Skyline Tower Resort: Atlantic City Timeshare Pursues Section 363(h) Liquidation

Skyline Tower Resort Vacation Condominium Association filed for chapter 11 Subchapter V protection in November 2025 after 99.93% of voting interests authorized the Board to pursue a sale of the entire 32-story Atlantic City property and dissolution of the timeshare plan. The 43-year-old tower at 100 S. North Carolina Avenue—one block from the Atlantic City Boardwalk—faces approximately $34 million in projected capital needs through 2031, while 1,209 interval owners owe more than $2.48 million in delinquent maintenance fees. The filing follows a broader Wyndham portfolio update in which Club Wyndham announced several legacy resorts would cease operations at year-end 2025.

With PTVO Owners Association, Inc. controlling 67.81% of vacation ownership interests, the case will proceed as a Section 363(h) sale to liquidate approximately 8,848 individual owners' fractional interests under the Bankruptcy Code. The Association has engaged K&L Gates LLP as special sale counsel and Hilco Real Estate, LLC as real estate agent to market the property, with resort operations set to cease December 31, 2025.

Property Background and Timeshare Structure

The Skyline Tower.

Skyline Tower is a 32-story concrete-constructed high-rise built in 1982 above a parking deck structure, located one block from the Atlantic City Boardwalk at 100 S. North Carolina Avenue. The property contains 20 commercial units occupying floors one through six and 296 residential units on floors seven through twelve and fourteen through thirty-three. Floor thirteen does not exist per the building's original design.

The property was developed as the Fairfield Atlantic City - Skyline Tower, with the Master Deed recorded in Atlantic County in 2005 and subsequently amended in 2006 and 2011. The Association, a not-for-profit corporation incorporated under New Jersey law on October 19, 2004, administers the timeshare condominium pursuant to the Master Deed and By-Laws. Vacation Ownership Interests (VOIs) at Skyline Tower are defined as undivided interests as tenants in common with other owners in residential units or groupings of units. The original developer, Fairfield Resorts, Inc., organized VOIs by floor, with each timeshare owner receiving a fractional interest on one of the property's residential floors. Each VOI owner holds a fractional undivided interest in the common elements proportional to their ownership stake.

The property offers resort-style amenities including an enclosed pool, fitness room, child activity center, meeting space, and fully furnished units with full kitchens. The property was renovated in 2011 and has operated under the Club Wyndham brand as part of the broader Travel + Leisure Co. portfolio. All 20 commercial units are owned by Wyndham Vacation Resorts, Inc., serving various operational functions:

Ownership Structure and PTVO Dominance

PTVO Owners Association, Inc. controls 67.81% of total vacation ownership interests. The October 2025 member vote authorized bankruptcy and sale.

The approximately 8,848 individual interval owners collectively hold 21.67% of the property through roughly 5,126 separate contracts. The largest individual owner (Richard Sirmon) holds 0.23%, with other top holders ranging from 0.12% to 0.17%.

The Association itself has been acquiring VOIs through sheriff's sales and deeds from deceased or delinquent owners. In the months preceding bankruptcy, the Association recorded sheriff's deeds and interval deeds conveying fractional interests from delinquent owners across floors seven through thirty-three. Many of these interests were acquired from deceased owners whose estates failed to maintain fee payments.

Path to Bankruptcy: Capital Needs and Delinquency

The 2025 Reserve Study.

The Association's 2025 Reserve Study projects approximately $34 million in repairs, capital improvements, and renovations needed from 2025 through 2031. The study identifies immediate capital needs exceeding $4.2 million in 2026 and 2027 alone, including $3.7 million in 2026 and an additional $500,000 in 2027.

To address the funding shortfall, the Reserve Study recommends increasing annual reserve contributions by 9.75% per year from 2026 to 2031—a cumulative 58.5% increase over six years—followed by 3% annual increases through 2054. At the current contribution rate, reserve balances would become negative by 2031, leaving the Association unable to fund necessary repairs.

Delinquency and Occupancy Challenges.

In addition to capital needs, a portion of interval owners have stopped paying maintenance fees. As of October 31, 2025, 1,209 interval owners were not current in their payments, totaling $2,482,681.56 in past-due fees—approximately 24% of interval owners.

