Manhattan Club Lawsuit

MC owners opened a lawsuite / class action in regards to the MC resrvations.

Everyone who is inerested to join the class action please contact me at alexcrystal22@gmail.com

You will be asked to fill out the Survey and send it or email the lawyer's office. It is urgent! Regards, Alex

We have requested membership to the yahoo group and are enthusiastic for the class action suit to be underway. It has been a horrible situation with the mc. We bought in 2001. A few good days and then years of frustration. What a terrible scam. We love NYC. To be taken advantage of in this manner of overselling and renting rooms to the public is outrageous (not to mention the fees!). We have passed this information on to our friends who are also trapped by these scoundrels of greed. Sher

please send us information on the class action lawsuite. We own at MC and have never used it. We bought in 2008, what a mess we have! Charlotte cwilliamson66@msn.com

Hi davide380, If you like to participate in the MC Survey for the Class Action Lawsuit please email corspeak77@yahoo.com or alexcrystal22@gmail.com. Please provide your name on your Contract and Unit # . We will send you the Survey.

Thanks,

Alex

Alex, Can you outline the lawsuit for me? i have been a member for several years and have not been able to use days even when I call months in advance! I will email you at your posted address with my contract number. Best regards, Mark Benson

http://www.crainsnewyork.com/article/20110713/REAL_ESTATE/110719963

Ritzy NYC time-share developer sued for fraud

Buyers of shares in The Manhattan Club allege developer Ian Bruce Eichner is letting anybody but them into his West 56th Street hot spot; say they paid up to $53,000 for little.

A lawsuit has been filed against developer Ian Bruce Eichner and other owners and operators of The Manhattan Club, the city's first time-share condominium resort late last month. The suit accuses Mr. Eichner and other entities of fraud and “breach of implied covenant of good faith and fair dealing,” according to court documents. Five time-share owners in The Manhattan Club, located in The Park Central Hotel at 200 W. 56th St., are alleging that “through a coordinated and uniform marketing strategy, defendants fraudulently create and maintain the impression that access to and beneficial use of timeshare units in The Manhattan Club is completely or almost completely limited to timeshare ownership interests,” the court filing dated June 28 said. “The sponsors and other entities are being sued for committing fraud,” said Steven Blau of the law firm of Blau Brown & Leonard, which represents the plaintiffs. “Timeshare owners paid valuable money and they are not being permitted to use the apartment, even if they are requesting the unit nine months to a year early.” Mr. Eichner declined to comment. The suit suggests that there's an easy explanation for that. The defendants “intentionally and fraudulently engage in the continuous and unconscionable practice of overselling the occupancy capacity of the 286 time-share units by renting them throughout the year to the general public through Expedia, Hotel.com and other Internet-based travel websites,” according to the lawsuit. “As a result, a significant percentage of holders of flexible timeshare ownership interests are precluded from reserving the use and occupancy of their time-share units…and are routinely told by defendants that ‘availability is on a first-come first serve basis' and ‘there are no available [units].'” The Manhattan Club's management company, which is also run by the developer, earns 20% of gross revenues from the general public which rents the units, according to Mr. Blau. Meanwhile, he insists that “the owners get nothing and have to pay real estate taxes, time-share charges and for the mortgage on their time-share interest.” Purchasers of the time-shares spent roughly $10,000 to $53,000 depending on the type and size of unit. The sponsor also offered buyers up to 90% financing, with terms of up to 15 years with varying interest rates of up to an 18% fixed-rate, the filing said. Therefore, the defendants are also making money from the plaintiffs via mortgage payments. “It's in the best interest of the sponsor, who runs the management company, to rent it to strangers because when owners use of the apartment they make nothing,” Mr. Blau said. The Manhattan Club is located in a mixed-use property that is also home to The Park Central Hotel. Mr. Eichner converted some of the hotel into time-share condos in 1996. The plaintiffs are seeking to recoup unspecified monetary damages.

http://therealdeal.com/newyork/articles/timeshare-owners-sue-bruce-eicher-over-access-to-manhattan-club/comments

Timeshare owners sue Eichner over access to Manhattan Club

Five timeshare owners in the Manhattan Club in the Park Central Hotel at 200 West 56th Street, a timeshare condominium resort, are suing developer Bruce Eichner and the club's other owners for fraud and "breach of implied covenant of good faith and fair dealing," according to court documents, Crain's reported.

The timeshare owners allege that Eichner is not granting them access to their timeshares, despite booking up to nine months in advance, and is instead renting them out to the general public.

