The recent acquisition of Club Intrawest now Embarc Resorts by Diamond Resorts International highlights the growing frustration of member resorts owning over 95% but controlling nothing.
Since the 2015 acquisition of Club Intrawest by Diamond Resorts there has been a ground swell of member activity to gain some control and accountability in the management of the vacation resorts owned by the members. At issue is the financial management of the club, how fees are extract but not put back into the club, and most importantly, how members were lead to believe that they were buying into a community time share that would be run in the interest of the members.
A push by the current members group called “CI The Owners Group” has published a website to help inform members on disclosure and to hold the current Embarc Resorts board accountable for its decision process. In an effort to reach the membership of the former Club Intrawest on the matter, DRI is blocking the owner’s group actions. Here is an excerpt from the Club Intrawest owners group website:
“DRI now controls Club Intrawest, which has 22,000 members that own ~ 95% of the club’s 4.3 million points.
Over the past five months, members have attempted to access the board members, club documentation, and other members, but to no avail. The club’s board, controlled by DRI, has
- refused to talk to members
- banned some members from their social media platforms (e.g. facebook, twitter)
- hired a DRI employee to answer the board emails (stock answers)
- refuses to acknowledge when they have broken their own bylaws
- blocks members from communicating with each other electronically and at the clubs
- ignored requests for the resignation of Ken Smith who, as a board member responsible for the finance and accounting committee, has been admonished by his own accounting society
- refuses to explain why the club is still in litigation with the Tax Court of Canada over a $1.9M GST assessment, which has never been explained to members (even though they use members’ dues to pay for the legal fees)1
With the insistence of a group of members, the board was forced to allow a special general meeting to take place, after more than 5% of members requested it. However, for the upcoming June 18th meeting, the board has ignored all agenda items submitted by members and has instead turned the meeting into a sales activity by DRI to sell more points to members.
Members are now seeking ways to contact each other and to force the board of directors to extend the meeting time and add the original agenda items that members were requested, which include member representation on the board of directors, access to all club documentation, detailed information on ongoing litigation with the Tax Court of Canada, and the resignation of Ken Smith.”
Addition information on the core issues can be found in a very detailed power point presentation located at the website link: http://citheownersgroup.wix.com/home#!manifesto/zgqfi . It outlines in painful detail for the owner members the illusion of member participation on the board and how DRI manipulates the outcomes in their own interest, not the members.
In an effort by the member to have a “real” member elected to the management board, there is a Special General Meeting being held by the Embarc Member Association on June 18, 2016. Detail are below and can be found at: http://citheownersgroup.wix.com/home#!special-general-meeting/zwi5t
SPECIAL GENERAL MEETING: JUNE 18, 2016 VANCOUVER BC
The Special General Meeting of the Embarc Members Association will be held on Saturday, June 18, 2016 in the Grand Ballroom on the lower level of the North Tower of the Sheraton Wall Center Hotel at 1088 Burrard Street, Vancouver, B.C. Registration will commence at 8:00 a.m. and the meeting will start promptly at 10:00 a.m. and adjourn no later than 12:00 p.m. PST. Please see registration upon your arrival.
Members will need to present their membership card or certificate for proof of membership along with picture identification at the registration desk. Members or proxies without proof of membership or identification will not be allowed to attend the meeting. Please note that only members or their assigned proxy will be able to attend and be present at the meeting. No guests will be allowed into the meeting.
The presence, in person or by proxy, of members representing not less than fifteen percent (15%) of the Voting Power residing in members other than the Declarant Members shall constitute a quorum at all meetings of the Club. If members are unable to attend in person, they can appoint another member by completing the Proxy Form.
Additional Embarc Resorts Notes and Updates:
- Read the Appeal and Judgement (PDF) – Beyond the GST situation itself, the arguments presented by The Honourable Justice Steven K. D’Arcy provide excellent insight into how the club is structured, who owns what, who has control over what, etc. (up to page 41).
- See video below illustrating common client frustration with membership as real estate.
- Recent Note from Member on Facebook illustrating issues (see below – Common Embarc Resorts Client Concerns and Frustrations)
Club Intrawest Owners Group Update (EMBARC), April 2018 from Facebook
Patrick Cormier to Club Intrawest Owners Group (EMBARC)
Hello everyone! Today, the Volunteers Coordination Committee (VCC) met for a full day in Tremblant to discuss a wide range of issues. You can find enclosed our Record of Decisions, slightly redacted for a portion of the legal strategy.
Key highlights are:
– We have begun setting up a new Embarc Owners Association (EOA). VCC members will be the original administrators of this association. Elections for this association will be held in one year. Between now and this summer, we are developing a value proposition for members. We have high hopes you will join this Association!
