Fairfield Williamsburg: Timeshare Association Seeks 363(h) Sale in Subchapter V Case

Fairfield Williamsburg Property Owners Association, Inc., the nonprofit entity managing a 42-acre timeshare resort in Williamsburg, filed for chapter 11 bankruptcy on December 5, 2025, seeking to sell the entire property using a mechanism that allows disposition of thousands of co-owner interests in a single transaction. The Association oversees 10,192 timeshare estates spread across 196 units in 41 buildings at the property known as Fairfield Williamsburg – Patriot Place, now branded as Club Wyndham Patriots' Place under a management agreement with Wyndham Vacation Management. The Association reported $16.8 million in cash and estimated $34 million in needed repairs, capital improvements, and renovations over the next five years. At an October 2025 special meeting, 99.42% of voting interests present approved the bankruptcy filing.

The case follows pressures facing legacy timeshare resorts built decades ago, where infrastructure costs can exceed funding from owner assessments and associations consider dissolution or sale. For Fairfield Williamsburg, member occupancy has been suspended effective December 27, 2025, as the Association pursues a complete sale of the property through Section 363(h) of the Bankruptcy Code—a provision that permits sale of both the debtor's interest and co-owners' interests when partition is impracticable.

Resort Origins and Wyndham Connection

The Fairfield Williamsburg resort traces its roots to Fairfield Resorts, which had been operating since 1966 as one of the nation's first timeshare operators. The Association itself was incorporated as a Virginia nonstock corporation on April 2, 1985, charged with managing the property and collecting assessments from timeshare estate owners. The resort would undergo multiple ownership transitions through decades of industry consolidation.

Industry Consolidation and the Wyndham Era.

The resort's trajectory mirrors the broader consolidation of the American timeshare industry. In 2001, Cendant Corporation acquired Fairfield Resorts for a reported $690 million as part of a rollup strategy that also absorbed Trendwest Resorts and Equivest Finance to create the Cendant Timeshare Resort Group. When Cendant spun off its lodging and timeshare businesses in 2006 to form Wyndham Worldwide, Fairfield Resorts was rebranded as Wyndham Vacation Resorts.

The corporate reshuffling continued when Wyndham Hotels & Resorts spun off on May 31, 2018, leaving the vacation ownership business as the renamed Wyndham Destinations. In 2021, that company acquired the Travel + Leisure brand and became Travel + Leisure Co., now the largest vacation ownership company in the world with more than 270 properties, 25,000 individual units, and over 800,000 property owners. Through all these transactions, the Fairfield Williamsburg property retained its association structure while operating under the Club Wyndham brand.

Property Configuration and Amenities.

The resort sits on 42 acres in Colonial Williamsburg, approximately 45 miles from Norfolk, Virginia. Built on the grounds of a former golf course, the property features two-story condominium residences with an entrance pond.

Resort amenities include a heated outdoor pool, fitness room with spa tub and sauna, children's programs, outdoor tennis courts, sand volleyball court, basketball and tetherball facilities, jogging track, gift shop, and food court. Many amenities date to the property's development in the 1980s. The Association's reserve study estimates $34 million in repairs, capital improvements, and renovations over five years.

Complex Ownership Structure.

The 10,192 timeshare estates at Fairfield Williamsburg are distributed among institutional and individual owners in a configuration that shapes voting control:

PTVO Owners Association's majority position creates a majority voting block. Combined with Wyndham entities holding approximately 13.67% of estates, institutional owners control nearly two-thirds of all timeshare interests. Individual owners hold 32.40% of voting power and face potential extinguishment of their interests upon any sale.

Wyndham Management Agreement.

Wyndham Vacation Management, Inc., an affiliate of Wyndham Vacation Resorts, serves as Property Manager under a management agreement dated November 3, 1998. The agreement provides for a 10% management fee calculated on operating revenue, resulting in $1,050,397.32 paid to Wyndham in 2024 alone. Monthly management fees in 2025 run approximately $92,660.

Path to Bankruptcy: A Deferred Maintenance Crisis

Declining Occupancy.

The resort has experienced declining usage patterns that affect the Association's ability to collect assessments and fund operations. Occupancy rates show declining demand:

A projected occupancy rate below 50% means more timeshare estates sit unused than occupied in any given period for a property dependent on owner engagement to sustain assessment collections.

Capital Requirements.

A Reserve Study conducted for the Association identified infrastructure needs that exceed available cash:

These figures represent more than four times the Association's current cash position. Spreading $34 million in repairs across 10,192 timeshare estates would require roughly $3,335 per estate over five years—on top of regular annual maintenance fees that already average $1,260 industry-wide.

