Manhattan Club Lawsuit

So let me get this straight. I want to be sure I’m not missing something about this Manhattan Club settlement. Or maybe what has been published is a joke.

Thousands of us have been cheated and scammed for years by an unscrupulous band of crooks lead by Ian Bruce Eichner, and he and his cronies get to walk away SCOTT FREE by paying a token restitution. And the AG agrees that the restitution only will be paid to owners who, despite being defrauded for years by TMC operation, continued to pay maintenance fees to the criminal enterprise. And we certainly don’t want paying that restitution to be too burdensome for the crooks, so they get to spread out its payment over 3 years. I purchased a timeshare interest in TMC in 2005 for $32,000 based on a sales presentation during which just about every claim or promise made by the sales rep was false, misleading, or an outright lie, and the NY Attorney General’s undercover investigators have evidence of it all recorded on video.

Despite paying me fees for 10 years, I have been routinely cheated out of the use of my timeshare while the Eichner family and a small circle of TMC insiders have enriched themselves at my expense. Again, based on evidence gathered by the AG, we have learned that, for years, Eichner has been personally skimming over 6 million dollars a year from TMC through a shell management company called Urban. This company had no employees and provided no services to the operation of the timeshare property, yet our timeshare corporation was paying them $6 million a year!

TMC’s obligation to me was to make 7 days per year available to me to stay at TMC. Instead of making those days reasonably available, TMC engaged in an organized scheme to routinely tell me, and any other timeshare owner who called to make a reservation that the desired days were not available; while at the same time, TMC was selling the same rooms for the same dates to the general public on the Internet. Can anyone say, “RICO”? Anyone who hasn’t done so already should read the NY Attorney General's July, 2015 court filing, which itemizes a remarkable list of allegations of civil and criminal conduct on the part of The Manhattan Club. Here is the link to that 2015 AG court filing: You may have to paste it into your browser.

https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=arMAhc2Z8epneiTXUbb_PLUS_yQ==&system=prod

After you read that, ask yourself if the settlement reached by the AG has really provided anyone justice.

Bob Biello

Deleted

Let’s say that I agree with your summary of the facts. Let’s say statute of limitations don’t apply (although I believe it may) Where do you propose we go now? RICO is a federal criminal statute. If the US Attorney has any interest in pursuing this as a criminal matter, our permission is not required. My question is whether we going to leave this Dickensian litigation to our descendants or are we going to accept a settlement in our lifetimes?

angied70,

you may or may not be correct re "restitution" . however, i implore you NOT TO GIVE AWAY YOUR WEEK. at least await the full description of the settlement. you might be able to sell it, if you wish, and get all (or more likely, some percentage) of what you paid for it. why give away $20,000+ so "graciously". NO, NYET, NON...........DON'T DO IT.

keep in touch.

chris

ps DON'T GIVE AWAY YOUR TMC SHARE (S)!!!

sharon177, try renting it on your own on hotels.com, booking.com, etc. of course maintenance payments need to be up-to-date.

chris

Yes, we are the owners. It should have been turned over to us years ago. At least that is usually the way it works. I've never known of a developer who hung on like this. We will have a new management company and hopefully they'll pull us out of all this. Owners take control when all the units are sold. Who knows where we are in all of this!

I have always used my timeshare. I've either stayed there myself or exchanged it. You get plenty of points on it at RCI. I have trouble using them up! The assessments are way too high, though, in comparison to others. It is my most expensive timeshare to maintain! It's going to be very interesting!

If you read more carefully, I said I would sell it; however, my assumption is that IF/WHEN we are free to do so...what will the price be IF the current maintenance fee structure is in place with no guarantee of no future increases? I hope to get something, but am expecting close to nothing....

We will all see in due course, but in all certainty this "settlement" is just a joke!

You fail to consider the income tax deductibility of your real estate taxes (part or all of your maintenance fees). If you’re in say the 33% top bracket, and pay $2500/yr., you’re really out-of-pocket $1700, or about $250/night.much less than NYC hotel room. Same is true even if your average tax bracket is 25%.

Without a doubt, the negotiation by the NYAG had a disappointing outcome. But only criminal cases have dramatic outcomes. Negotiated settlements usually end with large compromises, otherwise they would not be accepted by the parties. There are an estimated 15,000 MC owners, but only 3300 entries on this forum. In addition, there are probably less than 300 unique users, meaning that some users are frequent and very "vocal," but in fact, only 2-3% are motivated at all. So I'd say that the fact that we succeeded in getting any action at all out of the NYAG, let alone 3 years of investigation followed by a settlement, represents quite an accomplishment. Was Eichner the big winner? Sure. Are some of us getting something back? Sure. Am I happy? No. Were others hurt more than me? Probably. Do I want to move on? Absolutely.

Steven,

The real estate tax on a MC week is about $100 per year. Maintenance fees are not deductible unless you are in the real estate business. The interest on a MC mortgage does not qualify either unless you own more than 13 weeks (1/4 year) You may want to research your tax advice.

real estate tax on a stuido unit is $ 284.85 for 2017 on a penthouse unit its $450.48 on a two bath unit its $338.64 so you also need to do some checking

I totally agree! We just want to cut our losses and get out! Getting some $$ is always nice, but I can't see that happening with this mess.

nathanz2 wrote:

Steven,

The real estate tax on a MC week is about $100 per year. Maintenance fees are not deductible unless you are in the real estate business. The interest on a MC mortgage does not qualify either unless you own more than 13 weeks (1/4 year) You may want to research your tax advice.