– We have paused our strategy of requesting independent director Konrad Kawalec to submit to the Board requests for change. Why? The President of the Board refused to even put up as an agenda item, at today’s Board meeting, our request sent through Konrad of enhancing transparency of requests by the independent director and related Board decisions. We find that until this stance is reversed by the Board, there is no point in trying to advance the interests of Embarc members via the independent director if even such a non threatening, low key agenda item request is not even put up for discussion by the Board;
– Legal strategy will include supporting the Martin Robichaud class action. Considering the legal issues that have already been certified by the Superior Court, we will let that case shed light on the ownership issue rather than instigating something separately;
– We are temporarily suspending our volunteer recruitment efforts until we are a little further advanced in setting up EOA;
– We have scheduled a series of communications to CIOG members during the upcoming 4 weeks election period.
Stay vacationed, but stay aware!
Common Embarc Resorts Client Concerns and Frustrations
The follow is a post taken from the Embarc Members Facebook page. It show the common concerns and misrepresentation of both Intrawest and Embrac. The bold emphasis is added.
“GOOD AFTERNOON ALL..Hope you are all well. Since it is a cold, Sunday afternoon, I had the time to send the attached to our Board of Directors. Please feel free to make any comments you like. Have a great week.
My wife and I have purchased 280 points since 2012, and our member number is 1-XXXXXX. This way you can verify our membership if you need to as you address the concerns that we have.
First of all, we recognize that yours is sometimes a thankless job. To paraphrase Mr. Lincoln, You can please some of the people all of the time and all of the people some of the time, but you cannot please all of the people all of the time. Having said this, we have some significant concerns about our membership, how it was presented to us and some financial issues that have developed over the years.
First, in five (5) separate sales transactions since 2012, we were assured that we were purchasing deeded real estate. These sales were in two provinces, Quebec and British Columbia. With the recent GST court decisions, we were very dismayed and surprised to learn that we DO NOT have deeded interest in any real property that is owned by the club or the trust, but that we only have a right to occupy based on the points that we have. This is directly contradicts what we were told by sales representatives, agents of and for the developer. This has served to devalue our points. This also raises significant questions in terms of what our annual dues/membership fees are actually for. If the courts have decided that it is the developer/manager that is required to keep the properties in good condition so that the members can occur them, then why are the member charged for property upgrades and general maintenance if all we have is the right to occupy?? This makes the dues statements misleading at best or a case of ENRON accounting.
The second concern is that since 2011 monies have been levied against the membership to defray any expense caused by the GST decision. Nothing in the sales presentation informed prospective buyers of this situation, yet they have been paying an increase fee since 2011. The most alarming part of this is that the BOD voted that this retained money WOULD NOT go back to the membership if not needed for the GST issue. I could live with that if the funds were used to maintain the clubs, which would lower the dues, but not if it is just a redistribution of wealth from the members to the developer, which it appears to be if the manager is allowed to retain almost $ 11,000,000 +/-, WITHOUT any beneficial interest back to the members that paid the fees to begin with. This leads me to believe that the dues statements are creative accounting, especially when the G & A for 2017-2018 has increased 45% from 2016-2017. If any other business had an G & A increase of that amount, either they are overstaffed, mismanaged or using very liberal accounting practices. Which is it in this case??
Next, the dues are really getting out of line for the right to occupy when members cannot get into resorts when they wan because available accommodation has been put on sites like Booking.com. Again, we were always told that members always had first right of occupancy. So, why don’t we?
Then there is the issue of declining or almost nonexistent value to the initial investment. We have put a significant amount of hard earned money into buying points being again assured that the club would do what was needed to protect our investment. So unless we were deliberately lied to by agents of the developer, what is being done to protect our value, or failing that how can devise our points without losing our collective shirts and waiting until the Second Coming for the repurchase program???
Finally, one of the reasons we purchased was that we could convert our points to HHonors points. That is attractive to us, as US buyers, so we could get beneficial use in the US. This went away in 2016 with the DRI acquisition and NOTHING as of yet has replace it, such as a similar program with another lodging group. So, what is being done to makeup for this benefit loss??
Thank you very much for your time and consideration of our issues. We look forward to receiving your response.
Michael and Vicki Venaccio — ￼feeling concerned.”
No Vacancy on Embarc Member Website but Booking.com has Lots of Vacancy.
This begs the question why the members are paying membership fees – see Google snapshot below of listed ads and prices for Embarc Resorts. It belongs to the members and explains why it getting more difficult to book as Embarc sells room inventory to the general public. This snapshot was take November 6, 2017.
Here’s my story. Tried to book the week of April 14 to 19 2019 at Whistler BC, but Embarc on the member booking page did not have availability on Tuesday April 16 2019 (see pic below). However, on Booking.com there are LOTS of Embarc Whistler rooms available (see Booking.com pic below). Isn’t this a violation of the members agreement? Why are they on Booking.com but not available to the members. Calling into the members 800 did not solve the problem. No vacancy on Embarc but Booking.com has lots.
Embarc Whistler booking screen (no availability on April 16th)
Booking.com for Whistler Embarc – lots of rooms for April 16th!
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