Buying DVC From a Bankruptcy Proceeding?

[Jgc014]

Hi DisBoards,

I recently had an offer accepted on a DVC contract. When I received the sales documents, I noticed this was part of a bankruptcy proceeding.

Just wanted to get some insight on whether this complicates or changes the process at all, or would it just be like any other resale?

It does seem like closing time will be longer, which I am not thrilled about by itself, so if there were other potential challenges, may just pass on this one.

Thanks!

 

[Eldon32]

My understanding is the title company is responsible for ensuring any liens (loans) and the estoppel will confirm any outstanding maintenance fees. They will also ensure and provide insurance against their search that the owners actually own it. The only thing in the closing process not confirmed is the status of any points (borrowed/banked) - but you can request a statement be provided from the DVC portal prior to closing.

I wouldn't worry about it.

I'm not a lawyer.

 

[RoseGold]

You get title insurance, no big deal. I wouldn’t have a problem doing this, the sellers are professionals who aren’t trying to waste anyones time.

 

[CarolMN]

IMO, the main "issue" is the time it could take to close. The sale must be approved by the bankruptcy court and that often takes additional time. If you are willing to wait and purchase the title insurance, you should be fine. Good luck! IANAL, either.

 

[Jgc014]

Thanks @Eldon32, @RoseGold, and @CarolMN - really helpful! I am not thrilled about a slightly longer closing, but think I can get past that if overall the rest of the process is fairly standard.

Would this have any effect on ROFR? I am assuming not if it is a fairly standard transaction, but the price is definitely on the lower side, so would be great if it had any positive effects!

 

[RoseGold]

The sale has to be approved before the trustee signs off on the initial documents, or maybe even when it is listed. This is pretty straightforward as an asset to be liquidated with clear market value. Once that is done, the delay in closing would just be administrative. These are professionals with notaries and such, so they might even be faster than civilians.

I can see bankruptcy being pretty straightforward for ROFR. It has an actual process, as opposed to say an executor of an estate which can be less rigid and sometimes a hot mess.

 

[princesscinderella]

I think if you are getting a great deal go for it as Disney probably won’t take it in ROFR because of the hassle in the process. If it’s not I’d walk away.

 

[CarolMN]

Would this have any effect on ROFR? I am assuming not if it is a fairly standard transaction, but the price is definitely on the lower side, so would be great if it had any positive effects!

Odd are in your favor. I don't recall any reports of a contract being taken if the seller was involved in a bankruptcy proceeding. Disney does tend to bid on foreclosures, though, but it doesn't sound like that is the case in your situation.

 

[RoseGold]

I think if you are getting a great deal go for it as Disney probably won’t take it in ROFR because of the hassle in the process. If it’s not I’d walk away.

I don't think it's a given that bankruptcy is more hassle. It could be easier than dealing with an ill human or a messy estate, or heck even the IRS with a foreign buyer (which Disney tends to skip). Bankruptcy is professionals selling things at market value. This is an easy transaction for them, with an asset that's fairly easy to sell and value. Assuming the administrative part is there, this could be quick.