Davids What If

[New Mouse]

Any discussion on the topic of if Davids goes out of business before a rental happens, what then happens on either the renter or guests side?

 

[Sandisw]

I don’t know specificall,y, but I have a renter checking in in August. I am assuming my 30% won’t be sent, and will reach out to my renter directly if his business is gone or in trouble.

I won’t leave the renter without one.

 

[McCrae]

If I re rent points and this becomes an issue, I will make sure the renter is ok. I expect the majority of owners would do the same.

 

[SpaceMountain77]

The closure of David's is being discussed in other forums. We have a cruise swap scheduled for September. Is there any merit to the closure discussion?

 

[Sandisw]

The closure of David's is being discussed in other forums. We have a cruise swap scheduled for September. Is there any merit to the closure discussion?

Honestly, i Am worried things arent looking good if the number of chargebacks I’m reading about go through.

 

[SpaceMountain77]

Honestly, i Am worried things arent looking good if the number of chargebacks I’m reading about go through.

The position statement, on David's webpage, has not been updated since March 16, 2020. Moreover, the live chat has been unavailable. It is not reassuring.

 

[Grnl706]

The position statement, on David's webpage, has not been updated since March 16, 2020. Moreover, the live chat has been unavailable. It is not reassuring.

Agreed. Them deleting Facebook comments concerned me too. People are desperate for more information with a lot of hard earned money on the line.

 

[LAX]

The closure of David's is being discussed in other forums. We have a cruise swap scheduled for September. Is there any merit to the closure discussion?

I think there are signs that the business is in stress. I don't think anyone but David knows how close it is from the breaking point. I think those that already have current/future dealings with him can't do much but sit tight and hope for the best. However, you probably shouldn't engage in new contracts with him to put yourself at further risk, IMHO.

LAX

 

[DebbieB]

Any discussion on the topic of if Davids goes out of business before a rental happens, what then happens on either the renter or guests side?

Only the member can cancel the reservation, David’s can’t.

 

[Maddiesmum03]

Only the member can cancel the reservation, David’s can’t.

This is true....some owners will reach out to the renters to reassure them they will let the reservations run and just accept the initial 70% as full payment from those points. Others will cancel the reservations because they know they will not receive final payment and keep the points, leaving the poor renter without a vacation and out 100% of what they paid. I have 3 further reservations December/January using my 2021 points. At this point in time, I feel sure I will just let the reservations run.

 

[McCrae]

Honestly, i Am worried things arent looking good if the number of chargebacks I’m reading about go through.

I asked about charge backs and was told they don't except them to be successful. The industry standard has been to provide credit vouchers. They are following the practices according to advice they have received.

 

[cvjw]

If David’s goes out of business before I can cancel my last November rental with him, I will cancel the reservation and send all money I received back to the renter. I have their name and address.

I always used David’s service so if something happened with the rental - damage to the villa or leaving unpaid charges, he would help resolve the issue. I don’t feel comfortable not having that help in place.

 

[Minniesgal]

The closure of David's is being discussed in other forums. We have a cruise swap scheduled for September. Is there any merit to the closure discussion?

It's certaintly not impossible

 

[CraigInPA]

First, it takes months or years to exit bankruptcy (at least in the US). I assume Canada also has multiple forms of bankruptcy (like the US) which includes either dissolution or restructuring.

If David's enters a restructuring bankruptcy, every creditor (including owners with future rentals out there) will get a letter saying the business is in bankruptcy and they may not get paid in the future (to the owners) or that their rental may not happen due to the restructuring and the inability to pay in full for the rental. Every supplier (including owners with future rentals out there) that is considered vital to the restructuring will get a letter saying that they are required to continue their contract, with the debtor-in-place financing paying for what would have been paid by David's. Non-vital suppliers will get a letter that says their claims will be handled under the restructuring and they may get less than they are owed. Debtor-in-place financing will keep the company in business until it can restructure its debts (often paying pennies on the dollar to non-vital suppliers), and then the company will exit bankruptcy. There will be turmoil, and some people will not get paid in full, but the business will continue.

If David's enters dissolution bankruptcy, the court will advertise for buyers within a relatively short window. If there is a buyer, a contract will be written and a hearing held where the creditors can complain about the settlement and a judge will make a decision. If there is no buyer, the business will cease, and the assets sold at auction. There is a probability that future DVC rentals would be considered a liability (because they generate no new cash), and the owners would get pennies or nothing for their future 30% payment. At that point, the bankruptcy court releases all future liabilities from the company and to the company, which invalidates the 3 way rental agreement. The owner, at that point, could walk away, allow the rental knowing they aren't getting their full payment, or make a deal with the renter.

Typically, brokerage businesses don't have a need for a lot of cash. They take cash in, keep a small amount (their commission), and then pay the rest out to the supplier. When a brokerage business sells "futures" (products paid for now and to be delivered later), they need to account (escrow cash) for those future payments while waiting for the delivery of the product. For these kind of businesses, a downturn in business does not force it into bankruptcy. What does force it into bankruptcy is when the "futures" cannot be fulfilled, and they are forced to pay back not only the escrow amount, but their commission (which has already been paid as salaries and expenses to keep the business going).

 

[Sandisw]

I asked about charge backs and was told they don't except them to be successful. The industry standard has been to provide credit vouchers. They are following the practices according to advice they have received.

Do you think David’s would tell you he expected to lose?

 

[McCrae]

Do you think David’s would tell you he expected to lose?

No I wouldn’t , but in the context of what I asked it was a reasonable answer. I asked about potential owner liability in the event of CB’s and was told this. They further stated that even if they were wrong, I would have no liability because my contract with them has been completed.

 

[Sandisw]

No I wouldn’t , but in the context of what I asked it was a reasonable answer. I asked about potential owner liability in the event of CB’s and was told this. They further stated that even if they were wrong, I would have no liability because my contract with them has been completed.

Got it. In that context it makes more sense!

 

[LAX]

In light of a potential disappearance of David's from the DVC rental market (the market itself is on thin ice as well, IMHO), what percentage of the market would you guess that David's has (in other words, what's its market share)? It's obviously one of the bigger players if not the biggest. Should the market itself remain to exist after David's demise, I imagine it's a pretty good size void for other players to fill.

LAX

PS: I am referring to commercial, not private, rentals.

 

[Deb & Bill]

I asked about charge backs and was told they don't except them to be successful. The industry standard has been to provide credit vouchers. They are following the practices according to advice they have received.

There's an industry standard for timeshare brokers?

 

[McCrae]

There's an industry standard for timeshare brokers?

I got the impression they were talking about the Travel business in Canada.