Residhotel in Administration

What details have you have? What exactly do you mean by administration? Are you speaking about one residence in paticular or are you referring to the company declaring "redressement judiciare" thanks for any information that you can bring.

I would be interested to know what on what basis you heard this re going into administration - how can it be confirmed ?

J&MQ

I too was concerened that ResidHotel had gone into administration when on the 23rd I received a letter from Xavier Huertas (Administrateur Judiciare) inviting me to a meeting in Nice on 10th March. My poor French language skills and lack of knowledge of the French system led me to interpret "Administrateur" as being the same as Administrator in the UK system.

However, I spoke with Fabien Cordiez and he felt this was more of a mediation meeting to discuss financial matters (which I believe is mentioned on another thread).

My property is in La Divonne and I am trying to find other UK people to co-ordinate with who have received the letter. At this point I'm unclear on whether the meeting on the 10th is for La Divonne, the Divonne-les-Bains area or the wider residences of ResidHotel.

- Dave

This situation really irritates me. When 85 million tourists visit France per annum and these residences are doing very well (earning a really good profit after paying your rent and other expenses) do they suggest giving you a bit extra in rent? No they do not! Do they put money aside in case things aren't always this good to ensure they can pay their landlord? No they do not! They will tell you this is business, they can make as much profit as they like but your rent is fixed until the next INSEE revision. But now when things are going pear-shaped they want us (idiots with mortgages foolish enough to buy these places) to take the pain and accept a breach of the lease which is reduced rent. What happened to "business is business". You can't trurn around to your bank and say please accept a smaller mortgage payment every month. If they can't pay our rents that they are legally obliged to do then they shold be evicted as indicated in the so-called legally binding lease and at least we can use our apartments as holiday homes or rent them out ourselves. We should be given this choice as our notaires keep telling us we are the freehold owners. Let me get this straight .... they break the lease and we end up in either a seriously expensive legal case to get our rent or accept a reduced rent. We break the lease and we end up paying them compensation. What a scam!

Seamus

I accept what you have said in your post. When I spoke about breaking the lease, it was in relation to breaking it after the nine year term is up not in relation to non-payment of rent or commandement de payer. If we do this the management company can claim compensation for loss of business. However if they fail to meet the lease conditions we have no entitlement to compensation for the number of years mortgage payments we may have to pay ourselves until a new management company is installed. This whole scheme is heavily weighted towards management companies. The French government should intervene and protect the rights of property owners. We are the real risk takers (the ones who take out a 25 year mortgage) who prop up the French tourism business. A management company can set up as a SARL and go into liquidation, they are not left with 20+ years of a mortgage hanging around their neck.

We explained already that RH is suffering because of 10 resorts bad located in the middle of nowhere. These resorts are endangering the whole situation of RH and it is wellknown the RH took management of resorts where it was impossible to make any profit.

Just have a look at any website selling holiday weeks in the Pyrénnées: less than 200/300€ per week with a 25% occupancy rate for 110 unit=357 K€ turnover for 1 year. Once deducted labour costs at 50 K€, selling commissions at 20%, fixed costs...you get 200k€. Rents to pay are 5.000€ per 110 unist= loss 350k€!!! If you have 10 resorts like this the situation is not managable!

We have annual accounts of many resorts and management companies.

So I cannot see any other solution than accept a decrease of the rents for the problematic developments but with conditions: a variable part in addition and a yearly audit of the accounts of the resorts.

BLM

This is the first time we have heard of any meeting for 10th March, Le Mas Des Arenes Residence. We received a letter from Valority and an invoice from Societe Art for management fees, which we thought was to be paid by Residhotel during the term of the lease.

We have no intention of accepting reduced rent, we have received nothing yet. If we cannot pay our mortgage the property will have to be sold and it is not worth as much with the lease, so we are prepared to cancel our lease if they break thier contract which they will be doing by reducing the rent. We will not sign a new lease, we are prepared to pay the VAT back.

I own a property at Cap Bleu, and have issued a "commandement de payer" through Fabien Cordiez,I dont agree with "Mccos" comment that we should accept a reduction in rent so to save poor ResidHotel, if anything we should be getting a increase. Why should I be proping up the French Tourism business out of my pocket.

If we are not at the meeting how are we to know what lenght of time is given, I'm afraid I don't understand a lot of this, we have not gone to see a solicitor yet, but it looks like we are going to have no option but to do so.

