Bankruptcy Resale

[Firepath]

I'm just curious if anyone has bought a resale that is part of a bankruptcy. The first resale we bid on was, and we were told it would take about 30 days longer than normal, but also that they would accept almost any bid we were willing to make. Our offer was accepted almost immediately, but when we got the paperwork to sign, the closing date listed was way longer than expected. If it had taken as long as allowed, we would've lost all the non-banked 2012 points. We were told the seller couldn't bank them as the bankruptcy freezes all activity. We decided to let that one go. I did wonder if it could be worth waiting for a really low price. Would a bankruptcy deal ever get ROFD'd? Would Disney want to mess with that?

 

[disneynutz]

Disney processes thousands and thousands of contracts, and they have seen it all. If there is money to be made they will exercise their ROFR even with a bankruptcy.

Bill

 

[JimMIA]

I agree with Bill -- I don't think bankruptcy would matter at all to Disney.

A ROFR decision is just about the points and the price, and if the price is way low, so much the better for Disney. And they would not be concerned with the long lead time to closing.

 

[AllieV]

I was told by a selling agent that Disney doesn't like the messy ones and she hadn't yet seen a case where they ROFR no matter how cheap. The advise was that if I was willing to wait out all that mess and time, it would be worth my while. It happened that those were usually high points, though, so not for me. I hadn't thought about losing points due to the timeframe and getting no banked ones.

 

[joysfamily]

Curious which resort it was for, I wouldn't mind waiting the extra time for a really low price! If you can't post on here, would you mind PMing me? Thanks!

 

[Dean]

My understanding is that Disney tends to shy away from bankruptcy's and estate sales on ROFR, esp if they are involved in the bankruptcy. I'm sure there are not hard and fast rules in this area but it's worth a try if the price is cheap enough.

 

[Firepath]

I don't recall all the particulars, but it was OKW and they had accepted an offer of $50/pt, so I wouldn't say it was REALLY low, but it sounded like they'd probably accept less. This particular one was with Fidelity. Trouble was it not only had to pass ROFR, but also had to be approved by the bankruptcy court. I believe someone told me that Disney refers people to Fidelity when they are having trouble paying MF or monthly payments, so perhaps they see more bankruptcies and distress sales.

 

[lilpooh108]

Instead of worrying about Disney I'd worry more about whether you will get a Warranty Deed.

If I remember correctly, Bankruptcy Trustees usually sell things "as is where is". In other words, there might be other liens on the DVC interest. I would definitely pay for a title search and title insurance for this type of sale.

 

[333disneymom]

Does anyone have personal experience with a bankruptcy resale? Just wondering how much longer/complicated a bankruptcy resale would be? I agree with the previous statement to pay for title insurance in this case.

 

[txsoccermom]

So, my deal has been sitting in ROFR for 2 wks. I just found out from the broker that it is part of a bankruptcy estate It's a small pkg of 120 pts, and the listing said 0 pts for 2012, 120 pts as of 9.1.2013, and so forth. So with no 2012 points, no mf!!! They were asking $60/pt and I offered $57/pt and they accepted

Now, the broker is telling me the 2012 pts were put back into the contract b/c the bankruptcy trustee is trying to get as much $$ as he/she can (they have 6 contracts for this person like this). The estate is asking me to consider paying the 2012 dues on the 2012 pts since I will have full use of them. However, the contract was already negotiated, signed, deposit put down and sent to ROFR.

I offerred to split the 2012 mf b/c I really don't want to lose this one, and gaining the 2012 points when I didn't think I had them is great.

Question - should I purchase title ins like others have mentioned above? Also, will ROFR really take that much longer? She said I wouldn't have to start over with the ROFR for this. Would you have offered $ for 2012 mf or stood firm on your offer?

TIA

 

[DougEMG]

So, my deal has been sitting in ROFR for 2 wks. I just found out from the broker that it is part of a bankruptcy estate It's a small pkg of 120 pts, and the listing said 0 pts for 2012, 120 pts as of 9.1.2013, and so forth. So with no 2012 points, no mf!!! They were asking $60/pt and I offered $57/pt and they accepted

Now, the broker is telling me the 2012 pts were put back into the contract b/c the bankruptcy trustee is trying to get as much $$ as he/she can (they have 6 contracts for this person like this). The estate is asking me to consider paying the 2012 dues on the 2012 pts since I will have full use of them. However, the contract was already negotiated, signed, deposit put down and sent to ROFR.

I offerred to split the 2012 mf b/c I really don't want to lose this one, and gaining the 2012 points when I didn't think I had them is great.

Question - should I purchase title ins like others have mentioned above? Also, will ROFR really take that much longer? She said I wouldn't have to start over with the ROFR for this. Would you have offered $ for 2012 mf or stood firm on your offer?

TIA

I'd buy the title insurance.

As to paying the MF, it all depends on how much you want this contract. What resort and UY is it? Are you going to have time to use those 2012 points, do you have time to bank them?

Personally, if I liked a contract at one price, I'd still like it if more points got added and I only had to split the MF for those points provided I had time to either use, bank or rent those points by the time I got them.

 

[Dean]

So, my deal has been sitting in ROFR for 2 wks. I just found out from the broker that it is part of a bankruptcy estate It's a small pkg of 120 pts, and the listing said 0 pts for 2012, 120 pts as of 9.1.2013, and so forth. So with no 2012 points, no mf!!! They were asking $60/pt and I offered $57/pt and they accepted

Now, the broker is telling me the 2012 pts were put back into the contract b/c the bankruptcy trustee is trying to get as much $$ as he/she can (they have 6 contracts for this person like this). The estate is asking me to consider paying the 2012 dues on the 2012 pts since I will have full use of them. However, the contract was already negotiated, signed, deposit put down and sent to ROFR.

