FROM LAWYER JEAN MARC ZIMMERMAN: Dear TMC Timeshare Owners: Some of you have inquired how, as part of our suit on behalf of a subset of owners, we could purport to seek a sale of the building. The answer lies in TMC’s corporate structure, wherein The Timeshare Association owns a Condominium, which owns the underlying real estate. More specifically, The Timeshare Association has the power to dissolve itself, and a court has the power to order its dissolution. Dissolution is a viable outcome given that the market for TMC units indicates that the restrictions placed on the property by the Eichners and their mismanagement have effectively driven the value of owners’ interests to zero, and indeed, based on an apparent demand to actively give up ownership by various owners, to less than zero. If, by employing a legal strategy we prefer at this juncture not to reveal publicly but are prepared to share with those clients who retain us, we succeed in dissolving The Timeshare Association, each owner will be entitled to a share of the value of the underlying building, though there may still be significant encumbrances. This share would be allocated regardless of whether a respective owner is our client or not. However, being our client offers the possibility of additional recovery and remedies that will not available to those owners who do not retain us. Specifically, those owners who retain us will have an opportunity to recover monetary damages for the various causes of action we assert as well as the possibility of being relieved of liability for maintenance fees and real estate taxes.
Based on comparable real estate values, we believe that the TMC building is worth as much as nine figures. In unlocking this value for the owners, we must challenge the Timeshare Association itself, which can voluntarily or under the significant duress (which we intend to impose), act for the benefit of its members.
Liquidation of the timeshare owners’ interests is by no means the only legal option we are considering pursuing, and our strategy does not foreclose alternates. Allowing the Timeshare Association to endure, while fixing the management agreement, might solve the ongoing problems. Regardless of the strategy ultimately pursued, our action is not predicated on being able to make a deal with those who have persistently abused our clients in the past, i.e., the Eichners, and should the result be a reformulated timeshare, it is our intention to negotiate the underlying legal structures from scratch such that the interests of the owners are properly protected vis-à-vis the timeshare operator. We previously laid out on Redweek, portions of our strategy, which has evolved overtime to address the message we have consistently received from our clients and potential clients since we began investigating this matter months ago; they want OUT of TMC, with a reasonable chance of compensation for their damages and capital investment. Finally, some owners question whether they should continue to continue pay their maintenance fees. There is no clear-cut answer as our representation does not depend on an owner being in good standing with the association. On the one hand, an owner’s legal position is enhanced if they are up to date on their maintenance fees and are therefore eligible to vote on TMC matters, e.g. election of the Board of Directors, since we will seek to challenge the Board and having vote-eligible clients is beneficial to our position. On the other hand, our position is that the maintenance fees have been improperly imposed, and therefore are arguably not due and payable in the amount requested by TMC. As we understand the issue, maintenance fees costs are approximately equivalent to the cost of a comparable hotel room for one week in New York City. Therefore, if you gain value from ownership commensurate with the costs, there is, from our perspective, no strategic reason not to pay. Ultimately, the decision is one that each owner has to decide for themselves.
Jean-Marc Zimmerman Zimmerman Law Group 233 Watchung Fork Westfield, NJ 07090 jmz@tmcsuit.com
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