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Joined: 14 Feb 2005
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Location: Cayman Islands
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 Posted: Mon Jun 26, 2006 10:14 am Post subject: News Headline | Timeshare regulation called for |
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From Caymanian Compass:
Timeshare regulation called for
Many former club members of the defunct Indies Suites say government regulation of timeshare properties is needed to avoid future situations similar to what they faced after Hurricane Ivan.
Most of the former timeshare owners of Indies Suites have received their negotiated settlement over the past two months, however many remain angry and disappointed with the way the purchase of their Cayman vacation spot turned out.
After a Grand Court decision to liquidate the Indies Suites Ltd. was overturned by the Court of Appeal late last year, the majority of timeshare owners decided to accept a settlement, which amounted to about 20 cents on their invested dollar.
None of 16 former club members who responded to questions posed by the Caymanian Compass thought the settlement was fair.
?How can the settlement be considered fair when I used my timeshare for only three of the 99 years (I contracted for) and had 20 per cent of my investment returned to me?? asked former club member Arthur Rosen.
Another timeshare owner, Barbara Armitage, had sympathy for Cayman?s circumstances after Ivan, and even made a relief donation to the Red Cross, but she had no sympathy for Indies Suites director and front man Ronnie Foster.
?In the light of the huge damage that was done (by Hurricane Ivan), I would have accepted the settlement as fair if the property had been fully insured and the insurance company just couldn?t pay fully,? she said. ?Because (Mr. Foster) lowered the amount we were insured for, of course I don?t think it was fair. We lost 80 per cent of our investment and he was not held responsible.?
During the Indies Suites Ltd. court proceedings, it was discovered the property was approximately 50 per cent underinsured after the company lowered its coverage. Rather than make up the shortfall from its own capital, Indies Suites sold the property ? without consulting the club members ? to St. Matthew?s University School of Medicine to be used as a dormitory
Although the negotiations for the sale appeared to start as early as October 2004, and the property was transferred in January 2005, club members were not informed of the sale until May 2005.
In the interim, several club members met with Mr. Foster during the early part of 2005 to discuss the property, and he told them he was working on the insurance settlement and still hopeful of rebuilding even thought the property had already been sold. The company?s website also misled club members into believing the property might be rebuilt.
The fact that the property was underinsured and then sold without their consent has many former Indies Suites? owners calling for government regulation in Cayman?s timeshare industry.
?At this time I believe the Cayman Islands Government should learn the damage that can occur from improperly funded insurance plans,? said former club member Marc Weiss. ?Reserves and other insurance laws in place in the U.S.A. could be a model for the Cayman Islands Government to follow.?
Rod Broome, who led the group of 230 club members in their Grand Court efforts, suggested insurance companies be required to report to regulators if any timeshare owner/operator lowered or cancelled its policy.
.Because the Indies Suites records were destroyed during Hurricane Ivan ? or possibly afterwards according to a report filed by the liquidator Chris Johnson Associates ? it is not know for certain how many club members there actually were, or who they were. Mr. Broome thinks this also needs to be addressed through regulation.
?Owner/operators should be required to register with regulators the names and addresses of all persons that purchase a timeshare,? he said.
Many of the former Indies Suites owners viewed their timeshares as investments, and many planned to 99?year term down to their children. Former timeshare owner Lorri Peterson thinks the government needs to protect investors.
?The investor should feel confident that they are protected from a situation such as Indies Suites,? she said.
Former Indies Suites owners did not view Cayman?s judicial system very favourably. ?I believe the Cayman judiciary system gave significant preferential treatment to Ronnie Foster due to his and his family?s status on the island,? said Mr. Weiss.
Several other club members wondered why a criminal investigation was never initiated, especially after some of the findings in the Official Liquidator?s First Report to the Creditors.
Mr. Broome pointed out that the liquidation order was overturned on a United Kingdom case precedent from the 1800s. In the UK, the law was amended many years ago so the 1800?s case is no longer valid in liquidation cases. Cayman, however, is still using the pre?amended UK law.
The Indies Suites Court of Appeal decision was precedent setting in that it was the first successful challenge to the way the liquidation cases have often been presented in Court in the Cayman Islands.
?The Cayman Islands judiciary system is archaic,? said Arthur Rosen. ?(It) must realise that its antiquated laws that governed the land 150 years ago may not be appropriate or may even be obsolete in today?s world.?
Not only were the club members disappointed with the judicial outcome of their predicament, they found no help from the government or private sector organisations.
Mr. Broome said letters about the matter to the Leader of Government Business, the Minister and Director of Tourism did not even elicit responses.
The club members also wrote the Chamber of Commerce and the Cayman Islands Real Estate Brokers Association about possible actions against Mr. Foster?s real estate company Foster Realty.
?Nobody in any official?type position helped us in any way,? Mr. Broome said
Although some of the former Indies Suites owners accepted their settlement in the form of a discount to purchase other timeshare properties in the Cayman Islands, most said they no longer trusted the timeshare system here.
?Cheated once, shame on you, cheated twice, shame on me,? said Indies Suites club member Craig Wood.
?Oh, how I wish I could have had the guts to swap at (Plantation Village), but I don?t trust your island, or some of the people on it,? said Melissa West.
In spite of the way things ended, some club members like Kevin England and his wife decided they missed Cayman. The Englands, who also lost money in the First Cayman Bank collapse, exchanged their settlement value for two timeshare weeks for one week at Coral Sands.
Mr. England said the Indies Suites situation never had to take place.
?It was not about the hurricane,? he said. ?Ivan was only a platform upon which the issue was played out. We never needed to lose our timeshare home away from home.?
Had the timeshare owners been consulted prior to the sale, Mr. England said special assessments could have been levied to have it rebuilt.?
The majority of club members said they would not return to the Cayman Islands.
?We? have found Mexico is a far better deal, even (considering) our timeshare in Cayman was paid for,? said Lynn Dittbenner. ?Airfare is approximately 40 per cent less; there is no nightly hotel tax per person; no insurance increases; no utility increase, and living expenses like going out to dinner, is at least 50 per cent less expensive.?
For Ray Goff, Indies Suites was his retirement vacation place, where he came for two weeks annually with his wife and granddaughter.
Mr. Goff said he does not have the financial resources to ever consider buying another vacation property.
?I never considered myself being a fool, but I guess I was proved wrong,? he said. ?I feel like I have been mugged.?
Michael Berson said he probably would not come back to the Cayman Islands for a while.
?If we did, it would probably be Little Cayman,? he said. ?However, if there were ever a public flogging of Ronnie Foster, we would do our utmost to purchase front?row seats.?
Mr. Foster?s name elicits similar anger from many of the club members, including June Adams.
?Mr. Foster, your business practices are not even what one might expect from a third world country and certainly not the Cayman Islands,? she said. ?You have besmirched your honour as a businessman (and)? by association, also that of your Cayman business colleagues.?
Anna Marie Brown feels similarly.
?If ever we had the misfortune to come into contact with Mr. Foster, we would tell him we are disgusted by his lies and deceit,? she said. ?He is certainly not representative of the many wonderful people we met in the Cayman Islands, and he should do the Island a favour and leave.?
Nearly all of the timeshare owners reported having enjoyable memories of their time at Indies Suites. But for many, those memories have been tainted.
?Our years at Indies Suites will always be remembered by us for the good times and friends we made over the year,? former club member Mike Mundo said he would tell Mr. Foster. ?However, your lack of concern for those that supported you over the years is deeply disappointing. Indies Suites always referred to its members as part of their family. Why was the ?family? misled and abandoned the way it was?? |
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Joe Stebbins, Editor
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