I pay almost $3500 on maintenance fees/taxes on a one week a year penthouse timeshare. $450 of those fees are for real estate taxes. My accountant says I can write them off and I have been.

Nathan, Deborah and Howard all obviously have received different advice on deductibility. So it seems clear to me that there is st worst uncertainty on the matter. When I inquired of TMC counsel many years ago I was advised that their position at that time was that approx 75% of the maintenance was deductible, akin to the factors (RE taxes, mtge interest) that are included in co-op maintenance. And for those who use the TMC for business purposes, my understanding is that lodging expense away from home is fully deductible against business income.

We each pay different taxes based on our individual assessments. I pay my MF every other year because I own a split, but I pay RE tax every year because that’s the way the city bills. A full week every year is double what I pay, so the average would be $2-400. I misspoke. However, the same tax laws apply to us all. I am an IRS licensed tax professional so I am not merely expressing an opinion. A timeshare at the Manhattan Club qualifies as neither a primary residence, nor a second home, so any mortgage interest is not tax deductible. Real estate taxes you pay anywhere are always deductible. As far as relying on TMC counsel for tax advice, I would think that it goes without saying by now that it would be unreliable. TMC is not a pass through entity which confers tax benefits on owners. Finally, unless the unit is owned in the name of a corporate business entity, you cannot pay rent to yourself. It is really a home office if you own it personally. So I am not giving tax advice to anyone, and by all means rely on TMC counsel or your individual tax advisors. I hope you are never audited.

Hi I keep received this email. Is it up to date, if so We would like to be part of the class action lawsuit. I had submitted all the paperwork to The AG office in NY and sent all important paper work reguarding our unit and other paperwork. I received a letter from them 2 yrs ago stating that they received everything. So aren't we already involved in this lawsuit?

John, there is no lawsuit and never was. There is a settlement by the NY AG. You will be contacted by the administrator. If you want more information, please read this forum starting around Sep 1.

FOOD FOR THOUGHT AND POSSIBLE ACTION: greg crist is the ceo of the national timeshare owners association. he might become proactive in offering us TMC timeshare owners some assistance in our so-far-futile attempts to solve the current "SETTLEMENT PUZZLE". (WHO'S GETTING WHAT AND WHEN AND WHERE). we need an advocate to work for us in contacting the nysag; it seems that our individual attempts to get mr schneiderman to give us concrete and direct information regarding our expectations have resulted in putting us off concerning what we all need to know now about the settlement. contacting mr schneiderman's office has resulted in skimpy answers, no answers, vague answers or something in between. THERE IS NO CONCRETE CLARIFICATION. I BELIEVE IT'S TIME TO CONTACT GREG CRIST REQUESTING HIS ADVOCACY.

CLICK (OR CUT AND PASTE) ON THE FOLLOWING WEBSITE FOR AN INTRODUCTION TO GREG CRIST, ESPECIALLY FOR THOSE OF US WHO MAY NOT BE FAMILIAR WITH HIM.

http://perspectivemagazine.com/2702201510/national-timeshare-owners-association-ceo-to-speak-at-upcoming-tatoc-conference

some feedback on my comments would be appreciated.

keep in touch

chris

Nathan says he is a licensed tax professional so I imagine he would knows something about deductibility. Obviously after all the fraud perpetrated by TMC, I wouldn't trust anything a TMC counsel advised and I use a very reputable accounting firm and pay them enough and they say/and have said my TMC taxes are deductible...so I have been and will continue to deduct them.

I read the settlement terms and "spoke" with Jeff Weir and I have concluded that since I paid fees on 2 timeshares between 2011-2014 that I will get some some reimbursement in 2 or 3 years. Probably not much. But if the management changes for the better (hopefully sooner than later) and we can pay less fees and get the time we want without booking a year out....I will be happy with that and be glad to move on from all of this. Through no choice of our own we have been patient and it looks like we will need another 1-3 years of patience depending on our individual circumstances. Other than that it sounds like we can try to contact Lou Soloman at the AG's office and or TMC for any follow up information.

My most urgent question is, what will the fees be moving forward??

stevenw317 wrote:

Nathan, Deborah and Howard all obviously have received different advice on deductibility. So it seems clear to me that there is st worst uncertainty on the matter. When I inquired of TMC counsel many years ago I was advised that their position at that time was that approx 75% of the maintenance was deductible, akin to the factors (RE taxes, mtge interest) that are included in co-op maintenance. And for those who use the TMC for business purposes, my understanding is that lodging expense away from home is fully deductible against business income.

Hi Deborah, Any real estate taxes that you actually pay are deductible, just like auto excise taxes, or state income taxes (unless the rules change...) But interest and maintenance fees are never deductible for people who bought for personal use and not deductible for business use unless it was structured properly. I can’t say it any more clearly than that.

You are absolutely correct as far as the final resolution of this mess goes. As I said a while back, we are just entering phase 2. Its a complex situation that needs to be unwound. The AG is not going to get involved in what is essentially a civil matter. And heaven forbid that the agreement of 15000 MC ownersis required to make meaningful changes! I hope for the best, but don’t realistically expect anything to happen soon.