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Re: Manhattan Club Ownership? (by Steven H.):

The Manhattan Club is organized as a condo, with a board of three members controlled by the Sponsor, under which The Manhattan Club Timeshare Association Inc., a not-for-profit corporation established as a timeshare, with a board of seven members also controlled by the Sponsor. For the most part, rooms in the facility are owned by members with partial shares, and these interests are pooled in the timeshare association, subject to the reservation rules, etc. There are in excess of 14,000 members, but the number in good standing with the right to vote in elections is not reported.

The Sponsor, who is currently a group of entities related to the Eichners, own certain interests, control the board of both the timeshare association, and the condo. BlueGreen entered into a transaction with the Eichners to assume the role of Sponsor after the NYAG "Assurance of Discontinuance" (AOD), but that agreement was terminated.

BlueGreen describes its current predicament as follows:

On August 30, 2020, over 100 VOI owners at The Manhattan Club (“TMC”) sued BVU and certain unaffiliated entities (the “Non-Bluegreen Defendants”). The complaint includes claims arising out of alleged misrepresentations made during the sale of VOIs at TMC and certain post-sale operational practices, including allegedly charging owners excessive annual maintenance fees and implementing reservation policies that the restrict the ability of VOI owners to use their points to access the resort while allowing the general public to make reservations. The plaintiffs assert in the complaint that Bluegreen acquired operational control of TMC from the Non-Bluegreen Defendants in 2018 and assumed joint liability for any prior wrongdoing by them. We believe this assertion to be erroneous and that the claims against BVU are without merit. Accordingly, we have moved to dismiss the claims against BVU.

Termination of Manhattan Club Purchase and Sale Agreement

On March 15, 2018, BVU entered into an Agreement for Purchase and Sale of Assets (“Purchase and Sale Agreement”) with T. Park Central, LLC, O. Park Central, LLC, and New York Urban Ownership Management, LLC (collectively “New York Urban”), which provided for BVU’s purchase of The Manhattan Club inventory over a number of years and the assumption of the management contract with The Manhattan Club HOA anticipated to occur in 2021. On October 7, 2019, New York Urban initiated arbitration proceedings against BVU alleging that The Manhattan Club HOA (of which BVU is a member) was obligated to pay an increased management fee to a New York Urban affiliate and that this higher amount would be the benchmark for BVU’s purchase of the management contract under the Purchase and Sale Agreement. New York Urban also sought damages in the arbitration proceedings in excess of $10 million for promissory estoppel and tortious interference. BVU denied New York Urban’s claims and terminated the Purchase and Sale Agreement and the related Security Agreement based on, among other things, New York Urban prematurely initiating arbitration in violation of the Purchase and Sale Agreement. On November 25, 2019, New York Urban sent its own Notice of Termination of the Purchase and Sale Agreement and a separate letter containing an offer to compromise if BVU resigned its position on the Manhattan Club HOA board and permitted New York Urban to enforce its rights under the Security Agreement. On November 29, 2019, BVU accepted the offer. BVU has provided New York Urban with resignations of its members on the Manhattan Club HOA board consistent with the parties’ settlement agreement and believes it has fulfilled all of its legal obligations under the settlement.

The AOD requires, in part:

61. Respondents [the Eichners and related entities] and their agents and employees, including The Manhattan Club Timeshare Association, Inc., shall not engage in any act directly or indirectly relating to the offer, purchase, sale, issuance, advertisement, marketing, promotion, distribution, negotiation, exchange or transfer of any timeshare interest; provided, however, that Respondents shall have the right to directly complete the sale of ownership interests in The Manhattan Club, and to provide financing for the purchase of such ownership interests, to the approximately fifteen purchasers of timeshare ownership interests who executed contracts to purchase such interests in May, June and July 2014, and who are offered the option to rescind their contracts for a period of 30 days from receiving notice of the rescission option, but do not elect to so rescind and wish to close. Notwithstanding the foregoing, Sponsors may transfer their current ownership interests in The Manhattan Club solely as provided for herein.

62. Respondents shall enter into an agreement with the third-party operator of timeshare properties (''TMC Purchaser'') [BlueGreen] previously identified to the OAG on or about July 28, 2017, or to such other third party purchaser approved by the OAG to own and sell timeshare interests in New York, whereby (i) T. Park and O. Park shall enter into an agreement with a third-party to transfer timeshare interests from existing owners to TMC Purchaser, all their timeshare interests in The Manhattan Club, and (ii) after three years of management, Urban will transfer to TMC Purchaser or its assignee the Management Agreement (the '"TMC transfer").

63. All Sponsor-appointed current officers and directors will resign from their positions as members of the Board of the Timeshare Association at the time of the first transfer of interests to TMC Purchaser, and TMC Purchaser will appoint replacement officers and directors.

64. In the unlikely event of a default on the agreement by TMC Purchaser, and if TMC Purchaser fails to cure after any required notice is given and any applicable cure period bas expired (a "Default''), and if at the time of the Default Sponsors then continue to own any timeshare interests (the ''Remaining Interests"), then the following provisions shall apply:

a) Sponsors shall notify OAG of the Default;

b) Sponsors shall seek to sell their Remaining Interests to a third party entity unaffiliated with any Respondent and to no other person, consumer, or entity;

c) Sponsors shall advise OAG of the identity of the proposed transferee;

d) Sponsors shall be free to appoint board members to the Timeshare Association Board to replace any members appointed by TMC Purchaser who resign as a result of the Default; the Sponsor appointed board members shall recuse themselves from any and all votes involving in any way any of the Respondents or affiliated entities;

e) Sponsors shall propose an independent monitor ("Monitor'') to ensure that the Manhattan Club is operated in accordance with the offering plan then on file with the OAG and that Sponsor does not sell any timeshare interests except as provided in paragraph 62 above; OAG shall have the right to approve any Monitor proposed by Sponsors before such Monitor shall be appointed. If approval is not given for a proposed Monitor, Sponsors shall propose a different Monitor until such time as OAG approves of the proposed Monitor;

f) The Monitor shall have full and complete access to all books, records, information and personnel of all Respondents to ensure fall compliance with the terms of this Assurance;

g) If the Management Agreement reverts back to Urban or any entity affiliated with any of the Respondents as a result of the Default or for any reason, the Respondents agree that the Management Fee will be limited to 15% of expenses actually paid, not including the Management Fee.