The infrastructure challenges facing Fairfield Williamsburg are not unique. Resorts built in the 1980s often require upgrades to electrical systems, plumbing, and HVAC units, with costs passed through to owners via rising maintenance fees and special assessments. One Sedona resort issued a $1,500 special assessment per interval only two years after a previous $975 assessment.

Assessment Delinquency and Collection Crisis.

As of October 31, 2025, 365 individual timeshare estate owners were delinquent on assessment payments, totaling $978,728.95 past due. Under the Virginia Real Estate Time-Share Act, the Association has a statutory lien on every timeshare estate for unpaid assessments.

Industry-Wide Timeshare Pressures.

The Association's situation aligns with broader data on the timeshare industry:

The industry has been shuttering older resorts, causing overall resort and unit counts to decrease by approximately 5% since 2020. Legacy resorts face operational decline, limited resources, and an aging owner base that inherited timeshare interests from parents who purchased in the 1980s and 1990s.

October 2025 Member Vote.

The Association called a special meeting on October 1, 2025. Of the 10,192 timeshare estates, 69.85% of voting interests were represented. The results showed support for the restructuring path:

The vote approved a bankruptcy filing, professional engagement, and a limited operations plan for 2026.

Subchapter V Restructuring Strategy

Streamlined Chapter 11 Process.

The Association elected Subchapter V of chapter 11, a streamlined process created by Congress in 2019 through the Small Business Reorganization Act. Subchapter V offers a streamlined framework for smaller debtors:

The U.S. Trustee Program reports that 51% of Subchapter V cases result in confirmed plans, compared to approximately 25% for traditional small business chapter 11 cases. 86% of companies that confirmed plans through Subchapter V were still operating as of December 2023. Subchapter V cases now constitute over 44% of all chapter 11 filings.

For a case commenced after June 21, 2024, the applicable debt limit is $3,024,725. While the Association's deferred maintenance obligations far exceed this threshold, those obligations represent future repair costs rather than existing debt—a distinction that permits Subchapter V eligibility for this single-asset real estate case.

Paula S. Beran, a bankruptcy attorney at Tavenner & Beran PLC in Richmond with credentials including Wake Forest University School of Law and recognition as a "Top 50: Women Virginia Super Lawyers" recipient from 2013-2016 and 2019, was appointed as Subchapter V Trustee.

Section 363(h): Selling Co-Owner Interests.

The case employs Section 363(h) of the Bankruptcy Code—a provision that permits a trustee or debtor-in-possession to sell both the estate's interest and the interest of co-owners in property.

Section 363(h) authorizes co-owner sales only when four statutory requirements are satisfied:

1. The debtor had an undivided interest as tenant in common
2. Partition in kind is impracticable
3. Sale of the debtor's interest alone would realize significantly less than sale of the entire property
4. The benefit to the estate of a joint sale outweighs the detriment to co-owners

The ABI Journal notes that many co-owners of property with bankruptcy debtors are shocked to learn that a bankruptcy court can sell their property without consent. Courts have had little trouble finding that sale of an estate's undivided interest would generate substantially less than sale of the entire property.

Member Consent Process and Timeline.

While Section 363(h) permits sale over objection, the Association has established a member consent process with a January 31, 2026 deadline.

The December 23, 2025 withdrawal of the Notice and Sale Procedures Motion is reflected on the docket. As part of the restructuring, the Association suspended member occupancy at the resort effective December 27, 2025.

Financial Position

Cash Reserves.

The $14.5 million reserve balance represents funds accumulated over years of owner assessments intended to address future capital needs. That these reserves fall so short of the $34 million five-year requirement shows the gap between historical reserve funding and actual infrastructure deterioration.

Liabilities and Obligations.

The Association's current liabilities are modest relative to its cash position. The 30-year reserve estimate of $67.3 million exceeds current cash.

First Day Relief and Case Administration

The court granted routine first day relief to maintain operations during the sale process:

The Association retained Hilco Real Estate, LLC as real estate agent. Hilco specializes in commercial real estate sales, property monetization, and strategic advisory services for distressed assets, with particular experience in hospitality transactions.

K&L Gates LLP serves as lead counsel, with Spotts Fain PC providing local representation.

Industry Context: Williamsburg Tourism Market

Williamsburg and Regional Tourism.

The resort's location in a major historic destination provides context for the local tourism market. Virginia's tourism industry generated $35.1 billion in visitor spending in 2024, a record representing a 5.4% increase from $33.3 billion in 2023. Overnight visitation increased by over one million people to 44.7 million visitors, with travelers spending $96 million per day throughout the Commonwealth. Tourism directly supported over 229,000 jobs in 2024. The Historic Triangle—Williamsburg, Jamestown, and Yorktown—captured approximately 3.9% of Virginia's visitor spending, or $1.353 billion. York County alone reached $296.8 million in visitor spending in 2024, supporting 1,870 local jobs and generating $14.7 million in tourism-related tax revenue.

