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Timeshare condominium owners might fare better with the Lighthouse Inn going through bankruptcy instead of a foreclosure auction, but those who bought into the New London resort are not hopeful about getting back their money.
Two local bankruptcy attorneys, including David Falvey of Groton and another who didn't want to be named, said the involuntary Chapter 11 bankruptcy filing that stopped an auction of the Lighthouse Inn earlier this month might allow the resort's owners to pay off creditors and operate as a continuing business. If so, the attorneys said, timeshare owners might retain their rights to the weeks they were promised.
"Timeshare owners are better off if it continues," said the New London attorney who didn't want to be named because he has been consulted by a Lighthouse Inn principal. "It's pretty much in everyone's best interest. It's making the best of a bad situation."
Complicating the situation, however, is the fact that the two Lighthouse Inn creditors seeking its bankruptcy - Maureen Clark and Christopher Plummer, principals in the petitioning Lighthouse Group of Connecticut LLC - have left a slew of unpaid bills across southeastern Connecticut, according to foreclosure filings. And each has been arrested in recent months: Plummer on charges of not paying employees, and Clark on 39 counts of tax evasion.
Some attorneys said they believe the bankruptcy filing most likely means Clark and Plummer are seeking to line up another owner on their own, perhaps with the idea of retaining an ownership or management interest in the property. Both Clark as an individual and she and Plummer together in their limited-liability company have mortgages on the property.
Adding to the complicated legal situation is the fact that the Lighthouse Inn never filed deeds on behalf of timeshare owners. According to a records search at New London City Hall, only one timeshare owner, Barbara K. Levine of Boynton Beach, Fla., has a deed on file, which her attorney submitted last year only after her son, a Waterford resident, read an article in The Day indicating the resort's timeshare deeds had never been officially filed by Lighthouse Inn management.
"Not that it's going to do anything for us," Andy Levine said. "It's probably going to go away unless the new owner wants to be a good guy."
"We're the bottom of the food chain," said Sal Cardello of Gales Ferry, who along with his wife said he paid Lighthouse Inn Resort $13,000 for a one-week timeshare a few years ago. "If she sells it, we're still going to be out of luck."
Cardello said he doesn't believe new owners of the inn would have any obligation to honor the original 50-year timeshare agreement. He blames former inn operator Maureen Clark, whom he said sold him the condo and never filed any paperwork indicating his ownership of the timeshare.
"All we can do is possibly sue her," Cardello said.
A declaration of covenants and restrictions on file at City Hall indicates 48 units at the inn's mansion and carriage house were available for timeshares during 51 weeks a year, with the total timeshares adding up to 2,448 weeks. There is no indication how many weeks were sold.
The century-old Lighthouse Inn mansion became affiliated with RCI, a timeshare-exchange company that boasts more than 3 million members, in 2003. It earned billing as a Gold Crown Resort, RCI's highest designation, based on the quality and range of its offerings, which included an outdoor pool, nearby beach and banquet and restaurant facilities, though plans for a tennis court included in the declarations never came through.
Timeshare owners said they gradually became disenchanted with poor maintenance at the resort.
"We've gone by it over the summer, and it's just fallen apart," added Linda Cook of Uncasville, who bought a one-week timeshare with her husband, Joe.
The Cooks don't plan any legal action to recoup their Lighthouse Inn investment.
"We don't really want to spend any more money on it," Cook said. "We've just resigned ourselves to the fact we're out of money."