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Manhattan Club Lawsuit
I agree 7 million dollars is not enough restitution for 18,000+ TMC Owners. This is where we TMC owners need to flex our muscles. Let's all write to the NY AG and Judge Rakower letting them know 7 million dollars is not enough. TMC Owners started the NY AG investigation with our letters now we can move this settlement more to our benefit with our letters.
Here are the addresses:
Atty. Serwat Farooq New York Attorney General’s Office Asst. Attorney General 120 Broadway, 23th Floor New York, NY 10271
Honorable Justice Eileen Rakower, Supreme Court of the State of New York 71 Thomas St. Part 15 New York, New York 10013 Dear Justice Rakower: Regarding case number 451536/2014: Schneiderman vs Eichner:
Irene Smalls
Irene S.
irene,
which website to we go to in order to see the information re $7mil settlement? also was there any info re distribution of these monies to TMC SHAREOWNERS? where do owners stand regarding ANY settlement (of which $7mil is indeed "CHICKEN FEED.")
chris
irenes93 wrote:GOOD NEWS! Latest Legal Filings in the NY Attorney General vs Manhattan Club Case: For full case details check the court record Take a look at this—pages 3,8 51-17 specifically refer to disgorgement and restitution as well as BlueGreen. A figure of $7million has been floated by the AG for restitution.
Chris V.
Last edited by chrisv126 on Aug 25, 2016 08:55 AM
Where is it written that the NYSG is seeking $7 million in restitution for us TMC owners? I think it most likely that the State of NY will get the $7 million, or whatever amount is determined, as a penalty against the criminals. I didn't read anywhere that they are seeking punitive damages for timeshare owners. I hope I'm wrong, but we have to keep in mind that this case is not a lawsuit by owners against TMC, but a criminal investigation by the State into real estate fraud and mismanagement. Perhaps, if everyone writes to the Judge and the NYAG strongly requesting that TMC be forced to buy back our fraudulently sold timeshares as part of the penalty, we might have an impact in the final outcome against Eichner & gang.
irenes93 wrote:I agree 7 million dollars is not enough restitution for 18,000+ TMC Owners. This is where we TMC owners need to flex our muscles. Let's all write to the NY AG and Judge Rakower letting them know 7 million dollars is not enough. TMC Owners started the NY AG investigation with our letters now we can move this settlement more to our benefit with our letters.Here are the addresses:
Atty. Serwat Farooq New York Attorney General’s Office Asst. Attorney General 120 Broadway, 23th Floor New York, NY 10271
Honorable Justice Eileen Rakower, Supreme Court of the State of New York 71 Thomas St. Part 15 New York, New York 10013 Dear Justice Rakower: Regarding case number 451536/2014: Schneiderman vs Eichner:
Irene Smalls
Sally W.
I have written to and spoken extensively with the AG's office regarding my experience in purchasing a week's share at $25k and my inability to exercise my rights under the contract. TMC obviously broke all of our contracts as soon as they denied any of us access to a room at a time any rooms were being rented out to the general public via Travelocity, Expedia, Hotels.com, walk ins, etc.
Taking our hard-earned money ... lying to us on reservations and maintenance fees, etc. ... and all the while selling OUR room shares on the internet. Deceit, double-dipping, fraud, arrogance-not a company I want any part of. I do not know the process but I would hope that the AG's investigation will culminate in a financial settlement to include our being made whole.
Even if there are only 18,000 legit owners (versus numbers I've heard TMC sold as high as 28,000) ... and if we take an estimated $20k invested per owner ... that's $360 million in restitution. A suit, if necessary for the AG, resulting in reimbursement of prosecution fees, punitive damages, etc. would only add to that amount.
Everyone does need to continue to write letters because our numbers are few. While there are 18,000+ timeshare owners there are a relative handful of us that know what's going on.
Charles M.
I believe that I read that the AG would meet with a group of us, and I think now would be a good time to request a meeting between the AG and a group of owners.
Since I live in Seattle, I would not be able to attend, but I am sure there are enough interested owners at this stage that would welcome a clarification of the $7 million and the possible difference between the owners' goals and the AG's goals
Craig R.