The region includes major attractions. Colonial Williamsburg's 301-acre historic district—featuring 88 original 18th-century structures—marks its 100th anniversary in 2026. Busch Gardens Williamsburg celebrated 50 years of operation in 2025.

Timeshare Industry Outlook.

Despite challenges facing legacy resorts, the vacation ownership sector overall is experiencing growth. The industry reached $17.9 billion in 2024 and is projected to grow to $19.35 billion in 2025, representing an 8.1% compound annual growth rate. Hilton Grand Vacations completed a $1.518 billion term securitization in June 2025, demonstrating continued capital markets access for major operators.

Alternative Outcomes and Buyer Universe

Traditional timeshare plan dissolution typically requires a supermajority—often 75%—of owners to formally agree to termination. The Fairfield Williamsburg approach—using bankruptcy and Section 363(h)—provides an alternative path when owner consent thresholds are difficult to reach, the property requires sale as a unified asset, and partition in kind is impracticable. Virginia is among states that have enacted timeshare termination legislation, with the American Resort Development Association's Resort Owners Coalition (ARDA-ROC) leading industry efforts to address plan expiration issues.

Key Timeline

Frequently Asked Questions

What is Fairfield Williamsburg Property Owners Association?

The Association is a Virginia nonprofit corporation that manages the Fairfield Williamsburg – Patriot Place timeshare resort in Williamsburg, Virginia. The resort contains 196 timeshare units across 41 buildings, representing 10,192 individual timeshare estates (ownership intervals). Each estate represents a fractional interest in the property, typically one week of annual use rights.

Why did the Association file for bankruptcy?

The Association faces $34 million in needed repairs and capital improvements over the next five years, with 30-year reserve needs exceeding $67 million. The Association reported $16.8 million in cash, occupancy of 53.6% in 2024 and a 2026 projection of 47.9%, and 365 delinquent owners owing nearly $1 million. The bankruptcy filing enables a sale of the entire property as a unified asset.

What happens to individual timeshare owners?

The Association suspended member occupancy effective December 27, 2025. The bankruptcy seeks to sell the entire property under Section 363(h), which allows sale of co-owner interests. Proceeds from the sale will be distributed according to the confirmed plan, with each timeshare estate owner receiving their pro-rata share. However, individual timeshare estates will be extinguished upon sale, ending vacation use rights.

What is Section 363(h) and why is it used here?

Section 363(h) of the Bankruptcy Code permits sale of both the debtor's interest and co-owners' interests in property where the debtor had an undivided interest. For timeshare properties with thousands of fractional owners, this mechanism enables sale of the entire resort as a single asset—even over individual objections—if partition is impracticable and the benefit to creditors outweighs detriment to co-owners.

Who approved the bankruptcy filing?

At an October 1, 2025 special meeting, 69.85% of voting interests were represented, and 99.42% of those present voted in favor of the bankruptcy filing. PTVO Owners Association, which holds 50.07% of all estates, is the majority owner. Combined with Wyndham entities' 13.67% stake, institutional owners control nearly two-thirds of voting power.

What is Wyndham's role in this case?

Wyndham entities hold approximately 13.67% of timeshare estates. Wyndham Vacation Management, Inc. serves as Property Manager under a 1998 management agreement with a 10% fee, receiving $1.05 million in 2024.

Why was Subchapter V elected?

Subchapter V provides a streamlined, lower-cost bankruptcy process with a 90-day plan deadline and no requirement for a creditors' committee. Nationally, Subchapter V cases confirm plans at approximately 50%—double the rate of traditional small business chapter 11 cases—and 86% of confirmed debtors remain operating. The efficiency suits this single-asset real estate case.

What will happen to the resort property?

The Association retained Hilco Real Estate, LLC to market and sell the property.

What is the timeline for the case?

Key dates include: January 31, 2026 (member consent deadline); February 13, 2026 (general bar date for filing claims); March 5, 2026 (plan filing deadline); and March 27, 2026 (conditional dismissal hearing if no plan is filed). The Subchapter V timeline sets the case schedule in the first quarter of 2026.

Is this situation common for timeshare properties?

Timeshare association bankruptcies using Section 363(h) are relatively rare. Industry-wide, timeshare resorts have decreased by approximately 5% since 2020 as operators shutter older properties. Rising maintenance fees (up 36% over five years) and special assessments are part of the industry data.

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