Grunt

I have seen no discussion of what I consider the most objectionable item in the UE documents. As I understand it, 18 months after a member submits his resignation and the membership remains unsold, the member would receive the redemption amount instead of the resignation amount. The member has no way of knowing when he submits his resignation how long it will take to sell. If it takes more than 18 months, UE pockets alot of cash. Sounds like a lucrative UE exit strategy - do something to get most people to resign, don't try to sell new memberships, and pocket an extra $100 million or so.
Am I the only one who has this concern? Am I mistaken in my interpretation of the documents?

willmyclubmakeit

wouldn't they make more money selling memberships and taking the first 20% into income immediately vs. not selling them. Don't they have to resell any membership on the waiting list on a 3:1 ratio? They are in the business of selling memberships and since there have been few on UE's list ever, I don't worry too much unless the place falls apart or they run out of cash. I don't think they would avoid selling memberships for 18 months with the hope that they could turn back on the spigot 18 months later. All the salespeople would quit as I'm sure they get commission/make most of their money via the sales. How much is the redemption amount vs. sale amount by the way?

Desties

I didn't read the redemption assurance plan that way at all. It's there as a wind down failsafe for members, with enough assets to make sure that members get at least two-thirds of their deposits back under dire scenarios. Then again, I am no lawyer, so take my interpretation for what its worth.

More to the point of UE abusing that, beyond the ethical implications, a member can simply take their name off the resignation list if it ever somehow got to the 16-17 month mark if it would in fact trigger the redemption amount over the resignation amount (then again, there may be bigger fish to fry if that were to ever happen).

Grunt

My comments on exit strategy apply only if UE wants to liquidate the business. Your resignation value is the "Certificate Value" shown on Schedule 1. It should increase over time. The "Redemption Value is also shown on Schedule 1. It decreases over time. The values will differ with each member, but my redemption value is currently $60,000. less than my resignation value.

willmyclubmakeit

that is the security/redemption assurance plan for which the membership amortizes over a 10 year life. I do not think of that as a liquidation amount but decreasing security to back our memberships over time. If I get 10 years use out of the club I will be less worried re: my deposit than if I had one year's use. I believe this also allows supports UE's revenue recogntion of 10% of the dues per year after they account for the 80% return/resale option (so probably 20% upfront and the rest spread over 10 years). IMO, if we have good experiences after 10 years the club should be in a much better financial state and the risk of getting the return on our deposit should be lower and hopefully the price of the deposit has gone up so if we decide to quit we could even make some bucks--but to be honest I am in it for the vacation experiences with the family and hoep to get my deposit back when my needs have changed or when I am less happy with UE than today (I upgraded this year so I am happy enough to put more money into the club).

star1000

I think the club could resolve most of the issues on the lock up and the redemption if they were just honest about what the resigantion list looks like. It is the one area where they will not say anything, even to members on the list. If I knew there were only three members on the list right now, an 18 month lock up might be more reasonable. If there are 30 I don't want to foreclose my option of getting out if things look bad.

Personally I don't see why the lock up. If things are so good with the merger why not let people experieince it without the lock up. In terms of UE assuming liabilities there are easy buisiness ways around it -- escrow, post-close adjustments etc. The lock up only amkes sense if there are more changes coming down the road that people will be upset about and want to leave because of. If all is going to be good where is the risk to the club.

Michele Zujkowski

I am concerned with this aspect as are others I have spoken with.

I have also asked for financials in order to assess how the combined entity stands financially, as a tool in determining whether we should sign up for another 18 month mandatory term. The request was denied.

willmyclubmakeit

how are things working out?