Monday, June 26, 2006
Timeshare Regulation Called For In Cayman Scam
Many former club members of the defunct Indies Suites say government regulation of timeshare properties is needed to avoid future scams 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, what a scam.
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, what a scam.
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 timeshare scam 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 of this scam.
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 with this timeshare scam.
Many former club members of the defunct Indies Suites say government regulation of timeshare properties is needed to avoid future scams 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, what a scam.
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, what a scam.
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 timeshare scam 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 of this scam.
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 with this timeshare scam.
# posted by John @ 4:56 AM 