"Through a coordinated and uniform marketing strategy, defendants fraudulently create and maintain the impression that access to and beneficial use of timeshare units in the Manhattan Club is completely or almost completely limited to timeshare ownership interests," the court filing says, but the reality is allegedly otherwise.

"Timeshare owners paid valuable money and they are not being permitted to use the apartment," said Steven Blau of the law firm of Blau Brown & Leonard, which represents the plaintiffs.

Instead, Eichner is allegedly renting out the units to the public through travel websites such as Expedia. "It's in the best interest of the sponsor, who runs the management company, to rent it to strangers because when owners use of the apartment they make nothing," Blau said.

Buyers spent from $10,000 to $53,000 for access to the units, depending on the type and size of unit, according to Crain's. [Crain's]

TAGS: 200 WEST 56TH STREET BLAU BROWN LEONARD BRUCE EICHNER LAWSUIT MANHATTAN CLUB * * * Please read the comments!

http://therealdeal.com/newyork/articles/timing-new-york%E2%80%99s-timeshares--2

Timing New York’s timeshares

While some say the tiny market for shared apartments will expand, others say they’re too costly to develop and have high foreclosure rates August 01, 2011 07:00AM By Adam Fusfeld

For all the unconventional housing arrangements people devise to afford living in New York City, the timeshare, historically, has not been one of them. There are just two timeshare-only buildings in all of Manhattan. And, at first blush, the owners of those timeshares -- at the 161-unit Hilton Grand Vacations Club on West 57th Street and the 300-unit Manhattan Club on West 56th Street -- appear to be struggling. Since opening in 2009, the Hilton Grand has seen 52 lis pendens, or pre-foreclosure filings, and six foreclosures among its timeshare owners. Meanwhile, the Manhattan Club has witnessed 17 lis pendens and 22 foreclosures since 2007, according to real estate data website PropertyShark. If you include data from Manhattan's other big block of timeshares -- 72 units on the top two floors of 1335 Sixth Avenue, which share the building with the Hilton Club hotel -- the totals balloon to 285 total lis pendens and 108 total foreclosures spread over a pool of 533 units. (There are other scattered timeshare units throughout the city, but no comprehensive list of those units is publicly available). With all of that distress, it might appear obvious why no developer has swooped in to expand Manhattan's very small timeshare market. But those first-glance numbers don't tell the whole story. Firstly, timeshares can be expensive, meaning they may only appeal to a small group of buyers. The average cost of a week at the Hilton Grand is between $40,000 and $60,000, according to Michael Brown, executive vice president of sales and marketing for Hilton's U.S. Division; he noted that the price can climb to $165,000 for a high-demand week such as Christmas in New York. Also, the sponsors often act as lenders to buyers in need of financing , and the money doesn't come cheap. Buyers often put 20 percent down, just as many apartment buyers do, although they face higher interest rates. According to Mark Eble, a senior vice president at hospitality advisory firm PKF Consulting, a 15 percent interest rate is standard nationally for such loans. And buyers are limited in when they can use units. Owners pay for the right to a week in a specific unit type (most commonly a studio or a one-bedroom) -- during a specified season, but they're not guaranteed the same unit each time. So, each unit can be sold to upward of 50 shareholders. (Generally, one to two weeks are left unbooked, so that the unit can undergo maintenance.) Under this structure, if one of a unit's owners defaults, it's not necessarily bad news for the building owner. The building owner simply puts the unit back on the market, and ultimately generates even more revenue because another buyer means another down payment. One obstacle developers face is marketing costs, especially in an economic environment like this. Unlike typical condo sales, where just one buyer is needed per unit, it can take years to completely sell out even a single timeshare unit. "Twenty to 30 percent of the cost of timeshares is derived from marketing and sales," Eble estimated. Given that lengthy sell-out process, it's easy to see why timeshares have been far less popular with developers than hotels. (There's also the fact that as far as consumers are concerned, hotels have more brand recognition, and that timeshares haven't fully shaken off the idea that they're somehow fraudulent -- a reputation they earned when they first became popular in the 1950s, Eble said.) The two most recently developed timeshare properties in Manhattan are owned by Hilton Worldwide. In 2002, the company converted the top two floors of 1335 Sixth from hotel rooms into timeshares. Those timeshares sold out, and in the wake of its success, Hilton introduced the 57th Street ground-up timeshare in 2009. Brown said the former has 3,100 owners (some owners take more than one week), while the latter is "ahead of projections," as nearly 75 percent of its inventory is sold. According to Brown, less than 4 percent of the owners of the New York properties are in some stage of foreclosure (though that is much higher than Manhattan's overall residential foreclosure rate). There are those who doubt whether Manhattan will see more timeshare development in the future. Skeptics include Bruce Eichner, who developed the Manhattan Club, which debuted as the first New York timeshare in 1997. "I don't believe the Manhattan timeshares have made any money for Hilton whatsoever," said Eichner, chairman of Continuum Construction, which still manages the Manhattan Club. "It has to be a loser." But Brown called the project a "success," noting that owner occupancy has been high, and said Hilton is interested in "future projects in Manhattan." "Since sales of West 57th Street began, we've been attracting owners who return to New York City several times a year," he said. Eichner said he believes Hilton converted part of 1335 Sixth, and eventually built the second Hilton Club, for the benefit of its internal timeshare exchange program, which allows owners to trade their week in, say, Disney World, for a corresponding week sightseeing in the Big Apple. "New York has the highest 'trading power' of any timeshare market in our system," said Gordon Gurnik, president of Resort Condominiums International, which first developed the exchange concept in the 1970s and currently has 3.5 million members. According to RCI -- which is not affiliated with any Manhattan timeshares, but has a system that allows customers to find timeshares here -- New York is the most coveted destination. "There's more demand than our system can handle, so we book hotels to accommodate some of our customers," Gurnik added. Brown agreed that New York "is in high demand," and said that one aspect of Hilton's decision to build in New York was its internal exchange program. While he wouldn't comment on the building's financials, he argued that if the converted part of 1335 Sixth wasn't successful, "we wouldn't have built the 57th Street timeshare." But according to Eichner, "you simply cannot make any money under the current market conditions in New York." But Eichner claimed he earned four to five times his investment in the Manhattan Club back in the 1990s. When he bought the building at 200 West 56th Street in 1997, he paid $100,000 per room in acquisition and renovation costs. Now the building has 15,000 owners, some of whom bought the most coveted weeks for as much as $50,000. Eichner said today an investor couldn't develop a timeshare for $100,000 a room. He estimated, on the low end, that rooms in Midtown would cost seven to eight times what they did when he bought them. "I can't charge seven to eight times what I do now, though," he said.

