WDW could permanently close the theme parks, and you...

[Werner Weiss]

...would have no legal recourse.
From Exhibit "10" to the Public Offering Statement (rev. 05/93)

XII. OTHER BUSINESS OF THE TWDC COMPANIES

Neither DVD nor DVC assumes any fiduciary obligation to you except as required under Florida law and the other TWDC Companies expressly do not assume any fiduciary obligations to you at all. The TWDC Companies retain the right to pursue their own interest in the conduct of their affairs and various business activities and in the acquisition, use or disposition of their property, including but not limited to the Disney name, characters, licenses, marks, park operations and property developments. For example, the TWDC Companies may develop additional competing properties (whether associated with the Club or not) even if such activities would not be in your best interest. Moreover, the TWDC Companies have no obligation for your benefit to maintain the WALT DISNEY WORLD Resort or other properties adjacent to the Condominium or any other DVC Resort.
In the quotation above, "TWDC" refers to "The Walt Disney Company." I highlighted the last sentence; it's not highlighted in the legal document.

I don't remember our DVC Guide's exact words when we bought in 1994. He explained this section of the Public Offering along the lines of, "If Disney decides they could make more money by replacing Epcot with an automobile junkyard, Disney has the right to do so, and DVC members would be stuck with the results."

No, I don't think there's any risk that The Walt Disney Company will do anything along these lines. But it's something to think about while reading complaints about the loss of Early Entry (temporary, one would hope), shortened park hours, and various closures (rides, restaurants, and resorts).

I'd be interested in the thoughts of any professional (or amateur) lawyers -- or anyone who's watched a courtroom drama on TV.

[WebmasterDoc]

Good find, Werner. While I'm not an attorney (nor do I play one on TV ;) ), it seems to me that the language you quoted emphasizes that all we own is an accommodation...and we even have the right to handle the management of the DVC resorts, with some consequences, if desired by the membership.

Certainly the VB and HH resorts are more obvious in their lack of relationship to the Theme Parks, but your quote defines the same relationship for the onsite resorts.

That certainly puts it into perspective!

[PamOKW]

I haven't read the documents in quite awhile but I do recall that they cover just about every conceivable possibility and cover themselves for those possibilities. ;)

[Dumbo]

Werner,

As long as there are no drastic changes in the weather pattern for Central Florida, I'm not too concerned. I'm happy just to have a place to go to to get away from the cold weather in winter once a year.

Dumbo

[Dumbo]

Werner,

If they close the parks you are gonna see a lot of tail gate partys in the parking lots. Those parking lots will look like some sort of ethnic festival.

Dumbo

[Werner Weiss]

Originally posted by WebmasterDoc
While I'm not an attorney (nor do I play one on TV ;) ), it seems to me that the language you quoted emphasizes that all we own is an accommodation...and we even have the right to handle the management of the DVC resorts, with some consequences, if desired by the membership.
Doc... I guess I don't see where that particular paragraph says anything DVC members having the right to handle the management of the DVC resorts.

I just read it as saying, "Disney doesn't owe anything to DVC members beyond what the contract and law require, and Disney can do anything with other Disney operations, even if such actions reduce the value of DVC."

[WebmasterDoc]

Your quoted paragraph didn't suggest that, Werner.

I was adding comment from other areas of our documents which provides for each resort to be managed by it's owners- but we'd give up the ability to exchange to other DVC resorts/non-DVC resorts/DVC programs, unless those issues could be separately negotiated by the new management.

We "own" an accommodation which provides us no legal relationship to the rest of WDW ( a point your quote clearly demonstrates). A division of Disney does manage our resort for us, but could be replaced if we decided (foolishly- IMHO) to do so.

Sorry for any confusion my comments created.

[Richyams]

Personally, since I broke even ofter my first trip, if it all went away tomorrow, I wouldn't really be out anything. Dissapointed, sure, but not out anything.

[BobH]

Is this just a hypothetical exercise. I find it highly unlikely that WDW would close its doors. Is this discusion another speculation resulting frmm the tragic events of SEpt 11?

[Werner Weiss]

Originally posted by BobH
I find it highly unlikely that WDW would close its doors.
I also find it highly unlikely.

As PamOKW wrote, "I haven't read the documents in quite awhile but I do recall that they cover just about every conceivable possibility and cover themselves for those possibilities." That's very well put.

