Manhattan Club Lawsuit

Thank you

For those owners following the daily in and outs of possible issues with the Manhattan Club, here is a quick update.

There are NO class-action lawsuits in the works, to my knowledge.

The next Board meeting may provide owners with a forum to air their issues --- if the board agrees to take questions about implementation of the settlement agreement with the Attorney General's office.

I would like to interview any owners contemplating running for the board, so please call if interested: 310-801-3479.

I met with two dozen owners at TMC recently over the course of two days. They run the gamut from generally happy owns to very disgruntled, including several who just want out. To my understanding, the club is keeping a list of owners who want to deed-back their intervals, but not acting on the list as of now.

All other issues seem to remain the same: the Eichner controlled board still manages the club while it operates strictly as a hotel. Maintenance fees continue to rise, without explanation from the board. The reservation system seems to have improved, for some, while still problematic for other owners. The AG's monitor and restitution claims process may be proceeding, but there are no indications it will come to fruition quickly, since the settlement agreement appears to give the Eichner group up to three years to exit upon finding a new company to take over management of TMC.

Thank you

I am not interested in paying any maintenance fees until the TMC is in good hands.

I'm not interested in paying my home property taxes, but I have no choice unless I want to pay 18% interest when I finally pay up. And of course my excellent credit score will be lowered..

The reason for the increase is documented in the 2018 budget. If you did not get a copy I will send you a copy

Thank you

jimm857 wrote:

I am not interested in paying any maintenance fees until the TMC is in good hands.

Completely understandable point of view.

I am a relatively happy owner in TMC, although not please with maintenance fees that have escalated to close to 100% to over $2K/year. Since I have been a relatively happy owner who has figured out out how to get my annual usage at the Club, I must admit I have never spent much time reviewing budget/board submissions. That said, I have never seen disclosed, of the 14,000+ owners, how many have refused to pay their fees and how much in total amount is now due. [I imagine this could be broken down into those participating & withholding payment as part of the AG action and those that have just fallen behind for financial reasons, etc.] I have not seen this disclosure/figure on the balance sheet. Presumably between the the increased fees we "paying" members have paid and what I am reading the Echner's have purportedly annually "subsidized" the Club with, TMC is/has been running close to break-even to this point. Is the situation then that the non-current/defaulting members either pay-up or have their ownership default back to the Club [us]. The Club [we] then have a less "oversold" club to enjoy albeit perhaps with even higher maintenance fees or to unwind and sell. Has their been any investigation of getting membership approval of a strategy where the property would be removed from its current "time-share" ownership structure and sold as prime NYC real property. Is this economically feasible [is there a profit to be made that could result in a return of capital to owner]?

Agree with your analysis - did you fill out the survey or email the lawyer Jean Marc Zimmerman yet?

Sorry; just picking up on this situation. I have not contacted Attorney Zimmerman or filled out any survey. Who is he and who does he represent - where does he fit into the circumstance? Thanks.

I “suspect” that those withholding M/Fees are in a few categories:

*Fed up with the TMC scam (how many millions did Eichner deposit into a shell company offering zero services annually?),

*Just simply gave up on paying these outrageous fees while not being able to obtain reservations....not everyone can book 9 months in advance,

*Those that aren’t physically able to travel,

*Those that have significant changes in their financial lives and have to prioritize their financial obligations with outrageous M/Fees being at the bottom!

Yes, I am a “paid up” member....for now.....but there will come a time when I will have to “pull the plug” as these outrageous M/Fees will exceed financial feasibility!!

Max Munn Tupelo, MS Week 52/53

After receiving the TMC new budget I elected to email the board members whose addresses were provided by Kevin on p.199 of this forum. In response, the following day I received a phone call and then an email from Mr. Dunphy. The concerns I voiced were my frustration over the continual increased fees and why their isn't any discussion of, or action on returning units for those who no longer want them. I have continued to pay the fees but I'm getting very close to them being due again. I love NYC and have been pleased with staying at TMC since 1998 but it has gotten cost prohibitive. His response was that they try very hard to keep costs down but daily housekeeping by union workers and laundry costs are very expensive. Nothing else related to this was mentioned other than he thanked me and the other members for his employment and that of all the other people who work at TMC.

As far as the take back of units for those who just want out for whatever reason, including me, he spent 5-10 min telling me he had no information on this because of the Attorney General. He spoke almost as though it wasn't settled yet and they were waiting for direction from the AG. I have scanned through the 27 page settlement document, but not being a legal person I don't see where this may or may not have been addressed. I might try to read every word. So I then posed this question to the AG office but have not heard back yet and probably won't anytime soon. If I hear anything more I will share.