I think craigr has a good idea, and though not all of us could attend, those who cannot could write statements or affidavits confirming and supporting the position of those who do attend, stating in effect that they are representing the rest of us. Although we like to call this a lawsuit, it actually is a criminal investigation into illegal real estate fraud and mismanagement by the State of New York. The end result, if the AG is successful, would be to stop the criminal action and penalize the criminals. I don't think the State can sue them for us. It would definitely benefit us all to know, first hand from the NYAG, if frauded timeshare owners stand to re-gain any loss from the State's action, if they are successful. I think it most likely that we would have to separately follow-up with a class action suit against the Eichner group for restitution, citing the successful criminal findings of the AG. Of course, Eichner lawyers would drag that out for years, but at a minimum it could immediately halt any and all negative actions (harassing phone calls & letters, reporting to credit bureaus, etc.) by TMC against timeshare owners who cease all payments. In other words, it may take a while to get paid back, but at least we could stop paying.
craigr32 wrote:I believe that I read that the AG would meet with a group of us, and I think now would be a good time to request a meeting between the AG and a group of owners.Since I live in Seattle, I would not be able to attend, but I am sure there are enough interested owners at this stage that would welcome a clarification of the $7 million and the possible difference between the owners' goals and the AG's goals
Sally W.
UPDATES ON NYAG INVESTIGATION On August, 19, NYAG / SERWAT FAROOQ have presented and published 30 documents, exhibits and memorandums, Docs# 371 thru 411. Great and enjoyable reading! Recommend to all owners.
The last doc is MEMORANDUM OF LAW IN OPPOSITION. The MC Motion 005 to release funds for their legal payments was denied. In that Memorandum there is a referral to "7 M for restitution" that the owners are talking about. Meantime, It has been addressed to the owners of flexible interests in metropolitan suites only. In regards to the owners of other flexible interests "NYAG has a strong interest in maintaining the existing injunctions" and The MC may be liable for a large award of restitution which is under progress.
Below is the extract:
"Respondent T. Park is liable for overselling the ratio of “fixed” to “flexible” interests in one room type. The 8th Restated Plan represented that they would not sell more than 25% of ownership interests as “fixed” interests in any room type. 4th Farooq Aff., Ex. GG (excerpts of 8th Restated Plan). By 2014, with respect to the metropolitan suites, Respondent T. Park sold 50% of interests as “fixed” interests to a timeshare company known as Bluegreen. 4th Farooq Aff., Ex. HH (list of Bluegreen’s ownership interests). Those sales greatly reduced the amount of inventory available to the owners of “flexible” interests. If the Court requires T. Park to issue full refunds to the 983 buyers of 509.75 annual “flexible” interests in this room type, assuming that each annual interest was sold at a steep discount from the disclosed offering plan price (i.e., $15,000 per annual interest instead of the price disclosed in the 8th Restated Plan), Respondent T. Park would be responsible for a restitution award totaling over $ 7 million. 4th Farooq Aff., Ex. II (list of owners of flexible interests in metropolitan suites). Moreover, Urban may be liable for a large award of restitution. Its rental of rooms to the general public more than 48 hours in advance of a check-in date violated the 7th Restated Plan, and deprived thousands of timeshare owners of full access to the Manhattan Club rooms, for several years. 4th Farooq Aff., Exs. Y-Z. Thus, the NYAG has a strong interest in maintaining the existing injunctions, especially because the value of T. Park’s and O. Park’s other assets, their ownership interests in the Manhattan Club, is not known at this time, and because they are enjoined from selling such interests." https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=ovMjFpy6NexIU4/QSkN3Gg==&system=prod
Fibo N.
More extracts from the MEMORANDUM OF LAW IN OPPOSITION, Aug.19, 2016
"THE RESPONDENT ENTITIES HAVE UNCLEAN HANDS
... Equitable relief is unavailable to a party who comes to the Court with unclean hands... Unclean hands exist when a party is “participating in a course of conduct of deception and deceit.” .. The doctrine of unclean hands applies against a party who is “guilty of immoral, unconscionable conduct,” where such misconduct is directly related to the subject matter in the litigation, and the party seeking to invoke the doctrine was harmed by the misconduct.
Having already spent over $1.7 million on legal fees since July 2015, when NYAG cross-moved and put all Respondents on notice that NYAG sought to sequester Urban’s assets, the Respondents knowingly reduced the amount of funds available for a future restitution award. Their effort to double-dip at the expense of timeshare purchasers should not be permitted as it would harm the victims. ..
...NYAG has a strong interest in disgorging bad actors from ill-gotten gains."