Lately, on this board and others, there have been complaints that Disney is reducing the value of staying on-site in general and at DVC resorts in particular -- eliminating Early Entry for the time being, shortening park hours, closing some attractions, and cutting back on live entertainment.

By posting the language from the Public Offering Statement, I was just trying to point out that we, as DVC members, accepted that risk when be bought into DVC. In an extreme case, WDW could, for example, convert the theme parks into industrial parks, and we'd own vacation accomodations in an industrial complex! (Again, this is highly unlikely.)

[jcodespoti]

did anybody read the legal description? I did. It doesn't mean anything but its in the document.


Joe in CT

[drusba]

The legal view:

Yes, if Disney decided to shut down the parks it could do so and DVC members would have no recourse. That of course is not likely. As to the thought that Disney could shut it down and turn it into an industrial park, even the bribery of all public officials would likely not accomplish the change in zoning regulations needed for that.

[BarbOKW]

Why bother even thinking about this! Just imagine the kind of turmoil that the world would be going through for Disney to to decide to close WDW. If things get that bad, we'll all be worrying about much more serious things than our vacation club. We'll be worring about the fact that half the people we know, and probably ourselves, will be out of work or we'll be worrying about all the sons and daughters, we have or know, that are fighting for country. I pray that WDW doesn't close, not for my DVC, but because of the implications of what would no doubt be happening around the world to cause such a drastic move.

[DisneyCrazy]

I'm sure Universal would just buy them out and install some new mega-coasters, he he he... :smooth:

[Dell]

Just don't shut down the golf courses. Thats the MAIN reason I go 2-3 times a year! LOL

Dell

[Werner Weiss]

Originally posted by drusba
The legal view:

Yes, if Disney decided to shut down the parks it could do so and DVC members would have no recourse. That of course is not likely. As to the thought that Disney could shut it down and turn it into an industrial park, even the bribery of all public officials would likely not accomplish the change in zoning regulations needed for that.
Ah, but remember that the local government that handles WDW's zoning and building codes is the Reedy Creek Improvement District(RCID) (http://www.myflorida.com/rcid/about.html), which is controlled by Disney. (DVC members at OKW, BWV, and VWL even pay taxes to the RCID.) And when I write "controlled by Disney," I don't just mean heavily influenced -- I mean that Disney selects a small number of residents who live permanently in the RCID, allowing Disney to have complete control over the RCID.

Here's some information about RCID's building codes -- called the EPCOT Building Codes. This means our DVC resorts at WDW were built under the EPCOT Building Codes!
Quoted from http://www.myflorida.com/rcid/about.html
BUILDING AND SAFETY

The Reedy Creek Improvement District introduced the innovative EPCOT Building Codes which are based on a philosophy that encourages new methods in design, construction and materials. They are recognized as containing some of the most stringent provisions in the nation and have become "living documents" which serve as valuable reference for other major building codes throughout the United States.

The EPCOT codes have led to a wide range of imaginative projects and ideas within the Reedy Creek Improvement District. They have permitted such unique construction as a fiberglass castle, an 18-story geosphere attraction building, and windowless assembly buildings containing hundreds of thousands of square feet of public attractions while ensuring a high degree of public safety.

The Department of Building and Safety applies the EPCOT Building, Plumbing, Mechanical, Gas and Electrical Codes and Florida laws relating to accessibility, thermal efficiency and energy conservation. Those codes have enabled construction at the Walt Disney World Resort to implement some of the most unique systems found anywhere.
Disney could turn WDW into an industrial complex, without having to bribe any public officials, as long as Disney complies with "Florida laws relating to accessibility, thermal efficiency and energy conservation."

Allow me once again to point out that I don't think this is going to happen. I'm not trying to alarm anyone. I'm just pointing out that DVC members at WDW accepted a risk when making a long-term investment in WDW resort accomodations.

[PJMPA]

I am an attorney and although I am not familiar with Florida law, Disney's motivation to close theme parks (hypothetically) would likely factor into the legal equation. If they were doing it because the parks were losing money(i.e. strictly for financial reasons), the equities of that situation would work in favor of Disney and against DVC owners. If it was done because Disney simply decided that industrial parks were more profitable than theme parks, the equities of the situation would favor DVC owners and work against Disney. Nothing could be done to stop them however, I am speaking strictly (and hypothetically) in terms of claims by DVC owners for money damages based on lost vacation value. Any such action would surely be certified as a class action. I don't think i'll spend any time researching the subject (yet).