Thanks Max. I will have to pull out the book/contractual documents from when we bought in, but my understanding from the "pitch" we received way back when was that TMC was a different kind of "timeshare" in that ownership included an actual fraction share of ownership in the terra firma/building. That seems consistent with us paying NYC taxes as part of our annual fees. If there are 14,000+ members and each paid between $20K & $40K to become an owner/member, our friends the Eichners [even after commissions to the slick sales folks we all met] must have done very well. Now we are in the situation where we have many members in arrears and the Eichners are under a settlement order with the AG to sell its interest in TMC. Since the Eichners have pocketed some significant percent of $280-560M, regardless of what the documents say, it does not see right/equitable that the Eichners should have anything left to sell other than some right/obligation to "manage" TMC [and that we owners/members should have an oar in the water when it comes to picking a new manager since we collectively paid the $280-$560M]. It seems to me that the equitable result should be that the 14,000 accede to the management of the terra firma/building [and ownership if my assumption is incorrect that members/owners already own it] and to figuring out what happens to members/owners who are in-arrears with their maintenance fees - [hence my question a couple of days ago on how many "paid-up" and in arrears members/owners and how much in total is owed]. From my perspective, given the legitimate issues with the Eichners management and sales practices, if there is a way for the member/owners to "take over" ownership/management, then each in-arrears owner/member could be given the option of paying-up on all of their past due fees [with or without some sort of interest charge] or walking away from his or her investment in TMC. Any of this make sense or is someone/group already working on this or something similar?

Hi Jon,

Sounds like a quite reasonable position. Except that after 3 years of negotiation by the AG who has unlimited resources, a settlement has already been reached. Now I understand that lots of folks on this thread aren't happy with the settlement. And there is yet another Attorney gathering names. But as you consider undertaking a new effort to remake the MC or the settlement, read the 200 pages of this thread to get a sense of the range of opinions and sophistication of your fellow owners. I don't think anyone expects much from the settlement except closure; and the best measure to quickly satisfy a large number of disgruntled owners is the lifting of the freeze on transfers. And that is up to the AG, not the MC. By taking back deeds from owners in arrears, it does not change the Club's income position. It just clears the decks and let's everyone move forward.

Yes it make sense. I couldn't figure out how Eichners had anything to sell considering they had already sold it to so many people. Find a new management company though? Yes I think that would be their mandate.

Please read the settlement. It does mandate a change in management. It also precludes the current managers from working in the TimeShare industry in the state of NY. I disagree with the above post that 'it's over' and the AG is to blame for our current state of flux. The NY AG did not represent the TimeShare owners. The AG settlement does nothing to make us whole.

It's the Eichner's that have created a situation where the value of our units is close to zero. In the Eichner's defense that's also an industry wide problem. Used TimeShares have very little relationship to retail purchase prices.

I also believe the premise of there being a freeze on the sale or purchase of units does not include us. In many ways it's a good thing in that it won't reward the Eichner's by allowing a flood of units to be deeded back to them - just so they can troll for more victims. I'm not buying that the costs to run the facility are wholly inflated by the house cleaning unions. That claim is a deflection of the reality of millions that were skimmed from the owners over many years.

Hooray! You have nailed this right on head in every regard.

roberts714 wrote:

Please read the settlement. It does mandate a change in management. It also precludes the current managers from working in the TimeShare industry in the state of NY. I disagree with the above post that 'it's over' and the AG is to blame for our current state of flux. The NY AG did not represent the TimeShare owners. The AG settlement does nothing to make us whole.

It's the Eichner's that have created a situation where the value of our units is close to zero. In the Eichner's defense that's also an industry wide problem. Used TimeShares have very little relationship to retail purchase prices.

I also believe the premise of there being a freeze on the sale or purchase of units does not include us. In many ways it's a good thing in that it won't reward the Eichner's by allowing a flood of units to be deeded back to them - just so they can troll for more victims. I'm not buying that the costs to run the facility are wholly inflated by the house cleaning unions. That claim is a deflection of the reality of millions that were skimmed from the owners over many years.

Robert: thanks for your input. I agree; in looking at the settlement, we "owners" are not precluded from selling; it is just no buyer would see any value in the current ownership interests. Does anyone know what the Eichners still "own" other than the right to manage which is, of course, subject to the AG settlement divestiture. Who controls whether new ownership "units" are or can be sold? Where do ownership units go if owners default on maintenance fees? I assume some current owners bought on the financing [provided by the Eichners?]. If the owner defaulted on the financing, I should think the financing provider then gets the unit and with it the obligation to pay any arrearage and the ongoing maintenance fee. Is this correct? How many units are thus owned by the Eichners or other financing providers. Again trying to get to a discussion of who owns and controls TMC and could make decisions on running TMC going forward or liquidating.

I would like to confirm that I am on the list for the Class action Lawsuit for the Manhattan Club. My name is Rosalie Macaluso, 172 Union Street, 1R, Brooklyn, NY 11231. My email is as above lilroe418@ aol.com, my phone # is 646-423-0003. Please call & confirm this, as it has been a few years now, and I have never hear anything about it. I am an owner, but as of last year cannot afford to pay the high maintenance fees, taxes etc. Please advise by phone asap. Thank you Rosalie Macaluso