Suit: Hyatt Grand Aspen timeshares dropped in value
More than 560 owners of fractional units at the Hyatt Grand Aspen have seen their timeshares drop in value because of underhanded dealing by Hyatt Hotels, Interval Leisure Group and Marriott Vacations Worldwide, among other entities.
That’s part of the accusations made in a complaint filed by G.A. Resort Condominium Association, which has levied 13 claims against the defendants in a 72-page lawsuit filed earlier this month in Pitkin County District Court.
The defendants have yet to see the lawsuit, filed May 3, as it had not been served as of Monday. Service is likely to happen this week, said Aspen attorney Matt Ferguson and Michael Reiser of Walnut California, who along with The Meade Firm PC of San Francisco are representing G.A. Resort Condominium Association in the litigation.
The suit is similar in nature to the one Ferguson, Reiser, The Meade Firm and other attorneys carried out on behalf of more than 200 owners of 1/12 timeshares at the Ritz-Carlton Club located at the base of the Aspen Highlands ski area.
That suit, which was originally filed in Pitkin County District Court in January 2016, alleges Marriott Vacations Worldwide, a public timeshare company, and other defendants covertly conspired to affiliate the Highlands Ritz with Marriott Vacation Club without allowing a say from the timeshare owners.
The affiliation diluted the value of the Ritz-Carlton timeshares, some by as much as 80 percent, because they lost their exclusivity due to the Marriott affiliation, says the suit, which was moved to Denver federal court and is pending. The defendants have denied the allegations.
Marriott Vacations Worldwide, based in Orlando, Florida, has brands that include the Ritz-Carlton, and it acquired access to the Hyatt brand when it bought Interval Leisure Group, also a timeshare company, in November.
“The bottom line is that the values of ski-in and ski-out at Highlands, and almost ski-in and ski-out at one of the finest real estate properties in town (Hyatt Grand Aspen) have been crushed by these hotel companies,” Ferguson said.
The suit by Grand Aspen Hyatt, which debuted in 2005, claims that when owners bought into the hotel, their 1/20th fractional interests came with a deed and rights to two-and-a-half weeks a year at the Aspen hotel, as well as the rights to use their Aspen timeshares at other Hyatt Residence Club resorts. The owners also could book another week and a half of float time at the Aspen hotel.
The exclusivity that came with ownership at the luxury resort, however, lost its luster when defendant Interval Leisure Group, which acquired 207 fractional intervals at the Grand Aspen Hyatt in 2014 for $190 million, transferred the inventory to a trust to create the Portfolio Club in 2017.
“On information and belief, in the months leading up to this acquisition, ILG persuaded Hyatt not to sell this unsold inventory because ILG wanted unsold fractional inventory that it could transfer to a land trust and use to sell points,” the suit says.
Fractional units that were part of the Portfolio Club, in turn, were marketed as part of a point-based program that “has enabled cheaper access to the Hyatt Grand Aspen and has undermined the exclusivity of interval ownership for access which Aspen owners had been promised and had paid for,” Ferguson said.
The points-based program was created without the consent of the other owners of the Grand Aspen Hyatt, the suit alleges. The points-based program also allows users to spend one or two nights at the Hyatt, though the fractionals must be used in half- and full-week blocks, the suit says.
Reiser said, “We think these guys created a new club and they’re trying to raid the assets (of the Hyatt in Aspen) to jump start these different clubs, and they’re doing it at the expense of the owners.”
The units in question represent about 20 percent of all of the Aspen Hyatt’s inventory, according to the suit.
The lawsuit seeks to terminate the affiliation between the Portfolio Club and the Hyatt Grand Aspen and the breaking up of other agreements that led to the complaint. Among the causes for action are fraud, breach of fiduciary duty, conspiracy to violate the Colorado Organized Crime Control Act, unjust enrichment and other claims.
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