The Association has historically utilized outside debt collection service providers and pursued foreclosure proceedings through an Inventory Foreclosure Agreement with Wyndham Vacation Resorts dated February 2, 2013, under which WVR pays foreclosure costs in exchange for receiving title to delinquent inventory. However, the volume of delinquencies has outpaced collection efforts.

The property's occupancy rates have also been below industry benchmarks, with 2024 occupancy at 63.3% compared to the industry average of 80.0%. Skyline Tower's occupancy was more than 15 percentage points below the industry average.

Wyndham Portfolio Restructuring Context

Skyline Tower's bankruptcy follows Wyndham's 2025 portfolio update. In July 2025, Wyndham announced plans to remove some properties from its portfolio, stating that "some properties require significant upgrades or are located in destinations that are no longer as desirable." Club Wyndham's official communication explained: "To keep maintenance fees affordable and avoid costly special assessments, a handful of resorts may be removed from the Club Wyndham portfolio. This is a common occurrence across the timeshare industry as properties age to expected life expectancy." The company announced that resorts voting to cease operations would be removed from the Club Wyndham system effective December 31, 2025, with maintenance fees for 2026 not charged at affected properties and each resort moving at its own pace through the legal process required for sale.

Travel + Leisure Co. (formerly Wyndham Destinations) is the largest vacation ownership company in the world by number of owners and resorts, operating a network of more than 270 properties, 25,000 individual units, and over 800,000 property owners across North America, the Caribbean, and the South Pacific. The company has been evolving beyond pure vacation ownership toward a broader hospitality platform, targeting upscale markets and diversifying geographically.

Member Authorization and Sale Mandate

October 2025 Special Meeting.

On October 4, 2025, the Association held a duly called special meeting of members with 58.30% of voting interests (4,838.5 of 8,299) represented in person or by proxy, exceeding the 15% quorum requirement. Members voted to authorize bankruptcy and liquidation:

PTVO holds 67.81% of voting interests. The resolution to suspend operations specifically authorized the Board to suspend occupancy at the resort effective December 27, 2025, suspend collection of 2026 maintenance fees, waive reserve funding requirements, cancel existing reservations after December 27, 2025, and transfer reserve fund balances to pay operating expenses during the liquidation process.

Operations Suspension.

Local news reports confirmed that more than 100 employees of the Club Wyndham Skyline Tower would be laid off as ownership prepared to sell the property at year-end 2025. The Association filed a WARN notice with the New Jersey Department of Labor and Workforce Development indicating 116 layoffs effective December 31, 2025 and January 1, 2026.

Reports indicate employees were informally told of the potential closure over the summer of 2025, months before the formal member vote.

Subchapter V Process and Sale Strategy

Why Subchapter V.

The case proceeds under Subchapter V of chapter 11, the Small Business Reorganization Act framework that went into effect on February 19, 2020. Subchapter V provides the following features for a single-asset liquidation case:

• Streamlined proceedings with accelerated plan deadlines
• No creditors' committee expense (unless the court orders otherwise)
• Trustee focused on facilitating consensual resolution rather than operating the business
• Plan deadline of 90 days from order for relief (February 13, 2026)
• Reduced administrative burden and professional fees

The Subchapter V trustee's primary role is assisting parties in reaching a consensual plan. Holly S. Miller, Esquire has been appointed as Subchapter V Trustee.

Section 363(h) Sale Mechanism.

The Association intends to conduct a Section 363(h) sale—a mechanism that permits sale of both the bankruptcy estate's interest and co-owners' interests when certain conditions are met. This is essential for selling the entire property when thousands of interval owners hold fractional tenant-in-common interests.

Section 363(h) authorizes such a sale when four conditions are satisfied:

1. Partition in kind is impracticable
2. Sale of the estate's undivided interest alone would realize significantly less than sale of the whole
3. The benefit to the estate outweighs the detriment to co-owners
4. The property is not used for public utility purposes

Courts have recognized that sale of a bankruptcy estate's undivided interest will generate substantially less than sale of the entire property due to the "chilling effect" on prospective purchasers unwilling to take on fractional ownership. For a timeshare property with nearly 9,000 individual owners, partition in kind would be impracticable and sale of the Association's 0.35% interest alone would generate substantially less than a whole-property sale.

