Poipu Point
Owners at The Point at Poipu, a Kauai timeshare, have filed a lengthy class action Complaint against Diamond Resorts International, the CEO of Diamond Resorts, Stephen Cloobeck and several of the Board of Directors. The filing is in response to a special assessment in excess of $5,000 per week of ownership for reconstruction to correct water intrusion damage to the buildings.
Within the 52 page Complaint, the plaintiffs have detailed allegations of intimidation and other methods to gain control of the Board of Directors by installing Diamond Resorts employees on the Board. According to the Complaint, once Diamond Resorts was in control of the Board, the directors increased the management fee paid to Diamond Resorts to more than ten times the prior levels and imposed the special assessment in violation of the Point at Poipu governing documents.
Among the allegations is a claim that Diamond Resorts knew about the water intrusion damage prior to acquiring the resort from Sunterra and that Diamond Resorts delayed taking any action until after they gained control over the Board of Directors. In addition, Diamond Resorts is alleged to have sold “points” in its Collection of Hawaii resorts without disclosing the water intrusion damage and the impending special assessment to potential buyers.
The Complaint further points out that the $65 million total special assessment averages out to be more than $300,000 per unit and goes on to charge that much of the $300,000 will be used for renovations that are not related to the water intrusion problem.
The Plaintiffs allege that not only did the directors commit breaches of their fiduciary duty in assisting CEO Stephen Cloobeck to gain control of the board, they were also voting on issues where they had a clear conflict of interest and were authorizing the water intrusion assessment while knowing it was invalid under the governing documents. Stephen Cloobeck and Diamond Resorts are alleged to have committed consumer fraud and deceptive trade practices in seeking to collect the invalid assessment.
The Plaintiffs are seeking to have the water intrusion assessment declared invalid, all payments already collected to be refunded along with incurred damages.
We will continue to keep you updated on the developments in this Kauai timeshare lawsuit and news on other Hawaii timeshare resorts around the islands.
Advantage Vacation is a member of the American Resort Development Association (ARDA) and offers the best buys on the timeshare re sales market today. We never charge an upfront fee for clients who want to sell a timeshare and only receive a commission, paid from escrow, when the transaction is closed.
We are leaders in the timeshare resale secondary market, have been in the timeshare industry for over 30 years and are Accredited Members of the BBB with an A+ Rating.
Advantage Vacation is using Twitter and Facebook to help educate people on the changes in the timeshare industry along with current timeshare tips, up to date timeshare news and timeshare FAQ’s.
We hope you will follow us and our blog, Timeshare Blogging by Advantage Vacation for the latest news and reviews. If our site does not answer your question or questions, please email us your question and we will answer it and add it to our library. Make your voice heard – what questions do you have?
At Advantage Vacation you can be assured you are working with professionals who believe that honesty and integrity are the most important aspects of the business they are in – timeshare re sales. Our business has been built on relationships and we pride ourselves on providing excellent service to our clients.
Would you like more information about Advantage Vacation?
