Hypothetical - Contract Question

[KyleAfterAWhile]

Let's say Fauci's promised 2nd wave hits and Disney shuts down again and then cannot recover.... what happens for those who have contracts with DVC where we paid for 40 - 50 years? Just curious if anybody knows the legal piece of that since technically they are in breach of contract. This is NOT a question of WILL Disney recover. I am not asking about their financials, Iger's abilities, etc. Just about the contractual piece for DVC members.

 

[_auroraborealis_]

Your membership in the Club will automatically terminate in the event of one of the following (provided that you do not own another unaffected Ownership Interest): (i) you transfer your Ownership Interest; (ii) you no longer own an Ownership Interest as a result of an assessment lien or mortgage foreclosure proceeding; (iii) the DVC Resort where you own your Ownership Interest terminates in accordance with the governing documents; (iv) the Unit in which you own your Ownership Interest is removed from the DVC Resort by virtue of a casualty or eminent domain action where the Unit is not reconstructed or replaced; or (v) both the Membership Agreement and the DVC Resort Agreement for the DVC Resort where you own your Ownership Interest terminate.

You should know that your purchase of an Ownership Interest at a DVC Resort, with the appurtenant membership in the Club, will not entitle you to any legal or beneficial interest in TWDC or any of its subsidiaries or affiliates (collectively the “TWDC Companies”) or their assets or any proprietary interest or right in any of The TWDC Companies (i.e., no right or interest in the property, contract rights or business of any of The TWDC Companies). You will not be entitled to any share of income, gain or distribution by or of any of The TWDC Companies, and will not acquire any voting rights in respect of any of The TWDC Companies.

 

[KyleAfterAWhile]

Thanks. So basically, we are screwed

 

[CraigInPA]

In the event of a bankruptcy or termination of operations by TWDC, DVC will continue to operate. There will be some turmoil when that occurs, due to the overlap of operations with DVC resorts and Disney resorts to which they are attached, and the fact that the management company for DVC is a subsidiary of TWDC. However, you will still be able to go to the DVC resorts, and exchange points just like today.

I suspect those at DVC resorts today are seeing a preview of what that may look like, especially those at BLT looking at an empty MK.

 

[_auroraborealis_]

Another fun piece in the contract basically says, in translation, "finding management that is not affiliated with TWDC ha ha gonna be super hard."

 

[Dean Marino]

So gonna re-iterate the concept of "Defensive Booking"

1) DVC or nothing. DVC has cancellation criteria baked into the contract. Do not Rent from WDW - rent DVC points from other agencies.

2) DEMAND a refund on un-used APs. Do not accept an extension. Just say no. Instead, buy a NEW AP, "Good on First Use", to 2030. We may have been the last couple that could do this, 6-18-2020.

3) See 1). You can cancel, per contract, 30 days prior to vacation. Get in under DVC, for contract protection.

4) Do not bother with TRAVELEX Vacation Insurance. They bombed out for everyone. Find a valid agency that will actually perform. TRAVELEX is dead meat.

5) Do Not purchase airfare, without a "cancel for any reason" clause. "No refund" airfare from Delta is of particular concern.

"Defensive Booking" is the concept that WDW, Airlines, Insurance, or anyone else can no longer be trusted to perform. Once upon a time? This all worked. It no longer does. You must assume that you have to CANCEL, at any moment, and recover as much cash as you can.