Club La Costa Administration Report
The final report from the CLC UK PLC Administrators was recently published. It contains a lot of information and isn’t necessarily easy to read. However, our Club La Costa specialist Solicitor has given a summary for you as follows.
Key Issues for CLC Claims
The key issue is that it is not good news for those who are engaged in claims directly against CLC. However, it has no effect on those individuals, such as our clients, who have brought claims against the bank, who provided finance for the purchases.
The Administrators – now the Liquidators – have received claims totalling £129,000 from preferential creditors in the UK and €1.18m from preferential creditors in Spain. The position of these preferential creditors will be reviewed to ensure both the UK and Spanish creditors are dealt with equally. Basically, a preferential creditor is paid before all other creditors. Those who have made a claim against CLC directly, in either the UK or Spain, ARE NOT preferential creditors.
Are there sufficient funds?
At present there is no certainty as to whether there will be sufficient funds available to make a distribution to the preferential creditors.
The key part, for those who have made claims arising from their timeshare purchases comes next. Those people would be unsecured creditors. The Liquidators have received claims totalling £67,564,454.11 from unsecured creditors, as at the date of the report. That is an enormous amount and is likely to increase before the process is complete.
What is clear is that if there is not enough money to pay €1.2 million to the preferential creditors, there is definitely not enough money to pay £68 million to unsecured creditors. Whatever money a timeshare owner has paid, to a third party, for making such a claim, is likely to have been wasted. They will not recover the cost of the proceedings, let alone recover any compensation.
DO NOT be fooled into believing that something different is happening in Spain. The report makes clear that the Administrators/Liquidators have liaised with the Spanish Liquidator, Senor Robles.
To summarise, the report is clear; there is little prospect of recovering any money if you have made a claim in Spain, relating to your CLC timeshare. If you have paid money up front, to make such a claim, there is little or no prospect that you will get that back.
If you have not made a claim, against CLC, in Spain, we would strongly recommend that you DO NOT do so. You will undoubtedly be asked for money up front, and that money will be wasted.
We have advised our clients, from the beginning, that the correct course of action was to bring a claim, in the UK, against the companies who financed their purchases. Those claims are unaffected by the Liquidation of the various CLC companies.
The Financial Ombudsman Service has already ruled in our favour and, despite a High Court challenge by two of the banks that financed the purchases, we expect that ruling to be upheld this year. This will result in millions of pounds of compensation being paid to our clients, while unfortunately, those who issued a claim in Spain will get nothing.
I have a Timeshare, what should I do now?
Taking legal action against the timeshare company can help to get you the financial compensation you deserve and, in some cases, terminate the contract for breaching the law. Timeshare law is extremely complex and is not something that can be taken on by anybody but requires the professional expertise of a specialist timeshare solicitor.
Finally, remember any genuine timeshare solicitor will be extremely careful to manage a client’s expectations. They will be honest and realistic with what could possibly be achieved in regard to your individual case. If someone claiming to be a lawyer or solicitor has been in contact contacted, be sure to do your research and check if they are regulated by the SRA and if the individual is registered as a solicitor.