According to Crain's, Eichner and the other owners and operators of the Manhattan Club were sued last month by five timeshare owners who claimed they were overselling the facility and making it impossible for them to book stays -- even well in advance. While Eichner declined to comment on the lawsuit, before it was filed he told The Real Deal that Manhattan Club has a 5 percent vacancy rate.

Several other insiders doubted the viability of another timeshare in New York. But Gurnik said the demand for timeshares here is so high, that it's only a matter of time before more developers pursue them in the city. "Timeshares are a great way for developers to maximize their return and monetize their asset," he said. "It might take more time to sell, but you can generate more revenue by orders of magnitude." PKF's Eble disagreed. Because of the effort needed to sell units, he noted that timeshares are simply too illiquid to overcome the costs of development.

"Timeshares can be exceptionally profitable," he said. "But if you believe in efficient markets, the cost of all that goes in to creating and marketing a timeshare in the city is evidently providing a hurdle that's too high for developers to cross."

SHARE COMMENTS(2) Darnesha Hey, that post leaves me feeling fooslih. Kudos to you!

Comment #1 Posted By: Darnesha 08/18/11 MC owner 'So, each unit can be sold to upward of 50 shareholders. (Generally, one to two weeks are left unbooked, so that the unit can undergo maintenance.) ' That what is supposed to be. In case with Eichner, he goes much smarter. Manhattan Club created 22 different types of interest - annual, holiday, split, bi-annual, tri-annual, and so on. That gives a chance to sell a unit multiple times. The owners are eliminated with the access, but according to the MC budget, MC makes big money. Now MC came up with a new idea: quad-annual. The most owners will never see their 'deeded' units in the nearest future. Comment #2 Posted By: MC owner 09/06/11

LET'S GET ON WITH THE LAWSUIT AGAINST BRUCE EICHNER AND THE MC. THE SOONER WE GET THIS SUIT MOVING, THE SOONER WE'LL GET WHAT WE PAID FOR, IN ADDITION TO BEING TREATED LIKE OWNERS INSTEAD OF PEOPLE WALKING IN AND GETTING RESERVATIONS T H A T D A Y!!....NON-OWNERS THAT IS!!!!!

