The Trouble with Tribbles (Timeshares)

Yahoo Bot · Sun Feb 25, 2018 1:06 pm

Excellent food for thought, and a decent Star Trek reference.
Can someone with Lexis access please post a PDF of that case, I
can't pull it up.
Thanks,
mark
On 2/25/2018 12:43 PM, David Tilem DavidTilem@TilemLaw.com [cdcbaa]
wrote:
>
>
> Grace:
>
> This is a very important post as I believe a million or more
> Americans are burdened by timeshares which they no longer care to
> use. Further, the new wave of timeshare release or relief
> companies want thousands of dollars (typically $3-5,000) for the
> “privilege” of relieving time-share owners of their burdens going
> forward.
>
> Some may recall that a few years ago I helped someone start a
> company called Dead End Properties, Inc. It was designed to
> relieve debtors of the ongoing burden of HOA assessments even
> though they had abandoned their properties and had their personal
> liability discharged in bankruptcy. The effort was not successful
> for two reasons. First, I was never able to figure out how my
> friend could monetize the properties acquired by the company -
> yes, make money for helping debtors. It is true that Dead End
> Properties charged a few hundred dollars for accepting a property,
> but that’s wasn’t really “money”.   That did not even cover all of
> the costs and legal fees involved.   Second, not enough people
> took advantage of this opportunity. Had more done so, my friend
> could, perhaps, have done something with a large number of
> properties. Dead End Properties has gone by the wayside.
>
> My point in recalling Dead End Properties, however, is that I have
> been considering something similar for timeshare holders. The
> problem with timeshares is that they appear to be a combination of
> an interest in property (which can be sold without problem under
> Title 11) coupled with an executory contract (which needs to be
> assumed by someone able and willing to provide adequate assurance
> of future performance) – perhaps something like an easement which
> runs with the land.   Debtors in Chapter 13 and 11 cases can sell
> the property, but how do they assign the executory contracts
> unless the buyer has financial capacity to pay the ongoing
> maintenance costs? It would be of great benefit to many if we
> could figure out a place where these timeshares can quietly go
> away and die, ala Dead End Properties…...
>
> I am hopeful that, when I get a chance to read the 9^th Circuit
> case you cite below, it will advance my thinking. But I also want
> to invite the collective to consider how best to help our clients
> (and friends and even family members) who have fallen into what I
> consider to be the “timeshare trap”. For those who want to keep
> their timeshares and who use them as they were intended, great!
> For those who succumbed to the hard sell and are now burdened with
> an annual maintenance fee, we are experts in debt relief and we
> should be able to come up with something.
>
> I welcome any and all suggestions, ideas, thoughts or stories
> about things which people have tried to accomplish this goal
>
> Thanks again for your post.
>
> *David A. Tilem*
>
> *Certified Bankruptcy Specialist Since 1997*
>
> Law Offices of David A. Tilem
>
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>
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>
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>
> av
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> *From:* bankruptcy-specialists@googlegroups.com
> [mailto:bankruptcy-specialists@googlegroups.com] *On Behalf Of *R.
> Grace Rodriguez
> *Sent:* Sunday, February 25, 2018 12:17 PM
> *To:* cdcbaa@yahoogroups.com; Bankruptcy Specialists
>
> *Subject:* Surrendered Time Shares - - -
>
> During recent research I found:
>
> Batali v. Mira Owners Ass'n (In re Batali), No. WW-14-1557-KiFJu,
> 2015 Bankr. LEXIS 4050 (B.A.P. 9th Cir. Dec. 1, 2015)
> The
> case discussed:
>
> "In 1997, a bankruptcy court considered whether postpetition
> *time-share* assessments relating to a
> *surrendered**time-share* interest were discharged in* [*16]
> * a
> debtor's chapter 13 bankruptcy. In re Mattera, 203 B.R. 565
> (Bankr. D.N.J.
> 1997).
> Following the language of §
> 1328(a),
> the court in _Mattera_ framed the issue as two-fold: "[W]hether
> the association's [postpetition] assessments constitute a 'debt'
> under [] §
> 1328(a),
> and, if so, whether that debt has been 'provided for' by debtor's
> Chapter 13 plan." Id. at
> 570.
> The court, believing "that the _Rosteck_opinion best reflect[ed] a
> plain reading of the statutory definition of 'claim'" and
> interpreting the terms "debt" and "claim" broadly, concluded:
>
> [A]t the time of the filing of debtor's Chapter 13 petition,
> the obligation of the debtor to Ocean High for [postpetition]
> assessments was a contingent, unmatured, unliquidated, unfixed
> right to payment which constituted a "claim" and a "debt" for
> §
> 1328(a)discharge
> purposes. The claim was contingent upon the retention of
> ownership by the debtor, and the regular assessment of fees by
> the association. The claim was not fixed in terms of a certain
> and definite amount due at the time of the filing of the
> petition. The debt would mature each month as assessments were
> made by the association.
>
> Id. at
> 571.
> The _Mattera_ court went on to explain:
>
> Our conclusion that [postpetition] assessments constitute
> claims within the definition of [] §
> 101(5) and
> may, therefore, be discharged as* [*17]
> * an
> in personam obligation of the debtor does not mean that if the
> debtor continues to use the unit and/or receives benefit from
> it, that she may do so without compensating the
> association. While this factual scenario is not directly
> implicated here because debtor has certified that she did not
> use or benefit from the *time-share* following the filing of
> the petition, liability for [postpetition] use and occupancy,
> on theories of unjust enrichment and/or quantum meruit, might
> be available. _See, e.g., _In re Lamb, 171 B.R. 52, 55 (Bankr.
> N.D. Ohio 1994)
> .
>
> Id. at 572
> .
> As to the second prong of the issue, the court in
> _Mattera_ concluded that the debtor's postpetition assessments
> were provided for in the plan because debtor's plan provided for
> the *surrender* of the *time-share* and specifically listed the
> *time-share* association as a secured creditor. _Id._ "
>
> Have any of you had luck with getting the Association to stop
> billing the client and damaging their credit? They have had no use
> of the timeshare, they are barred because of the bankruptcy, and
> now they are sending them post petition claims. . . . .
>
> May the Light shine our way on.
>
> R. Grace Rodriguez, Esq.
>
> Office: (818) 734-7223 ~ Cell: (818) 554-9922
>
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