We may not be asked to receive lower rent, but we have not received any rent at all yet, we were just told we would not receive anything until the end of March. We have been in contact with our Agent that we bought the property from and they have been in negotiations with Residhotel, without success I might add. We have also been in communication with other Residhotel clients in Ireland and they feel very angry like ourselves.

I am also an owner at cap bleu. Have received a letter from Jean-Louis Morel whom as far as I recall was the developer at cap bleu, advising that we should proceed with 'commandent de payer' to a french 'hussier'(lawyer?). I guess others have received the same letter. I'm not sure what action I will take with regard to the contact from J-L Morel.

Paulo

I am issueing a "commandement de payer" through my French solicitor Fabien Cordiez at a cost of E488 and to represent me at the 10 Mar. meeting.The reason to is,If RT is placed in receivership and subsequently liquidated, the advantage of having served beforehand 10th.(i,e before any Judgement placing RH into receivership) will be that your property may revert into a standard property much sooner.I am just keeping my options open, you have to make your next move.

Aidan.

Mccos

I hope you are right, I would not put much hope in RD paying up going on there record.

Aidan.

Has there been any update on Resid since. I have a property in Carcassonne which I only bought last year and am expecting my first rent cheque in April for quarter one 2009.

Cath

Seamus or anyone else, do you know where that leaves the people that have served C de P and that RH have paid prior to administration?(obviously only if this should this happen) I assume this means they haven't broken the lease and therefore will it leave us ultimately in the same position as those that have not gone down the legal route?

What we can see here is that we have the impression that RH set up the deal, sold the properties and manages the units. So that they are responsible of everything regarding the leaseback. Obviously only when there are problems!

Here we have RH who is proposing new leases at 30% reduction to reflect the economic situation of the resort. They have a poor communication I agree.

We help associations to find new management companies and we do rent recovery and at the moment we have all developments from Atrium in ZRR: we contacted all serious management companies and no one want to take a ZRR now. The risk is that you will not find a new management company or even if you can find one they will propose a 50% reduction: Quietude could but they are close to bankruptcy, Odalys is serious but cash flow problems, Atrium will go bankrupt soon, Elite is not paying, maisons de Biarritz over....don't you think it is time to make evolve the scheme?

BLM

Does anybody know who was representing who at this recent meeting in Cannes? It seems judging from previous posts that some people weren't give the opportunity to consider or make a final decision about accepting a lower rent and it would be interesting to know how many owners were present at the meeting or who was voicing who's opinion. It also seems a bit strange that nobody (or nobody that I have heard of) has received a letter following the original one chasing up their proposal or indeed following this meeting? Does anyone know more?

Mike,

I just try to be fair with all parties and to help owners to realize that managment companies cannot be responsible for the whole leaseback scheme problems. We work for associations of owners and once anger and resentment are more or less out of the game, decisions are easier and more sensible for a sustainable benefit of the owners.

We have no link at all with RH.

Bonne soirée

Bertrand

The meetings have not been very successfull indeed and the only way to exit from the problematic developments should consist in opening the safeguard procedure.

We will have more news next week.

BLM

Betrand, can I be so bold as to ask therefore what your involvement is in the RH situation? Do you own a property or represent somebody that does?

You see very informed about the meetings (I thought only one had taken place?!) whereas I said previously, some owners of the so called problematic properties were not even invited to the meeting or given the option to voice their opinion?

What is the safeguard procedure?

Our company is dedicated to accountancy, tax, rent recovery, tax relief...for UK and irish French leaseback owners. We do not own any unit at all. We work for our uk and irish clients and for some associations of owners.

I started working for Ernst&Young and then as financial manager of a international food company including responsability of cash recovery. My job consists in getting info on management companies from shareholders, receivers, and MD of the company. If you wish your clients get paid, never break the relation with the management company, understand the situation, even suggest solutions and then ask for some clients to be paid...it is like fishing you know.

Bertrand from C'est La Vie


mccos39905.4063541667

yes of course. To sum up the safeguard procedure is quite recent and a copy of the US chapter 11. It is used when a company is facing huge problems that could result to a bankruptcy. It means that the company is not bankrupt yet. An receiver will be appointed and a plan to sort out the problems will be proposed. The Administrator or receiver will propose any action in order to restore the profitability of the company (including exit from lease contracts). During this period payments are made under control of the receiver.

This is a very short resumé of course as you can find a lot of information on the web, in English if you search for "safeguard procedure in France".