Consent Solicitation Process.

Rather than litigate against all 8,848+ interval owners, the Association is seeking voluntary consent through a Member Consent form served on each owner. The process provides:

• At least 30 days' notice for owners to consider and respond
• Opportunity for owners to obtain legal advice
• Tabulation of responses by Omni Agent Solutions, Inc.
• Section 363(h) adversary proceeding only against non-consenting owners

Non-consenting owners would face Section 363(h) proceedings seeking court judgment authorizing sale of their interests.

Authorized Sale Actions.

The member resolutions specifically authorized the Board to:

• Sell the Association's interest jointly with all member interests
• Seek Court approval of marketing, bid, and sale procedures
• Potentially designate a stalking horse bidder
• Sell property free and clear of all member interests (interests attach to proceeds)
• Terminate or amend the declaration and timeshare plan
• Assume, assign, or reject executory contracts and unexpired leases at closing
• Distribute net sale proceeds after costs of administration
• Dissolve the Association following sale completion

Financial Position and Claims

The Association entered bankruptcy with cash reserves totaling $6,225,495.55 across operating, investment, reserve, and tax accounts held at Bank of America and Merrill Lynch. The Association also reported approximately $1,375,564 in accounts receivable, primarily representing maintenance fees owed by interval owners.

The Association does not directly employ staff—all operations are conducted through Wyndham Vacation Management, Inc. (now Vacation Resort Management, Inc.) under a Management Agreement dating to 2006. Management fees totaled $1,986,488.40 in 2024, with the Property Manager passing through costs on a dollar-for-dollar basis without markup and compensation limited to $50 per unit per month plus 10% of operating expenses and reserve contributions.

The Association carries no secured debt. Trade creditors consist primarily of vendors providing property maintenance and operational services, with unsecured claims totaling under $300,000. The Association anticipates paying all claims in full as part of the chapter 11 case.

Industry Context: Timeshare Sector Challenges

Timeshare Industry Overview.

The U.S. timeshare industry reported total sales volume of $10.5 billion in 2024 and an overall industry valuation of $35.7 billion. The industry encompasses 1,541 resorts with 201,600 units, averaging 131 units per resort.

Maintenance Fee Pressure.

Average maintenance fees reached $1,480 per weekly interval in 2024—a 17.5% increase from $1,260 in 2023. Fee increases stem from:

• Inflation across goods and services
• Rising labor costs
• Utility price increases
• Rising insurance premiums, particularly in coastal markets

Maintenance fees typically increase 5% to 10% annually, with special assessments imposed when resorts face unexpected costs like major repairs or high delinquent accounts.

Timeshare Termination Precedents.

Industry experts note that many governing documents of timeshare associations define timeshare termination clauses, and some states have laws outlining how legacy and potentially failing resorts can be wound down. Successful terminations include:

• Waves Condominium (Ocean City, Maryland): Terminated timeshare regime in October 2016, distributing millions to owners
• Forest Glen Inn Resort (North Conway, NH): Terminated timeshare plan in December 2016

When resorts face financial difficulties, boards may determine that termination and property disposal is the only viable option.

Atlantic City Market Context

Tourism and Gaming Economy.

Atlantic City reported approximately 18 million visitors in 2024—a 1.2% increase over 2023. Atlantic County draws over 20% of New Jersey's overnight visitors, with nearly 11 million people booking accommodations in the area.

The casino industry provided a record $572 million to the Casino Revenue Fund in Fiscal Year 2024, with 23,000 employees dependent on the industry and $605 million spent on goods and services from New Jersey vendors in 2024. The resort town's casinos have invested more than $1 billion since 2020 to boost tourism.

Casino Profitability Challenges.

Atlantic City casino profits fell 9.3% in 2024 to $675.1 million, down from $744.7 million in 2023. Only 2 of 9 properties—Caesars (up 10.7%) and Hard Rock (up 7.9%)—saw profit increases. Bally's saw profits decline nearly 77%.

Casinos face increased operating costs including labor, utilities, goods, and insurance premiums, along with reduced visitation as customers shift to online gambling.

Related Atlantic City Timeshare Bankruptcy.