I offerred to split the 2012 mf b/c I really don't want to lose this one, and gaining the 2012 points when I didn't think I had them is great.

Question - should I purchase title ins like others have mentioned above? Also, will ROFR really take that much longer? She said I wouldn't have to start over with the ROFR for this. Would you have offered $ for 2012 mf or stood firm on your offer?

TIA

It depends on how much the insurance is. For this situation, I'd likely skip it as I think the risk is minimal at best once changed over. Since you have a deal already and the 2012 points have reduced value depending on UY, I wouldn't add any dollars personally. You have an agreement already, the worst they can do is cancel the deal which sounds unlikely.

 

[JimMIA]

I offerred to split the 2012 mf b/c I really don't want to lose this one, and gaining the 2012 points when I didn't think I had them is great.

I would stick with the deal you have. You have a binding contract; the trustee can't come back now and change the terms of the deal -- especially to get you to pay more money! And both the trustee and the broker know better.

I believe that if you make ANY change in the terms of the deal, you will have to withdraw your current contract and resubmit for ROFR. And actually, you might have to resubmit anyway if the trustee's actions in putting points back in changed the terms from what you agreed.

You might ask your broker about having to resubmit ROFR. I'd hate to see you go all the way through the process and then have Disney say you have to start over.

 

[disneynutz]

This purchase could drag on and on. Do you really want to be in the middle of a legal battle or spending your time at Disney using points from a different contract? I would let the Broker know that you wish to pass on this one.

Bill

 

[mrjef]

Disney processes thousands and thousands of contracts, and they have seen it all. If there is money to be made they will exercise their ROFR even with a bankruptcy.

Bill

Those were my exact thoughts!

 

[ELMC]

I wouldn't add any money to this deal. Plus, it sounds like they're playing fast and loose with the points...first they're not there, now they might be, but only if you pay more? I don't like the sound of the way this is proceeding, and it could be a sign of things to come. My guess (and this is just speculation) is that they either just found out that the 2012 points are there or they are having a hard time doing anything with them, and so they're trying to get more money from you. Because really, where else can they realistically look to get more money?

Personally, I would either find a way to get out of this contract without penalty or tell them to proceed with closing with the contract as is. Good luck, it sounds like you are in for some work here.

 

[Dean]

This purchase could drag on and on. Do you really want to be in the middle of a legal battle or spending your time at Disney using points from a different contract? I would let the Broker know that you wish to pass on this one.

Bill

They are legally obligated to carry through at this point as they are past their 10 day cancelation period. Timeshare companies, including Disney, are not worried about nickel and dime purchases though they do worry about the big picture. In general, ROFR has never been about making money on the individual purchase but structuring the overall situation. In the past they have tended to stay away from complicated sales such as bankruptcy and estate sales though I'm sure if they deal were good enough they'd move but I think we're talking a lot more than this. The contract should also spell out which UY the membership starts with and who gets the points. I doubt DVC will require a resubmission if the points change but no other financial specifics, I'm not even sure they can require it in this situation. Hopefully there is a closing date specified and if this does drag out, the buyer could then bail legally.

 

[disneynutz]

They are legally obligated to carry through at this point as they are past their 10 day cancelation period. Timeshare companies, including Disney, are not worried about nickel and dime purchases though they do worry about the big picture. In general, ROFR has never been about making money on the individual purchase but structuring the overall situation. In the past they have tended to stay away from complicated sales such as bankruptcy and estate sales though I'm sure if they deal were good enough they'd move but I think we're talking a lot more than this. The contract should also spell out which UY the membership starts with and who gets the points. I doubt DVC will require a resubmission if the points change but no other financial specifics, I'm not even sure they can require it in this situation. Hopefully there is a closing date specified and if this does drag out, the buyer could then bail legally.

If they magically can come up with 2012 points what other changes can happen? Where did the points come from? Will they vanish before closing? Doesn't smell right to me and I wouldn't want the headache, life is too short.

Bill

 

[Dean]

If they magically can come up with 2012 points what other changes can happen? Where did the points come from? Will they vanish before closing? Doesn't smell right to me and I wouldn't want the headache, life is too short.

Bill

There are several valid reasons for points to be there that weren't supposed to be. I don't necessarily see that as a major red flag. There are several contracts, there may be duplicates so this may be a different one than they were looking at. They may simply have honestly gave the wrong info. There might have been a reservation that was cancelled. Regardless, they have a legal contract and one can't simply walk away legally and without losing the deposit. There are other risks with a bankruptcy but the closing company should make sure that all is paid as part of the closing (past due fees, mortgage, etc).

 

[txsoccermom]

Interesting information and view points from all of you - I appreciate it! Since this is my first DVC purchase, I am finding a lot out sort of "after the fact" though. The seller was listed on the contract as an "estate trustee", but I just figured it was an inheritance thing, something like that. The broker said nothing about a bankruptcy resale until today. Apparantly the 2012 points were put in reservation status, and then I guess not used no they begged Disney and Disney put them back on the contract.

She said if I offered any money towards the mf, then she would just put together an addendum and that would be it. Oh, and the closing date on the contract said on or by Oct 8...so we'll see. If things drag onto long and start to get ugly, I'll check about getting out of the contract.

Here's hoping for some pixie dust