Experiences with buying bankruptcy contracts?

A thread I just read in this forum about a previously unannounced delay in closing due to a bankruptcy situation got me wondering how common that is or what really changes in the process when there is a bankruptcy involved. We have a contract in ROFR now that is a bankruptcy, but we were not told that there would be any delay- just that the sellers wouldn't be able to bank points.

So, what's been the overall experience of members in these cases? I think it would be helpful to know so that people bidding on contracts would have a better sense of what might or might not happen with this little tweak...

We looked at a GCV bankruptcy, but my broker told he that it couldn't close until bankruptcy was discharged. The timeline was too open for my liking, so I passed.

Any time you are looking at any kind of "distressed" contract -- due to bankruptcy, divorce, probate, big loan, etc -- you can expect delays and unpleasant surprises. In a perfect world, the broker would know all the critical details of all of their listings, but we don't live in a perfect world.

Sometimes surprises occur because the seller didn't realize their situation, the seller withheld the information from the broker, the broker was sloppy with their due diligence (or just didn't do any), the seller did something after listing the contract that the broker doesn't know (made a reservation, rented points to raise money, etc.). So these kinds of listings certainly have potential for drama. You have only to look at the dynamics of what might be going on in that seller's life to get an idea of the types of drama that could occur.

In some cases, a buyer might want to take the risk and see what happens. For example, if an existing DVC member is trying to get some low-cost add-on points, and doesn't need the points anytime soon, they can have more risk tolerance.

But for most buyers -- especially first-timers -- most would recommend avoiding distressed contracts.

Well, after posting this thread, I guess I had a moment of portent, as I just got an email from my broker about a contract that was in ROFR and due any day to be waived. Now I'm not even sure if the contract ever made it to Disney. Here is what she said: "I received an update from the sellers attorney that the final documentation that Disney is requiring still needs to be filed with the court. The seller is saying that he had been previously told that all was taken care of and the properties were ready to sell." She is saying that we can cancel, or we can put a time limit on the whole thing and try to push forward and cancel if it doesn't see completion by the timeline.

We are not new DVC owners, and this had a full complement of 2014/ 2015 points available for our UY. I don't see any contracts for VWL lately that aren't stripped.

We got a good deal, and I am concerned that prices at VWL will start to go up in the resale market once they start adding on. But, I also don't want to see this go on until we lose the 2014 points. Anyone experience this before and if so, how long was the process? Now I don't even know if it went to ROFR or what the deal is, I will find that out of course.

What do you guys think we should do?

Since you indicate there isn't any other contract out there for you at this time then there wouldn't seem like there's anything to lose by continuing on, is there? I'd set the deadline for certain though.

However I don't have any experience with a bankruptcy contract - the closest I came was buying a contract that Disney was taking back because of dues non-payment. But since that was dealing with DVC it went very quickly.

I agree with Kat. If there is nothing else out there, you really don't have anything to lose and put a deadline on it.