Jim Lewis Fired from WDWCo

[Breyean]

I certainly hope that Langley, the Disney spokesperson, misstated the situation when she said those who already bought Aulani "will not see a dues increase over the life of the 50-year contract that expires in 2062." As operating expenses increase over the years, why would the early Aulani buyers be exempt from paying for normal cost of living expenses? If normal cost of living expenses increase 3% in a year, then all Aulani owners should absorb the cost.

I fully understand that the early Aulani owners should be protected because they bought thinking Aulani's starting MF would be $4.31. But even those buyers knew, or should have known, that the MF would increase year by year. Its simply ludicrous for Langley to imply that the early Aulani buyers will still be paying $4.31 per point in 2062.

Another item that should be remembered is that Hawaii's Transient Accommodations Tax is based, in part, on the yearly maintenance fees. The State of Hawaii uses one-half of a timeshare's annual maintenance fee in computing the tax. But the law allows the State to use a different amount if it knows that the annual maintenance fee is not representative of a timeshare's true operating expenses. The Honolulu Star Advertiser article states that Hawaii would let Disney charge the lower MF amount to some owners. However, I wonder if Hawaii will use the higher, more accurate MF amount in computing the TAT on Aulani stays. Which then begs the question, Will Disney subsidize the TAT for the early Aulani owners who are grandfathered in with the $4.31 rate?

I agree. It has to be a mistake on her part. I'm one of the founding Aulani owners, so I would benefit from this, but it's not the right thing to do.

Just keep me at my original base and apply the normal annual dues increases on a percentage basis on that starting point. That seems fair.

She has to be wrong about the no increase thing. I bet she meant no IMMEDIATE increase to the new dues to be announced for new people buying in now, and no catch up increases in the future just on us to equalize things eventually.

 

[TisBit]

http://www.kitv.com/news/28888158/detail.html

The Disney spokeswoman said anyone who already purchased time share units at Aulani for the lower rate will not see a dues increase over the life of the 50-year contract that expires in 2062.

"It's the right thing to do," said Langley.

Sure sounds like they plan on subsidizing over the life of the contract.

It may also avoid lawsuits from those owners. It sounds as if this will be a subsidy without the maximum increases, unlike Vero, where the resort was never fully built out.

I certainly hope that Langley, the Disney spokesperson, misstated the situation when she said those who already bought Aulani "will not see a dues increase over the life of the 50-year contract that expires in 2062." As operating expenses increase over the years, why would the early Aulani buyers be exempt from paying for normal cost of living expenses? If normal cost of living expenses increase 3% in a year, then all Aulani owners should absorb the cost.

I fully understand that the early Aulani owners should be protected because they bought thinking Aulani's starting MF would be $4.31. But even those buyers knew, or should have known, that the MF would increase year by year. Its simply ludicrous for Langley to imply that the early Aulani buyers will still be paying $4.31 per point in 2062.

Another item that should be remembered is that Hawaii's Transient Accommodations Tax is based, in part, on the yearly maintenance fees. The State of Hawaii uses one-half of a timeshare's annual maintenance fee in computing the tax. But the law allows the State to use a different amount if it knows that the annual maintenance fee is not representative of a timeshare's true operating expenses. The Honolulu Star Advertiser article states that Hawaii would let Disney charge the lower MF amount to some owners. However, I wonder if Hawaii will use the higher, more accurate MF amount in computing the TAT on Aulani stays. Which then begs the question, Will Disney subsidize the TAT for the early Aulani owners who are grandfathered in with the $4.31 rate?

We all know you cannot believe everything you see. I don't see how DVC or WDW could freeze MF's for 50 years on these members (unless there are considerably less owners than we know about). It doesn't make sense on any level and is most likely a bad sound bite. Maybe, possibly they will have a slightly less MF than other purchasers, but even that is yet to be seen. Lets say that the Mf's were miscalcuated at $1 per point, those owners would recieve that subsidy through the life of the contract at $160...but I don't see how they could be exempt from the normal increases due to normal wear and tear, rising costs of insurance salaries, etc.

I know that the Sentinel had a similar statement in their orgiinal article, which suddenly was revised with it being reworded. So it is quite possible that there was a clarification that this reporter has not updated with as well.

 

[gkrykewy]

For all intense purposes

intents and purposes.

I'm sorry, but I figured that if this is a turn of phrase you use often, you'd want to know

 

[tjkraz]

FYI, I contacted Rena Langley and she clarified that they intend to calculate a subsidy based upon the 2011 variance (original vs new dues.) That subsidy amount will apply to all early buyers through the end of the term.

