
On 8th July 2020, members received a letter from First National Trustee Company (“FNTC”). By way of explanation, in Timeshare Club Trustee structures, unincorporated associations, namely Clubs, are established. Purchasers become members of these Clubs and the Clubs are meant to deal with occupation and servicing of holiday accommodation. It is the membership in the Club that creates the liability for maintenance fees. Unincorporated associations are not by law able to hold property, hence in most cases underlying properties are held by a Trustee, which in this case is FNTC.
On its website FNTC describes itself as follows: “We are the World’s leading provider of business solutions and legal structures for Resort Developments – essential tools that help make the vacation ownership industry more efficient and more attractive and more profitable”.
In its letter to members dated 8th July 2020 FNTC have advised as follows:
- Following discussions with the Liquidators of the Azure Companies, FNTC have established a new company to act as a manager of the Clubs on behalf of all members.
- The new management company will be a non-profit making entity and its only role will be managing clubs for and on behalf of its members. It is unclear as to what difference, if any, this will make to the level of maintenance fees payable although even non-profit making companies could have significant expenditure in terms of providing services, paying for employees and director remuneration.
- FNTC has established two companies, namely Vacation Club Services Limited (“VCSL”) to act as the new Club Manager. VCSL in turn has established another company in Malta called VCMS Co Limited which will employ local staff to serve as club members.
- It is noted that FNTC has provided the new Club Manager with “appropriate working capital for its short-term operating requirements. The working capital will be in the form of a loan from the Liquidators of Azure Resorts Limited and Azure XP Limited and will be unsecured, interest free and with no fixed date of payment”.
It is not clear why the Liquidators would be funding the creation and subsidy of a new Manager. It is also unclear what if any assets are available to meet claims from unsecured creditors. No doubt there will be more clarity when the Liquidators file their first progress report.
The letter does not mention anything regarding the resale of timeshares as the Liquidators have already made clear that the resale department has been closed and is unlikely to re-open.
Within the letter from FNTC it is suggested there is a substantial demand for reservations for the remaining months of 2020 and early months of 2021 and that “the new Club Manager will do its best to meet members’ requests but there can be no guarantee of availability of space which is why we recommend you make your reservations as soon as you can and well in advance of the expected time utilizing your entitlement”.
The above may be of concern to members as it suggests there could be problems with the availability of holidays.
Regarding contacting the new Club Manager FNTC provides contact details.
It is not clear whether or not the Club Manager is yet fully operational as the letter from FNTC says that VCMS Co Limited will “employ local staff to service the Club’s members”. It is unclear from the letter as to whether recruitment has taken place or when the infrastructure to deliver service to members will be fully up and running.
Regarding the clients that this firm is acting for, we are pleased to update that after 4 years of submitting similar fact evidence we have started to receive favourable decisions and are hoping to obtain positive outcomes for all of our clients although anyone making an enquiry does need to understand that timeshare claims are extremely complicated and the work involved in putting together a claim, particularly a similar fact claim, is significant. This is often contrary to what the ex timeshare cold calling paralegals lead people to believe.
Finally, on a related topic we are pleased to confirm that we have also been securing settlements in excess of 6 figures on behalf of clients who had retained the services of cold calling unregulated timeshare claim companies.