Tenerife timeshare bankruptcy leaves 1,500 tourists penniless

Two timeshare companies based in the south of Tenerife, Silver Point Vacations and Resort Properties, which belonged to the Limora real estate group, have declared bankruptcy with a total debt recognized by the courts of 136 million euros, distributed among 1,503 clients, the most of which are from the UK and Germany.

So far, the court investigating the bankruptcy has found assets worth 83 million, but of which only one million could be made effective, which is why no one affected has been able to collect compensation, according to the lawyers' groups that represent them.

The Canarian Legal Alliance law firm represents 250 creditors and was in charge of filing the appeals before the courts of the two time-share companies. In recent years, more than a thousand court rulings have been issued by the Civil Chamber of the Supreme Court (TS) and other judicial instances that have ruled in their favour.

Claims are still being processed in court. At first, the Court of Santa Cruz de Tenerife agreed with the companies, but from 2017 the jurisprudence changed radically and since then the courts have issued rulings against them.

Once Silver Point Vacations and Resort Properties entered bankruptcy proceedings, these disputes are settled in the Commercial Court, but, in addition, the Tenerife Prosecutor's Office has opened an investigation suspecting that there are signs of fraud.

As the first sentences against the two companies began to be issued, the managers running them began a procedure ‘supposedly’ aimed at decapitalizing them and liquidating the entire group.

Those affected claim they spent amounts ranging between a minimum of 10,000 and 60,000 euros, after being promised that their investment would yield large returns that never materialized.

They were told that they had bought the rights to use timeshare apartments for up to ten weeks a year, depending on the amount they spent, and could rent or sell the ones they didn’t want and use the rest. However, when they tried to book the weeks they ‘owned’ they were informed that those dates were not available and that they couldn’t rent or sell the rest either.

On top of this, the complainants also found that they had to face larger maintenance and community expenses than they were told, and were unable to sell the rights to compensate for the investment. Many of them claim they have gone into debt to deal with the amounts that were being demanded.

The lawyer representing a group of these plaintiffs, Adrián Díaz Saavedra Morales, says that they have had to face a real operation to dismantle these internationally established companies; for example, in tax havens such as Panama, among other parts of the world, and they have even changed their company name.

The investigation is ongoing.