Update on Harbor Hill at Provincetown Condominium Trust, Inc., case no. 16-13349-JNF

[Warren Agin]

Owners,

I have received a number of e-mails from owners with many questions about the Harbor Hill at Provincetown Condominium Trust bankruptcy and how it affects them. I am still in the process of obtaining and reviewing records, and still need to discuss the matter with RCI. I won't be able to provide complete answers to many of the questions for a while, but will do my best to provide periodic reports to those who have taken the time to sign-up on this list. I will also try to provide short answers today to some of the more common questions.

1. I heard the case was dismissed? What happened?

The case was not dismissed. In Massachusetts, some kinds of trusts cannot file for bankruptcy. After my office performed some research into the issue, and discussed it with the Trust's counsel, I agreed that Harbor Hill could be a debtor under the bankruptcy code.

2. Why did it have to file?

I am still collecting information about the Trust's finances prior to August 30, but it appears to have run out of sufficient funds to continue to sustain operations, partly as the result of some owners failing to pay dues. I also understand that the IRS was about to levy against the bank accounts, seizing available capital and forcing the property to terminate operations.

3. Can I stay at the resort?

No. The facility is shut down and will likely remain so through the winter.

4. Can I bank my week or use it through RCI?

Right now we have no ability to process requests to bank a week. I plan to talk to RCI and obtain more information about whether they can assist with people who want to bank a week, or stay at another resort through RCI, but right now I do not know.

5. What if I already paid for a week, or am unable to use my week this year because of the closure? Am I a creditor?

I understand that some interval owners will not have access to units for weeks that they have reserved or paid for. The Trust may end up owing you money as a result. Part of what my office will have to do is to balance out these claims to identify which interval owners owe money to the Trust, and which might be owed money. A process exists for filing claims with the bankruptcy court in Boston, and the current deadline for filing claims is January 4, 2017. However, with about 1,350 owners, it is possible that the procedures for addressing interval owners' claims will change. Further notices will be sent regarding claims procedures.

6. What if I want to pay the 2015 assessment or annual maintenance fee?

Payments can be made by check payable to "Warren E. Agin, Trustee" c/o Swiggart & Agin, LLC, 197 Portland Street, Boston, MA 02114. Please make sure you include your name, unit number and interval week(s) so we can track this payments and make sure you receive credit for them. But, please keep in mind that making a payment will not change your access to the property, or our ability to bank weeks from our end.

7. What will happen to Harbor Hill?

As a chapter 7 trustee, my job is to liquidate assets for creditors and other stakeholders. I do not yet have exact numbers on debts, but it appears that the Trust owes about $600,000 in taxes to the IRS and the Town of Provincetown (even though the amount of the Trust's debt was reduced substantially over the past year according to its records). It also has systemic records issues as a result of the developer's actions, which need to be corrected. In order to operate, the Trust would need sufficient funds to pay the debt, to fund the cost of professionals to correct deeds and recording issues, and fix other problems, and provide sufficient operating capital to maintain operations. It is too early to determine what these amounts might be, but the trustees' prior efforts to raise funds through a special assessment was insufficient - partly due to a failure of many interval owners to make the required payment. The good news is that the real estate market in Provincetown is strong, the property is in a good location, and the facility appears to be in relatively good shape due to the efforts of management over the past year. As a chapter 7 trustee, I will consider a number of options for raising the required funds, and plan to consult with auctioneers, RCI, and other trustees who have encountered similar situations. In part, the ability of the resort to survive as a timeshare will depend on the desires of the interval owners, and their willingness to contribute additional funds. At some point in the next few weeks, I expect to seek input from unit owners, perhaps through an online poll, to help me obtain the information needed to make appropriate decisions.

8. Will we have to pay more money? Will we get money from a sale?

Some options would require interval owners to contribute funds, as unfair as that might be. Other options might allow an interval owner to make a choice between contributing, or releasing his or her week back to the trust. Finally, it might be necessary to sell the entire project. Once creditors are paid, I expect that excess funds would be apportioned among interval owners - although an owner might have to be in good standing to participate.

9. What about building three?

I still need to review the declaration of trust for the condominium to see the extent to which building three owners receive separate treatment. In any case, the building shares services with the rest of the facility, which means that even if the owners received access, they would lack access to housekeeping and other services. In addition, they would face the same issues with respect to funding debt payment and operations.

10. Our deed is unrecorded?

I am aware that the records at the registry of deeds are not up to date, and will need to put in place a process to address this issue where it exists.

11. Meeting of creditors?

The Court has a scheduled a meeting of creditors for October 6, 2016. The meeting room is at 155 West Elm Street, Brockton, Massachusetts. Creditors are allowed to attend, watch the proceedings, and ask questions. However, creditors are not required to attend. The proceedings may not be recorded by third parties and I cannot accommodate telephonic participation. Right now the meeting is set for 10:00 am, but I will likely move the meeting to a later time in the day to prevent it from interfering with my other cases that day.

12. I love Provincetown - where will I stay next year?

I understand. I will try to look for solutions that accommodate the desire of current interval owners to continue to visit and stay in Harbor Hill.

-Regards,

Warren E. Agin, Chapter 7 Trustee