Fibo N.
More extracts from Memorandum of Law in Opposition, Aug. 19, 2016. Love to share!
Since January 2015, Respondents Have Withdrawn Millions of Dollars from Urban’s Bank Accounts to Pay Legal Fees and Other Expenses that Are Unrelated to the Timeshare Association. Between January 2015 and May 2016, Urban disbursed $3.5 million to T. Park’s lender, Capital Source Bank, also known as Pacific West Bank; and additional $2.2 million to four law firms: Winston & Strawn LLP, Katsky Korins LLP, and Bracewell LLP and DLA Piper LLP (US). Upon information and belief, Respondent Urban’s payments to those law firms reflect Urban’s payment of the legal fees for all Respondents, including the individually named Respondents...
... Respondent Individuals have not attempted to show a lack of alternative sources to pay their legal fees. No affidavit or financial statement has been filed by any of the Respondent Individuals... At least one respondent, Ian Bruce Eichner, may be able to pay his own legal fees, as he may be worth over $275 million.
Urban is paid approximately $540,000 per month by the Timeshare Association... The Timeshare Association is funded in turn by timeshare owners’ payments of annual maintenance fees, and other miscellaneous income that includes revenue from the rentals of rooms by the general public... The timeshare owners’ payments of common charges, like their mortgage payments, were procured by fraudulent sales...
This instance of misconduct is established by the report NYAG ran off of the Manhattan Club’s internal database that demonstrated hundreds of reservations by the general public more than two days in advance of a check in date... This misrepresentation is material because prospective purchasers likely would not have bought timeshare interests if they had known it was possible, and is much cheaper, to rent rooms at the Manhattan Club rather than becoming an “owner.” Thus, the prior Orders were supported by evidence of fraud.
...The Respondent Entities’ primary income stream is Respondent Urban’s $6.4 million annual fee, paid by the Timeshare Association. The Timeshare Association in turn is funded by timeshare owners’ annual maintenance fee and tax payments, and miscellaneous income, which includes Urban’s rentals of Club rooms to the general public... Respondents T. Park and O. Park generate approximately $4,000 per month in revenue through certain timeshare owners’ mortgage payments on loans issued by T. Park and O. Park in connection with the sale of timeshare interests...
...Between July and December 2014, the parties entered into seven stipulations that were subsequently approved by the Court, that allowed T. Park, O. Park and Marketing Group to make payments from specified bank accounts for enumerated purposes, such as paying their employees’ salaries and wages, and trade payables. .. However, NYAG was concerned that Respondents were violating the spirit, if not the plain terms of the first three stipulations by paying consultants, in addition to employees, and reimbursing Respondent Lager for a $560 dinner, a $250 lunch, $281 for maintenance of a Porsche, and the $2,500 annual membership fee for his American Express Centurion Card bill. .. Accordingly, and because each so-ordered stipulation reduced the funds being preserved in the frozen accounts, in December, the parties agreed, pursuant to the seventh so-ordered stipulation, that Respondents tender $550,000 to NYAG to hold in escrow in exchange for allowing them to pay certain expenses from the frozen funds.
The Frozen Funds are Tainted by Fraud and the Escrowed Monies Are Being Held for the Benefit of Others
The Respondent Entities claim that the frozen funds “belong” to them. .. However, the vast majority of funds they seek are either tainted by fraud or is held in escrow for the benefit of others. The corporate funds are directly or indirectly from timeshare owners..."
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=ovMjFpy6NexIU4/QSkN3Gg==&system=prod
Fibo N.
As per NYAG/Serwat Farooq docs that have been posted on Aug 19, there is a referral to $7 M" at the Memorandum in Opposition. NYAG mentioned the owners of Metropolitan suits flex interests only in regard to that $amount. Restitution for other type flex interests in under investigation.