Bertrand

RH entered into a safeguard procedure the 24th of March which means that the company is protected from any legal action and commandements de payer issued after the 24th Feb are useless as planned.

Now RH can break the leases from the 12 problematic resorts with no penalty. The rents from the 24th will be paid regularly so in April you will receive the rents from the 24th March to 31st March. From this date rents should be paid regularly as the overall cashflow of the company shows .
The rent before the 24th will be paid according to a payment schedule agreed between owners and receiver.

C'est La Vie will meet the receiver next week as we met the receiver for Antibes last week. We had already a conference call with the MD/shareholders today to prepare proposals to pay rents due for our clients.

Owners can join associations of course but be carefull to any company proposing services to help here. We try to get a fair view of the situation in order to inform owners the best possible and to protect their interest on a long term basis.

Bertrand

mccos39905.4061111111

Betrand, thank you for your update however, it is somewhat concerning that there have always been 8 or 9 "problem" properties mentioned and here you mention 12. Are these 12 disclosed anywhere or do we all have to sit and wait for a letter? You seem better informed than everyone else. Best wishes

Bertrand,

I am in a new Resid property in Carcassonne. The property was only completed in December 2008 and only rented for first time from January 2009. As we were only due to receive our first rent in April for the first quarter will we now too not receive the rent. How do we negotiate with the receiver for the balance of the three months.

Do we know the names of the properties that are in trouble.

Do you have an website that I can access

Cath

hi

we own a leaseback in Saboia and are just getting our eyes opened about whats going on!. Is anyone else in Saboia and does anyone know if its one of the affected properties- wee didnt hear of any request for rent reduction but we also havent got any rent since last october!

any info much appreciated

Are you taking actions on the SYNDIC?

If your Syndic (co-ownership or maintenance company) is SOCIETE ART please have a look at the topic of the same name.

Regards,

Ed

Hi, I have received the same letter from Residhotel last week as per the post on the http://residhotel.over-blog.com/ - I take it this letter is for leaseback owners whose apartments are not on the Black list. Have the owners of apartments on the black list recieved a different letter or the same?

Thanks Nick

owner of an apartment at Isola2000

I got a letter from Rhode Tourism dated 30th Mar. I have no idea what it is about, can anyone enlighten me, my french is very poor. I have tried using the google translation site, but it is very unclear.

I just noticed that it is no longer possible to book Residence Athena via Resid'Hotel's website or by phone (the reservation desk said "it is closed and we no longer offer these apartments").

I thought, based upon the letter we received last week, that they will continue offering their resorts/apartments for rent. Also, by closing Athena does this suggest that this is now also a "problem resort" (in contradiction to the knowledge I had sofar)? Even stranger, resorts which were allegedly already problem resorts continue to be offered for rent.

Is there anyone with further information on this?

Thanks,

Emphyteusis (owner of an apartment in residence Athena)

Emphyteus ... I note you have an appt in Residence Athena .. do you currently have a group you are talking to? I would be interested if you can get in touch as there are a few of us that have formed a group. Our appts are not rented in the summer, do you think that perhaps the message was indicating this and not that we had been removed?!

Ranger (otherwise known as K8?) - I'm actually in your group (but obviously under a different name).

I naively believed our apartments are also rented during the summer as the residhotel website has both winter and summer pictures with our residence?

Hi,

Here is the postal address for "mandataire judiciaire":

HI,

Here is the address for the "mandataire" maitre Cardon:

15 impasse de l'horloge; 06110 Le Cannet, France.

TEL: 0033 (0)4 92 18 33 10

You need to declare all your lost; rent, taxes, co-ownership charges + interests.

PS: BE CAREFUL AS SOME SOLICITORS ARE VERY QUICK TO TAKE ACTIONS WHICH ARE NOT GOING ANYWHERE AND YOU END UP WITH BIG FEES.

As anyone done anything regarding the Syndic "Societe ART".

See other topic on this Website.

Regards

Ed

On 24 March 2009 the Cannes Court placed Residhotel into Receivership. Letters are being sent by the Receiver to all leaseback owners confirming the same.

An initial 6 months observation period has been set, during which the Receiver
will (hopefully) receive bids from other management companies. The company's Receiver may
suggest to the Court that the business be taken over by another leaseback
company, or could ask the Court to approve a company voluntary arrangements
know in English legal jargon as 'CVA'. In such a case payment of outstanding
rents could be spread by the Court over several years. The company could also
be liquidated of course.