She said that many news outlets have misrepresented her comments. Dues are not permanently frozen at the $4.3071 level as KITV stated. If the disparity between $4.3071 and the revised dues amount ends up being $1.00 per point, those early buyers will get a $1.00 per point credit from now until 2062.

 

[Mickey'sApprentice]

FYI, I contacted Rena Langley and she clarified that they intend to calculate a subsidy based upon the 2011 variance (original vs new dues.) That subsidy amount will apply to all early buyers through the end of the term.

She said that many news outlets have misrepresented her comments. Dues are not permanently frozen at the $4.3071 level as KITV stated. If the disparity between $4.3071 and the revised dues amount ends up being $1.00 per point, those early buyers will get a $1.00 per point credit from now until 2062.

Will it be a $ amount less or a percentage amount less?

From a financial point of view, making it a $ amount less will be unfair to current Aulani owners.

Let's say dues go up 5X in 50 years. (For simplicity sake...let's say that the dues difference is 69 cents or $4.31 and $5.00.

If dues go up 5X - then by percentage the dues would be $21.55 and $25.00 respectively. If they made it the same $ amount per year, it would be $24.31 and $25.00. That is not a huge difference...unless you have hundreds of points, or the difference is more than 69 cents...and it probably is more than that.

 

[bwvBound]

FYI, I contacted Rena Langley and she clarified that they intend to calculate a subsidy based upon the 2011 variance (original vs new dues.) That subsidy amount will apply to all early buyers through the end of the term.

Thanks for making that contact. The response makes sense.

 

[newyorkmike]

Someone inquired about potential stock sales by the terminated insiders at Disney. The "Disney" that is the registrant with the Securities and Exchange Commission (SEC) is Walt Disney Co. "Officers" of Walt Disney Co. are required to file a Form 4 with the SEC within two business days of any transaction in the company's stock disclosing the details of the transaction. These filings by Disney officers are publicly available on the SEC's EDGAR database at: http://www.sec.gov/cgi-bin/browse-e...K=0001001039&type=&dateb=&owner=only&count=40

An officer is defined under SEC Rules to mean the company's president, principal financial officer, principal accounting officer, principal executive officer, any vice-president of the issuer in charge of a principal business unit, division or function, and any other officer who performs a policy-making function.

His President title notwithstanding, Jim Lewis was not deemed to be an "officer" of Walt Disney Co. and therefore was not subject to Form 4 reporting obligations. Jim likely had a direct report to someone higher up in the Walt Disney Co. who was an officer subject to Form 4 reporting, thereby making Jim not an "officer" for purposes of SEC disclosure rules. So if Jim Lewis unloaded any stock in recent weeks, it would not have been subject to SEC reporting.

However, such sales would have been subject to insider trading liability, i.e., any sales while in possession of material nonpublic information would be a felony.

With respect to documentation problems in real estate offering documents, in my experience (which is not in Hawaii) there are typically three tiers of regulatory scrutiny:

(i) immaterial errors or ommissions - can be fixed by "stickering the prospectus" i.e., sending a few page summary explaining what is different to people who have already purchased in the offering.

(ii) material errors or ommissions that are unintentional- must sticker the prospectus and make the investors whole. Making the investor whole is accomplished in one of two ways. In a straight stock offering, the regulators will almost always insist you offer rescission to all investors, i.e., each investor must be given the right to rescind his purchase and get his money back. In real estate or bond offerings, making the investor whole means giving them the original deal. This would take the form of the points subsidy some posters have discussed, but could also be accomplished in the form of a lump sum refund.

(iii) intentional material errors or ommissions - This is fraud. The regulators could cancel all contracts, impose significant penalties, and potential criminal liability may exist.

Every state is different, and I have no idea what the law in Hawaii may be with respect to these issues, and whether or not any of these scenarios is applicable to the suspension of Aulani sales is purely speculative. You should not construe any of the foregoing information as legal advice and it is not intended as such. It is provided for information purposes only in the context of the speculative discussion of the Aulani sales suspension and potential outcomes that are being discussed as the possible "for cause" basis of the termination of Jim Lewis.

 

[pilferk]

FYI, I contacted Rena Langley and she clarified that they intend to calculate a subsidy based upon the 2011 variance (original vs new dues.) That subsidy amount will apply to all early buyers through the end of the term.

She said that many news outlets have misrepresented her comments. Dues are not permanently frozen at the $4.3071 level as KITV stated. If the disparity between $4.3071 and the revised dues amount ends up being $1.00 per point, those early buyers will get a $1.00 per point credit from now until 2062.