[BobH]

Thanks for the updated explanation of the thread on this board. It is understandable that the WDW Legal boys would write the contract to cover the Disney Machine in case of the ultimate worst case scenario. I agree that closing WDW is a very, very far fetched idea indeed. I came in on this thread after it started and was taken back that people were even entertaining this idea. I found it startling, like so many other discussions that have arisen in these times, but my decision is to continue traveling and be the reason that these worst case scenarios (closing WDW) will never
become reality. I believe the quote ascribed to Mark Twain is appropriate to WDW situation - "the rumors of my demise have been greatly exaggerated."

[drusba]

Disney, though it has a lot of zoning control. could not go to an industrial park without violating the original charter that gave it the zoning control it has. The state would have to approve.

However, if you really want to sink into the theoretical world of unusual possibilities, you should note that the orginal charter does allow Disney to build a nuclear power plant on its property to provide power to the Reedy Creek District (where WDW is), assuming of course it could get NRC approval. Don't you think one of those would sit nicely right in that wooded area next to VWL?

[CaptainMidnight]

Actually, with all the world events, this may be the time to celebrate family and special times with a nice vacation.

If flying is a concern, I suggest driving.

Am I to understand if the resorts close, that we would not recoup our original or a discounted version of our investment?

[Werner Weiss]

Originally posted by CaptainMidnight
Am I to understand if the resorts close, that we would not recoup our original or a discounted version of our investment?
Disney doesn't owe us any particular resale value. Many of us who bought into DVC in the 1990s are actually in a position to sell at a profit if we were to sell now; that's very unusual for timeshare real estate.

However, at any time in the future, our real estate interest will be worth what people are willing to pay. Various factors would enter into the value, including the perceived value of WDW vacations. Needless to say, in the very, very unlikely case that Disney were to shut down the theme parks, our resale value would suffer greatly.

I'm not sure I understand what CaptainMidnight is asking about when he writes, "if the resorts close." The DVC POS allows Disney to run their operations outside of DVD/DVC in any way they want to, including closing resorts. Currently, Port Orleans French Quarters resort is closed temporarily, and the opening of the Pop Century resort is delayed indefinately. Other WDW resorts may have sections closed as well.

Closing DVC resorts would be another matter. The DVC resorts are timeshares, not hotels. We DVC members have rights associated with our real estate interest. So Disney can't shut down DVC resorts just because overall on-site occupancy is down, nor would it make any sense to do so.

I seem to recall that there is language in our paperwork about what would happen if a DVC resort doesn't last until 2042 -- if a DVC resort were wiped out by a natural disaster, for example. But right now I don't have time to look it up. Does anyone else recall?

[BobH]

I would hope it would not come to a class action suit. Everyone I have ever heard of gives intangible or miniscule benefits to the members of the suit and just makes the law firms wealthy.

[Pa@okw95]

You would more likely see a rotation of parks open. Animal Kingdom would probably close forever. By rotation I mean one park closed for a certain time period, then another. Just as long as the sun shines I don't much care whether the parks are open. What would bother me is some of the nice restaurants closing down there.

[DisneyCrazy]

I'm sure we could get one of those 'traveling carnivals' to set up in the MK parking lot...

:p

[Werner Weiss]

Yikes! When I wrote that "WDW could permanently close the theme parks," and we DVC members would have no recourse, I was only using this to illustrate a worst case scenario in relation to clause in the Public Offering Statement.

I wasn't actually suggesting that Disney would close the theme parks. Disney's theme parks and resorts have a history of being highly profitable. Undoubtedly, that's not the case this quarter, with current reduced attendence and poor hotel bookings. But WDW will bounce back.

[loribell]

Funny, isn't it, how you can put up a hypothetical example of what could be done and all of a sudden people start thinking it might happen? I could tell from the beginning of this thread that Werner was just trying to get people to realize that we are not owed anything other then our accomodations. Disney doesn't have to do the extra's. If they are hurting because of the slumping economy we should we willing to endure a few cut backs. Stopping early entries, cutting back on performances, etc. is not going to ruin a vacation if we don't let it. We need to try not to take everything so seriously. Lets just plan our vacations and go enjoy our families and friends.

[dianeschlicht]

This thread is a good example of how rumors and inuendo get started. I too knew what Werner was saying, but it is like the old " telephone" game we all used to play.

[BobH]

The last two posts by Diane and Loribell are right on the mark. I suggest this thread be ended and we move on.