During the observation period, The Receiver can break the leases of the weaker
residences and not allow owners of the other, more profitable resorts, to break
their leases.

Leaseback owners can attempt to cancel their leases pursuant to Article 37 of
the Insolvency Act 1985. There obvioulsy are tax (VAT) implications here.
Professional legal advice should always be sought before deciding on whether to
try to cancel the lease.

In any event, all leaseback owners whose rent remains unpaid, or who received
payment of their rent but not the bailiff's fees following service of a
'commandement de payer', should file their claim with the Mandataire in order to be admitted by the Cannes
Court as (non-preferential) Creditors in the Receivership.
This is called 'Declaration de creance '. The time-limit
for filing claims is two months from the date the Receivership
Order is published. Such time limit is extended to 4 months for overseas-based
creditors. Filing a 'Declaration de Creance' can be done direct, without having
to instruct a solicitor. Template documents (written in French) will probably
be circulated soon, for DIY use. Filing claims in French insolvency proceedings
is technical and I recommend doing this through a qualified French solicitor. These are called 'Avocats'.

Several owners have demanded Societe Art to disclose their list of co-owners, as required under French law. They also put the company on notice to provide a detailed breakdown of those costs which can be recouped against Residhotel, for inclusion in the above-mentioned 'Declaration de creance'.

Fabien Cordiez http://www.solicitor.fr/leasebacks.html

hi there

i invested in residence virginia - grasse which has been completed since jan 09 and is due to pay its 1st quarterly income at end april 09. Also managed by residhotel. i have been unable to make contact with the relevant person (MARIE MALVEAU) for the last month despite phone calls, faxes and emails.

i have no idea if my leaseback is affected but by the looks of it i imagine i am now in the same situation as others. would be deighted to hear from other investors in this 60 apartment building.

Dear Gabriel,

Our development is in Carcassonne and was completed in December so we were due to get our first quarter payment on April 10th, however, we did receive the same letter that everyone else received although only quite recently!! So it would appear that we are all caught up in this.

I have now just received rent for period March 24th to March 31st and have sent off the declaration de creance to the receiver so will have to wait like everyone else to see what happens

Cath

Dear Cath,

Please remember that 'Declaration de creance' claims are to be sent to Mr Cardon, the Creditors' Representative, not Residhotel's Receiver. Perhaps you actually meant Mr Cardon though.

Best regards,

Hi Gabriel,

I am also an investor in the Residence Virginia Grasse with RH as the management company. We are scheduled to receive our first quarterly rent on May 17th, since RH has started exploiting the property only on Feb 17th.

I have not received the letter from RH explaining that they have gone into a "saguard proceeding", have you?

This should be a cash flow positive property for them because of the location and the fact that it is targetting a business as well as a holiday clientèle.

Regards,

thanks for thar R suave

i have not received any letters from RH but i am worried as no call or emails have been returned. i was led to believe our rent was to commence at end april. u say may??

fingers crossed

gabriel

Dear Fabian,

Yes of course I meant Mr Cardon. Sorry for any confusion.

Cath

Dear all,

Get in touch with the French owners, they will help you.

http://residhotel.over-blog.com/

http://balcons-du-soleil-val-d-allos.over-blog.com/

Good luck

Hi, I have just received the below email from leasebackowners club - they state that 54 resorts have been taken over by Quietude Evasion. I thought that this was only to be 17 resorts?

It was announced this morning that Quietude Evasion, a division of Group Quietude, will be taking over 54 resorts previously run by troubled management company Residhotel.

According to early reports, the resorts that Quietude Evasion are taking over will be in areas of France where the company has had limited or no presence before now – mostly in the Alps and in coastal areas popular with visitors.

Quietude Evasion claims that with its previous resorts, the company as a whole was suffering from seasonal changes in demand and from not having a presence in some of the popular French tourist areas. It is hoped that the addition of the 54 resorts to Quietude Evasion’s existing network will help to combat those factors.

This step takes the number of resorts run by Quietude Evasion up to 90, with a total of 20,000 beds.

Residhotel was put into Receivership in March this year, leaving many owners having to file claims for unpaid rent while contemplating an uncertain future.

Is this a reliable source? There seems to be a lot of different messages going around and I find it amazing that RH can palm off 54 residences to Quietude without the owners knowing about it and more importantly ...how do these individuals know this information before the owners do?