Good to hear the clarification.

Basically, they're going to go the VB route.

 

[TisBit]

Will it be a $ amount less or a percentage amount less?

From a financial point of view, making it a $ amount less will be unfair to current Aulani owners.

Let's say dues go up 5X in 50 years. (For simplicity sake...let's say that the dues difference is 69 cents or $4.31 and $5.00.

If dues go up 5X - then by percentage the dues would be $21.55 and $25.00 respectively. If they made it the same $ amount per year, it would be $24.31 and $25.00. That is not a huge difference...unless you have hundreds of points, or the difference is more than 69 cents...and it probably is more than that.

It actually wouldn't make it unfair. One is more financially rewarding than the other, but it doesn't mean that it is "fair". The difference in per point cost which was calculated before and what the new price will be is a set dollar amount. If they would have been charged $1 more per point, it would have increased every year based on actually increased dollar amounts vs percentage.

Just because one could potentially save the member more money, doesn't mean that it is "fair" or "unfair".

 

[Sammie]

I think your first comment is important. From my experience and in watching some of the financial debacles in the world in the past 10 years or so, people don't normally get fired for a mistake. Where they get into trouble is when they start trying to cover up that mistake.

Exactly there is usually two scenarios.

The mistake was intentional.

The mistake was not intentional but the cover up was.

Al Weiss early retirement was one of those situations where he was much respected for years of service but there was a reason he needed to go, so they asked him to take early retirement and worked a deal. And he left without any fanfare which tells alot and that no one saw this coming.

Jim Lewis and the other two were not asked to resign, were not offered a package and were fired. When that is done late on a Friday afternoon, that usually means some one higher up the chain goes with security to the office, asks them to clean out their office and is escorted off the property.

On Friday early afternoon Jim's Disney bio and email were shut down.

 

[L.C.Clench]

Just posted my topic for this in the operations forum, but didnt get a response yet. Thought I'd post here and see what happens..

I am looking for some clarification on some of the titles that have been thrown around recently with the firings and hirings at DVC. I have seen a few different titles of Senior Vice President, Executive Vice President and President. Could someone (maybe someone who works for the company) list the people layed off, their titles and their replacements as well as who will report to who? If you want to include Al Weiss’ retirement and Meg Crofton’s promotion as well that would be great.

Thanks!

 

[tjkraz]

AFAIK, the reporting chain for DVC goes like this:

Bob Iger
Tom Staggs
Karl Holz (Meg Crofton is at roughly the same level, with different duties, also reporting to Staggs)
Claire Bilby

Google for titles.

Al Weiss used to be roughly between Staggs and Crofton / Holz. His position was essentially eliminated with duties being reshuffled.

If you're looking for information on folks in finance, legal, or other similar positions, or anyone who will report to Bilby, best of luck to 'ya.

 

[manning]

I have some hope. Usually with a shake-up like this, the new guy (figurative term in the case of Ms. Bilby) wants to come in and put their stamp on things. Aside from her and Mr. Holz fixing this dues thing, the quickest way for her to put a positive spin on this thing with existing members is to do some quick-fix things at the resorts like cleanliness, better front-line cast members, timely check-ins, etc. It may take a while to achieve all the pie in the sky things our collective Disboards DVC fandom has thrown out there for her to consider, but the aforementioned items are easily achievable and should be right up there with fixing this dues issue.

Honestly, there's some damage control that needs to be done and aside from rectifying the dues issue, I think she needs to work expeditiously to earn some goodwill and grace from the members.

Also, Jim Lewis et al may have been fired over this dues flap, but my experience in situations like this tells me Mr. Holz and other Disney execs at his level will want everything that was under Mr. Lewis to be reviewed to make sure there are no other skeletons in the closet. They may see a pattern of practices that aren't Disney quality that the new regime will want to get right with members.

There are some that seem to think we are getting a better DVC leader in Ms. Bilby than JL ever was. Hopefully that translates into some of the things we've been clamoring for as DVCers recently...

Usually the first move is even a more thorough audit, and the first one is tough to begin with.

 

[manning]

Wow.

I just heard a rumor that Jim Lewis was fired.

Any truth to that?

Nah, came from a reporter at the Orlander Sentinel who use to be a bus driver at Disney

 

[lockedoutlogic]

Usually the first move is even a more thorough audit, and the first one is tough to begin with.

Exactly...and that is always where the trouble starts in entertainment...cost accounting sucks the juices dry...

Some of the 'simple' suggestions are near impossible...'cleaner rooms' 'better service' and 'better frontline employees' all translate to the same thing: better trained, educated, paid and compensated employees.

