WASHINGTON, D.C. (FEBRUARY 07, 2018)
edar Village Board of Directors proactively sought a solution for this legacy timeshare property, which was losing owners and accumulating bad debt. They discovered Lemonjuice Capital. Alexander Krakovsky, Managing Member and CEO, proposed to the board a tender offer process, which was completed yesterday, Feb. 6. Such an approach had been unheard of in the timeshare industry.
When Cedar Village Resort was built in the late 1970s on North Carolina’s beautiful Beech Mountain, the 15-unit timeshare resort was considered a jewel in the scenic Appalachian Highlands in the western part of the state. Time has taken its toll, however. The timeshare regime was steadily losing owners and accumulating bad Debt. Many owners wanted a fair and equitable way to wind down their timeshare interests, but there was no market for individual timeshare weeks.
“A tender offer allows an absolute majority of owners to decide simultaneously and equitably what to do with their timeshares,” said Alex. “ To approve conducting the tender offer process, 75% of the paying owners had to agree to sell. This is a fair and transparent way to provide to all owners the opportunity to sell. Tender process provides a sharp contrast to the way other properties wound down. One such example is recent bankruptcy of Harbor Hill resort in Provincetown MA where the board just filed for bankruptcy.”
Alex added, “Value creation through repositioning and better operation can often turn a ‘lemon’ into lemonade, creating a wonderful vacation resort. However, when a timeshare regime fails to be sustainable in the long run, the right option can be a well-managed termination of timeshares and recovery of the underlying real estate value.”
Lemonjuice structured the tender offer process so that multiple options were available to Cedar Village Resort timeshare owners:
1. They could sell or exchange for other timeshares;
2. They could remain as an owner and participate in proceeds from the eventual sale of real estate;
3. They could acquire whole units at Cedar Village.
Former President of the Cedar Village HOA Board Art Szmuriga said,” Working with Lemonjuice Capital has been a win-win opportunity for our resort. We are continuing to operate until the sale of the units is completed. The repurposing process will not hamper continued enjoyment of the resort.”
“Terminating an entire timeshare structure is unprecedented in the United States,” said Alex. “Board and owners need to work together for this to happen. It requires vigilant planning, process management and the right mix of legal support.”
About Lemonjuice Capital
Lemonjuice Capital (http://www.Lemonjuice.biz) invests and takes ownership positions in assets that are impaired by badly structured legal regimes, such as legacy timeshares, and works with boards and other owners to reposition and restructure these assets for higher and better use.
PRESS RELEASE SOURCE: Lemonjuice Capital