Zimmerman Law Group Update on The Manhattan Club – Complications Continue

Complications surrounding The Manhattan Club continue as the Court requests that counsel for both parties work to resolve issues over access to the owners list.

An update from Zimmerman Law Group

A hearing was held in a suit we filed, Tucker v. TMC, on December 12, 2018. Because of a procedural issue, the Court was unable to order that TMC’s member list be provided to plaintiff.  This determination was not on the merits, and we, on behalf of Mr. Tucker and other clients, continue to seek access to a reliable platform for communication with the members. Significantly, since Mr. Tucker’s goal of organizing members potentially adverse to TMC’s board/management has been recognized by New York Courts as a proper purpose for seeking the list, plaintiff is ultimately likely to prevail on the merits of his claim against TMC.

The Court requested that counsel for both parties work together to try and resolve the issue so that plaintiff can send his message to all other TMC members without further court action. Counsel for both parties are presently exploring how to do so. This may entail allowing TMC to disseminate Mr. Tucker’s message though its service provider, advising all other members about the Assurance of Discontinuance and advocating for changes and reforms at TMC, so long as doing so is not cost-prohibitive and does not edit or censor Mr. Tucker’s message.

Also, since TMC would likely have appealed a court decision granting Mr. Tucker the member list, cooperation with TMC will likely result in plaintiff’s message being disseminated to the other TMC members sooner and at less cost than would be the case if an appeal had to first be decided before he could access the list.

There is no quick resolution of the underlying issues at TMC, including excessive maintenance fees, difficulty in reserving units, and the illiquidity of memberships. Relief will ultimately be attained if a court determines that the existing management and control structure is, as we contend, oppressive and deserving of judicial intervention.

Relief may be attained if members organize in sufficient number to claim control of TMC’s board and management. Mr. Tucker is seeking to organize a larger number of members, for example, at least 5% or 10% of the reported 18,000 TMC members, to work together to enact or demand meaningful structural changes and reforms at TMC, and to help remediate the issues that render members’ timeshare interests “worthlessâ€, by either increasing the value of continued ownership or increasing liquidity of the interest. Our contention that existing TMC memberships are “worthless†is based in part on the following facts: (a) TMC is offering to reacquire memberships in arrears for $100 cash; (b) the cost of staying at TMC may be lower for non-members through Hotels.com than a member’s yearly maintenance fees; (c) members are unable to sell or transfer their interests to third parties; and (d) the demand for memberships on the secondary market is non-existent.

We encourage TMC members who have not yet joined Mr. Tucker’s efforts to effectuate the desired changes at TMC, to do so, and assist us in regaining the value of the TMC membership interests.

Finally, in papers filed in the Tucker case, TMC asserts that the Eichners and their related entities are no longer TMC’s Sponsor and have been “replaced†by BlueGreen. We are presently investigating to determine the accuracy of this assertion, and if it is accurate, how such change was made and how it affects existing TMC members. At present, we are not aware of any public information which documents whether BlueGreen has legally assumed the liabilities and responsibilities of the former Sponsor.

Contact: Jean-Marc Zimmerman, Zimmerman Law Group, 233 Watchung Fork, Westfield, NJ 07090, E: [email protected]

By Darren Wheeling December 19, 2018 24 Comments