I wish you all the best with this suit. I came to end of my MC rope when fees had increased from apprx $500/yr to just under 2 grand in 10 years with no end in sight and being told that there was no vacancy when I would call for time. So, I "reversed sold" my share back to the Club. It was worth it, to end all the hazzles including fraudulent use of my cc by some one at the club, and consequently being harrassed to pay, by credit!, the fee and RE tax, months in advance of my anniversary date, which was stated as THE due date on my contract. I am so relieved to be out of it. Best wishes.

Hi, ex-owners can still participate in the law suite. You just need to fill out the survey and send it to the law firm. If you are interested we'll send you a survey. For this purpose please provide your email address . EVERY PERSON IS VALUABLE !

alexc100 wrote:

Hi, ex-owners can still participate in the law suite. You just need to fill out the survey and send it to the law firm. If you are interested we'll send you a survey. For this purpose please provide your email address . EVERY PERSON IS VALUABLE !

how exactly does one go about 'reverse selling' a share back to the club? do they give you a fair price at least? this place is baaaaadddd neeewwssss. the lawsuit is right on point.

klh5 wrote:

I wish you all the best with this suit. I came to end of my MC rope when fees had increased from apprx $500/yr to just under 2 grand in 10 years with no end in sight and being told that there was no vacancy when I would call for time. So, I "reversed sold" my share back to the Club. It was worth it, to end all the hazzles including fraudulent use of my cc by some one at the club, and consequently being harrassed to pay, by credit!, the fee and RE tax, months in advance of my anniversary date, which was stated as THE due date on my contract. I am so relieved to be out of it. Best wishes.

Only owned there for 18-months but horrible experience on all levels. Between the outragious new fees and the non-responsiveness of their staff in trying to secure nights, it's been a mess. We bought one of the recent upgraded suites but they have yet to put us in one - now they tellme I have to request that. Let me know how I can help sowe can all get out ofthis mess.

Alec,

We completed a survey and submitted it to the law firm noted. Again this year could not use all our nights before the cut off date December 6, 2011 I've been calling since February 2011. Almost weekly the last few months and could not get a room. Three nights remain for this year. I have been harrassed by Owners Services each time during the stay for an "Owner's update". We can earn $50 food Park Cental Hotel restaurant) credit to spend fifteen minutes discussing updates.hotel restaurant. I declined the first time when called about five minutes after arriving in the room. The second time, I went to the "Owner's Update" to see what their "update" was all about and how they desparately needed to share with important new information with current "Owners". They wanted me to buy back three-four nights! Starting at Two thousand dollars! I was so angry I said to the salesman, "how about you buy back the three or four nights from us? Or the timeshare because it's not worked out the way it was presented when we got the sales pitch to buy it". Of course my offer was declined. The gentlemen quickly put his pencil down and started to walked me toward the elevator. That's where i met a group of gentlemen who were also leaving an "Owner update" meeting they were complaining about ownership and Mr. Eichner and his NY Urban Management team!! They (Eicher's management group) will find anyway possible to benefit for their gain by any means possible. How can these people sleep at night.....

Any word on the Class Action suit? Do you know how many owners are included now? Can we place an advertisement in the Crain's or NY times notifying owners to support the suit?

As an ex-owner I would like to participate in the lawsuit. Thanks, AYOUNG1626@aol.com

We are frustrated with the Manhattan Club and find the allegations true.We would like to be part of this suit.

I am not an owner but I have traded in The Manhattan Club in 2006 & 2011 via RCI. Each time it was very easy for me to get the week. In fact I turn down several weeks offered to me until I got the dates that worked best. I was even offered fleet week. I hope this information might help you as is became clear to me that non-owners are privileged over owners when booking reservations. My guess is it gets people in the door for sales presentations.

klh5 wrote:

I wish you all the best with this suit. I came to end of my MC rope when fees had increased from apprx $500/yr to just under 2 grand in 10 years with no end in sight and being told that there was no vacancy when I would call for time. So, I "reversed sold" my share back to the Club. It was worth it, to end all the hazzles including fraudulent use of my cc by some one at the club, and consequently being harrassed to pay, by credit!, the fee and RE tax, months in advance of my anniversary date, which was stated as THE due date on my contract. I am so relieved to be out of it. Best wishes.

I own a thimeshare at the Manhatten Club. I wish to join any and all lawsuits/class actions regarding the Manhatten Club. I believe the management is manipulating the owners. They have raised the maintenance fees to unreasonable and unjustifiable levels making ownership extremely costly in what appears to be an effort to force us to sell. However, since they have first right of refusal, they are also to a great extent controling the resale market for these properties. Please contact me at yumiandbob@gmail.com.