Troubled Glen Ivy Files for Liquidation
Glen Ivy, the condominium time-share group under investigation for allegedly defrauding thousands of customers, filed for bankruptcy court liquidation Wednesday, temporarily thwarting a class-action suit filed by disgruntled investors.
The Chapter 7 filing in U.S. Central District Court in San Bernardino came more than four months after state and local officials raided Glen Ivy offices on suspicion that the company had falsified time-share documents, oversold its properties and used misleading sales tactics.
The petition does not identify specific assets and liabilities for Glen Ivy Holdings Inc., Glen Ivy Financial Group Inc. and Glen Ivy Resorts, the three corporate entities named in the petition.
Nor does the filing include a list of creditors, said David McAdam, a company spokesman.
He said Glen Ivy has 15 days to file a list of assets, liabilities and creditors to the trustee selected Wednesday, Thomas P. Williams.
Once the largest seller of time-share properties in the United States, Corona-based Glen Ivy, which operated 24 resorts worldwide, has been forced to lay off more than half of its 1,400 employees and scale back sales.
“There have been (continual) layoffs for the past five months,” McAdam said.
By Tuesday, managers of the three Glen Ivy companies had fired 12 of their remaining 23 employees. The 11 other employees were given two months of advance pay to continue working through preliminary bankruptcy hearings, McAdam said.
“They were deemed critical to get through the next period,” he said. “The trustee may require their services.”
Three other Glen Ivy subsidiaries--Glen Ivy Equity Mortgage Corp., Glen Ivy Travel Inc. and Glen Ivy Management Co.--were not included in the bankruptcy filing. The 100 employees for those companies are not facing layoffs in the immediate future, McAdam said.
McAdam said company officials decided to file for liquidation after it was unable to obtain new loans to keep operating and because of “creditor pressure due to the financial condition of the company.”
“We needed a time out on the playing field,” McAdam said. “When things start going at warp speed, it can be very conducive to call that time out and let everything get sorted out.”
Attorneys who have filed a class-action suit against all the Glen Ivy companies said the bankruptcy filing was a callous attempt to stave off legitimate financial claims by time-share owners seeking a court-ordered settlement.
“This (filing) is totally inappropriate,” said Michael Sherman of the San Diego law firm of Barrack, Rodos and Bacine, “and is a cheap way for them to dodge their responsibilities.” Sherman filed a class-action suit against Glen Ivy in Los Angeles Superior Court on Feb. 10.
The suit alleges that as many as 60,000 “consumers and investors” may have been defrauded after Glen Ivy allegedly “made numerous false and fraudulent promises . . . regarding these time-share units to convince consumers and investors to buy such units at over-inflated prices.”
Sherman said that, as a result of the bankruptcy filing, he would attempt to recoup losses for his clients by going “full speed ahead” against other defendants named in the civil suit.