Over Iger's dead body...no way at all this will happen. They will ride the whole horse into bankruptcy before that will ever happen. They've spent 25 Years cutting and lowering standards...they will not reverse.


But maybe I'm a skeptic...but does anybody else have any faith that this new DVC head is anything more than a 2 bit salesman?

I mean...the resume screams salesman, does it not?


That's gonna mean more cutting and accounting and more sleazy peddling...

 

[TisBit]

Exactly there is usually two scenarios.

The mistake was intentional.

The mistake was not intentional but the cover up was.

Al Weiss early retirement was one of those situations where he was much respected for years of service but there was a reason he needed to go, so they asked him to take early retirement and worked a deal. And he left without any fanfare which tells alot and that no one saw this coming.

Jim Lewis and the other two were not asked to resign, were not offered a package and were fired. When that is done late on a Friday afternoon, that usually means some one higher up the chain goes with security to the office, asks them to clean out their office and is escorted off the property.

On Friday early afternoon Jim's Disney bio and email were shut down.

I am not exactly sure the timing of this, but Al Weiss retirement might have been the kick off of the investigaiton. If he had seen this issue and tried to warn his bosses that there was a problem, but not one would listen, it may have prompted him to retire before the house of cards came crashing down. In doing so, probably expressed his concerns and displeasures...prompting the higher action.

But Al Weiss seemed to have retired just shortly before the sales were suspended.....

 

[JimC]

Did Disney comment on the transferability of the dues credit? If an early purchaser sells does the new owner get the credit?

 

[tjkraz]

But maybe I'm a skeptic...but does anybody else have any faith that this new DVC head is anything more than a 2 bit salesman?

I mean...the resume screams salesman, does it not?

Don't think they had any choice. The position is--first and foremost--a sales position. I couldn't see them hiring someone with a background in customer service or resort management and saying "gee it would be really nice if you could sell a few points along the way, too."

She can certainly surround herself with capable people who have a customer service / hotel management background.

In retrospect, one of the biggest issues with Lewis in recent years was that he seemed to go out of his way to thumb his nose at members. Small gestures can often have a big impact. I remember in our early years of ownership (2004/05) mailings would often include things like postcards of the resorts or magnets. If DVC is spending tens-of-thousands of dollars to mail each member a flashy member handbook or some new promotional deal, how hard is it to include something which is actually practical / meaningful / useful?

Cleanliness and maintenance will always be challenges. 100% satisfaction is unobtainable. There is definitely room for improvement, but I also think that members' attitude / outlook would improve with a little token hand-holding.

I bet there would be a noticeable change in member disposition if we were able to spend a little more time talking about some free trinket received in the mail rather than commiserating over the latest horrible trip report.

(Of course, thinking back to the 15 anniversary giclee, there was more talk about how it was paid for rather than appreciation so maybe that wouldn't work either. )

 

[Mickey'sApprentice]

Don't think they had any choice. The position is--first and foremost--a sales position. I couldn't see them hiring someone with a background in customer service or resort management and saying "gee it would be really nice if you could sell a few points along the way, too."

She can certainly surround herself with capable people who have a customer service / hotel management background.

In retrospect, one of the biggest issues with Lewis in recent years was that he seemed to go out of his way to thumb his nose at members. Small gestures can often have a big impact. I remember in our early years of ownership (2004/05) mailings would often include things like postcards of the resorts or magnets. If DVC is spending tens-of-thousands of dollars to mail each member a flashy member handbook or some new promotional deal, how hard is it to include something which is actually practical / meaningful / useful?

Cleanliness and maintenance will always be challenges. 100% satisfaction is unobtainable. There is definitely room for improvement, but I also think that members' attitude / outlook would improve with a little token hand-holding.

I bet there would be a noticeable change in member disposition if we were able to spend a little more time talking about some free trinket received in the mail rather than commiserating over the latest horrible trip report.

(Of course, thinking back to the 15 anniversary giclee, there was more talk about how it was paid for rather than appreciation so maybe that wouldn't work either. )

I have a friend in marketing who says that the majority of why doctors get sued is because of rude people working for them in the office. It seems weird, but my friend swears by it.

 

[TisBit]

Did Disney comment on the transferability of the dues credit? If an early purchaser sells does the new owner get the credit?

They have not commented, but I can say the answer will be no. The dues at VB are only prorated for orginial purchasers due to the changes in the resort plan. If someone sells Aulani, the new owner will be fully aware of what the current dues are and will not receive a credti because they were not originally affected.