"Respondent T. Park is liable for overselling the ratio of “fixed” to “flexible” interests in one room type. The 8th Restated Plan represented that they would not sell more than 25% of ownership interests as “fixed” interests in any room type. 4th Farooq Aff., Ex. GG (excerpts of 8th Restated Plan). By 2014, with respect to the metropolitan suites, Respondent T. Park sold 50% of interests as “fixed” interests to a timeshare company known as Bluegreen. 4th Farooq Aff., Ex. HH (list of Bluegreen’s ownership interests). Those sales greatly reduced the amount of inventory available to the owners of “flexible” interests. If the Court requires T. Park to issue full refunds to the 983 buyers of 509.75 annual “flexible” interests in this room type, assuming that each annual interest was sold at a steep discount from the disclosed offering plan price (i.e., $15,000 per annual interest instead of the price disclosed in the 8th Restated Plan), Respondent T. Park would be responsible for a restitution award totaling over $ 7 million. 4th Farooq Aff., Ex. II (list of owners of flexible interests in metropolitan suites). Moreover, Urban may be liable for a large award of restitution. Its rental of rooms to the general public more than 48 hours in advance of a check-in date violated the 7th Restated Plan, and deprived thousands of timeshare owners of full access to the Manhattan Club rooms, for several years. 4th Farooq Aff., Exs. Y-Z. Thus, the NYAG has a strong interest in maintaining the existing injunctions, especially because the value of T. Park’s and O. Park’s other assets, their ownership interests in the Manhattan Club, is not known at this time, and because they are enjoined from selling such interests"
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=ovMjFpy6NexIU4/QSkN3Gg==&system=prod
Irene S.
i have been requesting that jeff weir and greg crist plan another TMC meeting such as the one we had last august in the nyc chelsea area: the masonic temple. i suggested that the planners of the next meeting fill out a REQUEST FORM for the NYSAG give us a presentation by filling out THIS FORM on the AG'S weekly information web site. WE NEED THIS TO HAPPEN IN ORDER TO KEEP MOVING FORWARD MORE RAPIDLY. AT THIS POINT WE'RE MOVING SLOWER THAN A SNAIL'S PACE. i firmly believe that if the AG agrees to meet with TMC SHAREOWNERS, WE WOULD HAVE AN OVERFLOWING CROWD AT A MEETING AS DESCRIBED ABOVE. SEPTEMBER WOULD BE AN IDEAL TIME TO HAVE SUCH A MEETING. IF YOU AGREE, MAKE YOUR PREFERENCE KNOWN TO JEFF AND GREG IN THIS REDWEEK.COM FORUM.
CHRIS
craigr32 wrote:I believe that I read that the AG would meet with a group of us, and I think now would be a good time to request a meeting between the AG and a group of owners.Since I live in Seattle, I would not be able to attend, but I am sure there are enough interested owners at this stage that would welcome a clarification of the $7 million and the possible difference between the owners' goals and the AG's goals
Chris V.
I sent information to the NYAG and have heard nothing back. I can't remember receiving a bill for the maintenance fees but I do recall they were going up due to nonpayments. Have most owners stopped making the maintenance fees or had advice re: this? Is there something we should be doing?
Mary B.
How much detail does everyone have re: the failure to be able to get a reservation? Our problems occurred years ago and were only resolved when I threatened to go to the AG for fraud. We've since exchanged because we couldn't get dates even when calling 9AM on the first date we could.
Mary B.
I LIVE OUT OF STATE, AND WOULD NOT BE ABLE TO ATTEND A MEETING, BUT WOULD VERY MUCH LIKE TO BE A PART OF ANY AND ALL ACTIONS NECESSARY TO MOVE THIS PROBLEM TO SOME TYPE OF A CONCLUSION. I AM SURE THAT THERE IS A GREAT NUMBER OF OWNERS UNAWARE OF ANY AND ALL DEALINGS IN REGARDS TO THE TMC LAWSUIT. I STILL BELIEVE THAT FOR THIS TO COME TO ANY TYPE OF ACTION, THE MEDIA NEEDS TO BECOME INVOLVED. ONCE THE PUBLIC IS INFORMED OF WHAT IS HAPPENING, THEY WILL BECOME WARY AND REFUSE TO RENT FROM THEM. THIS WILL DECREASE THEIR CASH FLOW, AND ALL OWNERS NEED AT ONCE TO STOP, I MEAN STOP PAYING THEIR MAINTENANCE BILLS. THEIR CREDIT WILL NOT BE HARMED, AND THEY CAN TAKE THAT MONEY AND SPEND IT ELSEWHERE, IF THEY NEED TO VISIT MANHATTAN. ONCE THE FLOW OF CASH TO TMC IS DECREASED, WE HAVE A BETTER BARGAINING SITUATION TO GET PAID FOR OUR UNITS, IF WE WISH, OR REIMBURSEMENT FOR NON USE OF OUR UNITS.
Henry D.