Skyline Tower is not the first Atlantic City timeshare to face bankruptcy in 2025. Flagship Resort Development Corp., which owned Flagship and Atlantic Palace resorts in Atlantic City and La Sammana in Brigantine, filed for bankruptcy on May 10, 2025 with $50-100 million in assets and liabilities.

Flagship's bankruptcy came after years of financial strain attributed to COVID-19, rising interest rates, reduced margins on consumer financing, and timeshare defaults approaching 40%. The company also faced class action litigation after a 2022 jury awarded $1,069,285 to 19 consumers for violations of the New Jersey Real Estate Timeshare Act and Consumer Fraud Act.

Professional Retentions and Key Parties

Wyndham Vacation Resorts serves as a 10.17% owner and commercial unit owner, while its affiliate Wyndham Vacation Management operates as Property Manager. Both entities are indirect subsidiaries of Travel + Leisure Co.

Case Timeline

Owner Options Post-Sale

Wyndham has communicated options for owners at affected resorts:

Option 1: Club Wyndham Access Points Owners in good standing can swap their ownership stake for Club Wyndham Access points, allowing continued participation in the broader Wyndham vacation ownership network without requiring continued ownership at the closed property.

Option 2: Proportional Sale Proceeds Alternatively, owners may receive their proportional share of net sale proceeds after administrative costs and claims are satisfied. Distribution to Association Members may be subject to set-off of amounts owed to the Association for delinquent maintenance fees and/or special assessments.

Maintenance fees for 2026 will not be charged at resorts that voted to cease operations.

Frequently Asked Questions

What is Skyline Tower Resort? Skyline Tower is a 32-story timeshare condominium high-rise built in 1982 in Atlantic City, New Jersey, containing 296 residential units and 20 commercial units, located one block from the Boardwalk and operating under the Club Wyndham brand as part of the Travel + Leisure Co. portfolio.

Why did the Association file for bankruptcy? The Association filed after members voted 99.93% in favor, facing approximately $34 million in projected capital needs through 2031 and $2.48 million in delinquent maintenance fees from 1,209 interval owners. The 2025 Reserve Study projected that reserves would go negative by 2031 at current contribution rates, and funding the necessary repairs would require maintenance fee increases of 58.5% over six years.

What will happen to the property? The Association will conduct a Section 363(h) sale of the entire property, selling free and clear of all approximately 8,848 interval owners' interests. The timeshare plan will be terminated and the Association dissolved following the sale.

Who controls the sale decision? PTVO Owners Association, Inc. holds 67.81% of vacation ownership interests. The approximately 8,848 individual interval owners collectively hold 21.67% through roughly 5,126 separate contracts.

Is Skyline Tower the only Wyndham property closing? No. Wyndham announced in 2025 that several legacy resorts would cease operations at year-end 2025 as part of a portfolio restructuring affecting properties that require significant upgrades or are located in destinations no longer considered desirable.

What will happen to employees? The WARN notice indicates 116 employees will be laid off effective December 31, 2025 and January 1, 2026. Severance is being offered and some employees will be offered transfer opportunities to New York, Florida, or Chicago locations. A skeleton crew will remain to maintain the property until sold.

What options do timeshare owners have? Owners in good standing can either swap their ownership interest for Club Wyndham Access points or receive their proportional share of sale proceeds after administrative costs. Owners with delinquent maintenance fees may have amounts owed set off against any distribution.

Will owners have to pay 2026 maintenance fees? No. Maintenance fees for 2026 will not be charged at resorts that voted to cease operations. The Association suspended collection of 2026 fees as part of the member authorization.

What is Section 363(h)? Section 363(h) of the Bankruptcy Code authorizes sale of both the estate's interest and co-owners' interests in property where the debtor has an undivided interest, subject to four conditions: partition is impracticable, sale of the estate's interest alone would realize significantly less, the benefit to the estate outweighs detriment to co-owners, and the property is not utility property.

When will the sale occur? The Subchapter V plan deadline is February 13, 2026, with a status conference on January 15, 2026. The Association has engaged Hilco Real Estate, LLC to market the property and K&L Gates LLP as special sale counsel.

Who is the claims agent for Skyline Tower Resort?

Omni Agent Solutions, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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