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PARSIPPANY: Not too long ago I noted that Franz Hanning, who has long sat at the helm of Wyndham Vacation Ownership, has called it a day in order “to spend more time with his family”. Yeah, he used that old cliche.
The interesting part of this is that while he personally notified the CLUB WYNDHAM Platinum Owners, Wyndham itself has not issued any kind of news at all about it other than a notification to the SEC that merely says “On November 28, 2016, Wyndham Worldwide Corporation (Company) announced that it has mutually agreed with Franz Hanning that he is resigning as head of the Company’s timeshare business unit. Mr. Hanning will continue to be employed by the Company to assist with an orderly transition of his responsibilities until March 1, 2017.
Effective with the termination of his employment, Mr. Hanning will receive severance benefits consistent with the provisions regarding separation from employment without cause contained in his employment agreement with the Company, dated November 19, 2009, as subsequently amended, and described in the Company’s 2016 Proxy Statement.”
Enter Brian Morin, writing an article for SeekingAlpha.com with the somewhat apocalyptic headline “Insider Sales, Suits Citing Fraudulent Selling Techniques Likely To Drag Wyndham’s Performance In Stale Bull Market”.
Writing about Wyndham Worldwide in general, Morin does go specifically into issues he sees with the timeshare arm of the company and Franz Hanning in particular.
In his summary he notes the following:
- Wyndham lost a $20 million punitive judgment against a former employee citing fraudulent selling techniques in its timeshare unit. Other suits are mounting.
- Franz Hanning, head of the timeshare unit, has reached an agreement with the company to exit his responsibilities.
- Wyndham officers have been on a two year streak of selling shares, with some officers left with very little holdings of the company’s equity.
- As our 8-year bull market grows stale, the appetite for vacation ownership will dry up.
- Its been a great run, but Wyndham will likely underperform as the bull market grows stale, and fall sharply during the next bear market.
He went into more detail further into the article, saying “On November 28, 2016, Wyndham Worldwide Corporation announced that it has mutually agreed with Franz Hanning that he is resigning as head of the company’s timeshare business unit. It is unclear whether this is related to the $20 million whistle blower judgment, but it did occur 10 days later, so the timing is very suspicious.” And still further into the article he actually used the word “fired” to describe the incident.
According to Law360, there are 468 lawsuits pending involving Wyndham, including 111 contract, 100 personal injury, and 99 civil rights suits. Not all of those involve Wyndham Vacation Ownership but there have been enough lawsuits that DO involve Wyndham VO over the last several years to catch one’s attention and that $20M judgment is certainly enough to grab the company by the short hairs, so to speak. Has Wyndham finally had enough?
Even before Fairfield Resorts was purchased by the former Cendant Corp. in 2001 and subsequently got its name changed to Wyndahm Vacation Resorts, the company had a reputation with industry insiders for hard-sell techniques and for pitching heat. According to a multitude of lawsuits and complaints from consumers that reputation did not change when the company got a new name, and Franz Hanning has been a top level executive for most of that time.
But is that really a reason to blame Hanning or to assume it might have contributed to his sudden resignation? Yeah that “spending more time with his family” deal may make your eyes roll into the back of your head, but what if it’s true?
Mr. Morin thinks it’s suspicious and he says
In summary, a huge legal suit, firing of the timeshare president, significant insider selling and waning market forces will likely force Wyndham shares to stagnate and underperform the market for the foreseeable future. Selling shares now would be prudent, with the next buying opportunity likely 6-12 months into the next bear market, but only if the integrity of the company, its leadership and its practices turns around between now and then.
Integrity. That’s a very big word.
You know what I see and hear all the time from Wyndham VO owners/members? Some variation of “Love the product, hate the way it’s sold.”
You’d better read his entire article for more information.
“If you haven’t got anything nice to say about anybody, come sit next to me.” -Alice Roosevelt Longworth
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