Right of First Refusal and a Bankruptcy Sale

[Gillyrose779]

We won a bankruptcy auction for a 50 pnt contract at SS.

The offer is LOW but it is low b/c there are a few years of maintenance and late fees to pay off if we receive the contract.

My question is will Disney take this into account when considering taking back the contract- will they look into the fees attached to it or will they just consider the low offer? I'm just wondering what our chances are.

 

[kniquy]

Is this an auction through Orange county? I think DVD has someone bidding on their behalf. Which is why many of those auctions tend to sell close to what the ROFR is usually at (if there is an outside bidder). As far as outstanding maintenance fees -- was there a disclosure as to the fees due? I think current year MF are generally due, but beyond that there is typically a back log of unpaid maintenance fees and loans (hense the reason for bankruptcy) which i don't know if the auction winner is typically responsible for. A little more detail might help with getting some input here.

 

[CarolMN]

Disney can only substitute itself as the buyer and would need to pay everything you agreed to pay in the contract. I don't remember any times that someone reported losing a bankruptcy purchase to ROFR, so the odds are in your favor. Good luck!

 

[Gillyrose779]

Is this an auction through Orange county? I think DVD has someone bidding on their behalf. Which is why many of those auctions tend to sell close to what the ROFR is usually at (if there is an outside bidder). As far as outstanding maintenance fees -- was there a disclosure as to the fees due? I think current year MF are generally due, but beyond that there is typically a back log of unpaid maintenance fees and loans (hense the reason for bankruptcy) which i don't know if the auction winner is typically responsible for. A little more detail might help with getting some input here.

Sure- this was through a company that specializes in selling assets due to bankruptcy. All fees were disclosed- past maintenance/late fees total $2,132.90.

It is a 50 pnt contract at SS- total cost- $1625 purchase price, $2132.90 maintenance / late fees, $50 Disney Transfer fee, and $225 Document Prep fee so $4032.90 total which is $80.67 per point out the door.

 

[Gillyrose779]

Disney can only substitute itself as the buyer and would need to pay everything you agreed to pay in the contract. I don't remember any times that someone reported losing a bankruptcy purchase to ROFR, so the odds are in your favor. Good luck!

That is fantastic to hear- thank you!

 

[wdrl]

Sure- this was through a company that specializes in selling assets due to bankruptcy. All fees were disclosed- past maintenance/late fees total $2,132.90.

It is a 50 pnt contract at SS- total cost- $1625 purchase price, $2132.90 maintenance / late fees, $50 Disney Transfer fee, and $225 Document Prep fee so $4032.90 total which is $80.67 per point out the door.

CarolMN is correct in stating that in order for Disney to exercise ROFR, it has to agree to the same terms that you agreed to with the seller.

That's the good news.

The still confusing part for me is whether Disney has been afforded its Right of First Refusal in this case.

If you are buying a deed direct from a court ordered foreclosure auction, then Disney's ROFR rights do not apply. Essentially, Disney had the ability to bid on the deed at the court ordered auction. Since it either did not bid or did not submit the winning bid, it lost its right to exercise ROFR on the winning bidder.

But I don't understand how you are obtaining this deed.

Has the deed actually been foreclosed by a bankruptcy court? You say that you are buying the deed "through a company that specializes in selling assets due to bankruptcy." Did that company buy the deed at a bankruptcy foreclosure auction and is now selling that deed to you? If so, Disney is entitled to decide if it wants to exercise ROFR because the deed is changing hands between two parties. There are companies and individuals that buy DVC deeds at judicial and trustee foreclosure auctions and then turn around and sell them to others. Disney can, and does, ROFR those deeds when they are being resold.

Or, Is the company merely helping to liquidate all assets before the bankruptcy court issues its final judgment? If that is the case, Disney is still entitled to decide whether it wants to exercise ROFR because, once again, the deed is changing hands between two parties.

 

[Gillyrose779]

CarolMN is correct in stating that in order for Disney to exercise ROFR, it has to agree to the same terms that you agreed to with the seller.

That's the good news.

The still confusing part for me is whether Disney has been afforded its Right of First Refusal in this case.

If you are buying a deed direct from a court ordered foreclosure auction, then Disney's ROFR rights do not apply. Essentially, Disney had the ability to bid on the deed at the court ordered auction. Since it either did not bid or did not submit the winning bid, it lost its right to exercise ROFR on the winning bidder.

But I don't understand how you are obtaining this deed.

Has the deed actually been foreclosed by a bankruptcy court? You say that you are buying the deed "through a company that specializes in selling assets due to bankruptcy." Did that company buy the deed at a bankruptcy foreclosure auction and is now selling that deed to you? If so, Disney is entitled to decide if it wants to exercise ROFR because the deed is changing hands between two parties. There are companies and individuals that buy DVC deeds at judicial and trustee foreclosure auctions and then turn around and sell them to others. Disney can, and does, ROFR those deeds when they are being resold.

Or, Is the company merely helping to liquidate all assets before the bankruptcy court issues its final judgment? If that is the case, Disney is still entitled to decide whether it wants to exercise ROFR because, once again, the deed is changing hands between two parties.

Honestly do not know exactly how this company works other than I have been following their site for years and they have DVC timeshares every so often. They auction on eBay- you win, sign and notarize the proper documents, the trustee then signs, and then it is off to Disney for ROFR.

 

[MouseOfCards]

Interesting. If this company has been selling timeshares (including DVC) for many years, there should be some reports of folks' buying experiences, right. If Disney has been buying them back in ROFR, I would imagine people sharing their questions and frustrations on some timeshare forums. If there has been little or no reports of these purchases, I would think it's because Disney has been letting these pass, and folks would prefer to keep these deals a secret.