Sep 14, 2020 9:15 PM ET
iCrowd Newswire – Sep 14, 2020
September 14, 2020
WESTFIELD, N.J.–Bluegreen Vacations Unlimited Corporation, Inc. (NYSE: BXG), the current operator of NYC timeshare The Manhattan Club (“TMC”) was sued in federal district court in Manhattan on August 30, 2020 by a group of over 100 aggrieved TMC timeshare owners for breach of contract, tortious interference with contract, fraud, breach of fiduciary duty, and most significantly repeated, pervasive acts of fraud at TMC over many years that give rise to liability under the federal civil Racketeer Influenced Corrupt Organization Act (‘RICO”) for continuing acts of illegal behavior in interstate commerce. Also sued were TMC’s disgraced former operator Ian Bruce Eichner, several of his relatives, and entities they used to operate TMC (collectively “the Eichner Defendants”).
The suit against TMC’s former and current operators documents longstanding and persistent wrongdoing in connection with both misrepresentations and deliberate omissions of material facts made during the sale of TMC timeshares, and abusive post-sale operational practices at TMC. These abusive practices include charging owners excessively high annual maintenance fees, and implementing reservation policies that hinder or prevent TMC owners from using their timeshares while allowing the general public to easily make same-day online reservations, which together with other wrongdoing have collectively rendered Plaintiffs’ TMC timeshares unsaleable and therefore financially worthless. Additionally, TMC’s operator has refused to alter its reservation policies or otherwise accommodate difficulties owners are encountering in traveling to NYC as a result of the COVID-19 pandemic.
The complaint filed by the plaintiffs’ attorneys Zimmerman Law Group and Hoffberg & Associates details a plan by the operators of TMC to intentionally divest the timeshare owners of their interests, which were acquired at a cost of over $400 million dollars, using abusive operational practices referenced above. As a result, many owners stop paying the ever-escalating annual maintenance fees – now averaging several thousands of dollars – over which they have no control. The operators then seek to recoup timeshares from such owners, who paid on average several tens of thousands of dollars for their timeshares, for next to nothing by offering to forgive all maintenance fee arrearages and payment of $100 in exchange for the owner deeding their timeshare back to the operator. Many of the operators’ wrongful practices were the subject of a previous investigation by the NY State Attorney General of TMC’s former operator the Eichner Defendants. However, as plaintiff’s lead counsel Jean-Marc Zimmerman pointed out, “this investigation of the Eichner Defendants, and its associated proceeding, were unfortunately prematurely terminated in 2017 by an Assurance of Discontinuance (“AOD”) that provided negligible financial compensation to TMC timeshare owners. Moreover, the AOD failed to stop the wrongdoing that continues unabated, necessitating the filing of this suit.”
The lawsuit seeks redress for various wrongdoing at TMC from the Eichner Defendants and BlueGreen, which acquired operational control of TMC from the Eichner Defendants in 2018 in a private transaction by which BlueGreen assumed joint liability for the prior wrongdoing committed at TMC by the Eichner Defendants, including charging excessively high annual maintenance fees, abusive reservation policies, and the Eichner Defendants’ unfulfilled promises to buy back units from owners for the price paid, potentially creating a nine figure liability undisclosed in filings of Bluegreen, or its 93% parent BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB).
Contact: Please direct all inquiries regarding the suit to Jean-Marc Zimmerman at Zimmerman Law Group by e-mail addressed to [email protected].
Keywords: TMC, The Manhattan Club, BlueGreen, Eichner, Fraud, Racketeer