Star Island Vacation: Disney-Area Timeshare HOA Pursues $11.5M Orderly Liquidation

Star Island Vacation Ownership Association, Inc., the homeowners association governing a portion of the Star Island Resort timeshare complex near Walt Disney World in Kissimmee, Florida, filed for chapter 11 Subchapter V protection on November 6, 2025. The filing follows other Wyndham-affiliated legacy resort exits and comes as aging timeshare properties address post-Surfside reserve requirements, higher insurance costs, and infrastructure repair needs. Despite holding $11.56 million in cash reserves and carrying zero secured debt, Star Island faces projected capital expenditures exceeding $12.9 million through 2026—a funding gap that prompted the Association's decision to pursue a Section 363(h) sale rather than levy special assessments the Association determined were not feasible.

The case joins other PTVO-affiliated timeshare association bankruptcies, with PTVO Owners Association, Inc. controlling 47.38% of voting interests and Wyndham Vacation Resorts, Inc. holding another 14.94%. Together, these institutional owners control 62.32% of the property, determining the outcome of major association decisions. The remaining 36.15% is scattered among approximately 9,852 individual interval owners, creating administrative challenges for the consent solicitation process required under Section 363(h).

Property Background and Resort History

Location and Amenities.

Star Island Resort and Club is a 65-acre timeshare property located at 5000 Avenue of the Stars in Kissimmee, Florida—approximately 4 miles from the entrance to Walt Disney World and adjacent to the 120-acre Lake Cecile. Walt Disney World Resort, SeaWorld Orlando, Universal Studios, and Orange County Convention Center are within 15 to 20 minutes by car.

The resort offers Mediterranean-styled accommodations ranging from mini suites to three-bedroom villas, along with a full-service spa, fitness center, tennis facilities (including the Vic Braden Tennis College), and poolside amenities. Industry listings characterize Star Island as one of the most sought-after properties in the Kissimmee area due to its Disney proximity.

Corporate Timeline.

The Association was incorporated as a Florida not-for-profit corporation to administer the timeshare plan for the portion of Star Island now governed by the Debtor. The resort's business origins trace to 1982, making the property over four decades old and a factor in the capital expenditure requirements described in the case materials.

Club Wyndham Relationship.

Star Island operates as part of the Club Wyndham vacation ownership network, though the tall condominium buildings at the resort are Club Wyndham inventory while the three-level walk-up condominium buildings constitute the separate Star Island Resort & Club governed by the Debtor Association. This distinction matters because Wyndham's announcement that it would remove several legacy resorts from its portfolio includes properties like Star Island with aging infrastructure and changing destination dynamics.

Travel + Leisure Co. (formerly Wyndham Destinations, Inc.) serves as the parent organization for the Club Wyndham network. The company develops, sells, and manages timeshare properties under several vacation ownership clubs, with approximately 900,000 members owning across products including Club Wyndham Select, Club Wyndham Access, and Presidential Reserve.

Ownership Structure and Control

Vacation Ownership Interest Distribution.

Combined, PTVO and Wyndham control 62.32% of voting interests—sufficient to approve major association actions including authorization to pursue sale and dissolution. The individual owners' 36.15% stake is fragmented across nearly 10,000 separate parties.

PTVO Structure Explained.

PTVO stands for "Property Trust Vacation Ownership," a structure where inventory at multiple Club Wyndham resorts is deeded fee simple to First American Trust as trustee for the PTVO Owners Association, Inc. The PTVO Owners Association operates similarly to a condominium association and holds Wyndham's bulk position in individual resort associations. When Wyndham determines that a legacy resort should exit its portfolio, PTVO's controlling stake enables execution of that decision.

Vacation Resort Management, Inc. (f/k/a Wyndham Vacation Management, Inc.) provides overall property management under an agreement dated January 1, 2009, while Star Island Management Corp. handles on-site day-to-day operations. Wyndham is a 14.94% owner and provides property management through its affiliate. Star Island Management Corp. filed a separate Notice of Appearance in the bankruptcy case.

Path to Bankruptcy: The Reserve Funding Crisis

Projected Capital Expenditure Gap.

Despite maintaining $11.56 million in cash reserves as of November 4, 2025, the Association faces capital expenditure requirements that exceed available reserves and cannot be funded through normal annual assessments. The filings describe approximately $13 million in repairs against approximately $11.5 million in reserves, with annual assessment contributions insufficient to bridge the gap while maintaining operations.

Why Special Assessments Weren't Viable.

The Association determined that levying special assessments sufficient to cover the capital shortfall was not feasible for several reasons:

Scale of Required Assessments: Covering a $12.9 million capital need across 9,852 individual owners would require substantial per-owner assessments, potentially thousands of dollars per interval beyond regular maintenance fees. Given that the average timeshare owner already pays approximately $1,480 annually in maintenance fees (up 36% since 2020), additional special assessments would increase total ownership costs.

Default Risk: Timeshare owners who fail to pay special assessments lose access to their units and face assessment liens on their interests. The Association cited the risk of defaults, delinquent accounts, and foreclosure costs from large assessments.

Industry Patterns: The broader timeshare industry has seen increasing owner abandonment as maintenance costs rise. When owners determine that their timeshare's ongoing costs exceed its value, some stop paying, which reduces assessment income for associations.

Association members authorized the Board to pursue sale and dissolution rather than attempt to raise funds through assessments.

Subchapter V Process and Section 363(h) Sale Strategy

Legal Framework.

The case proceeds under Subchapter V of chapter 11, a streamlined process created through the Small Business Reorganization Act of 2019 that does not require a creditors' committee, sets a 90-day plan deadline, and removes the absolute priority rule. The current Subchapter V debt limit of $3,424,000 (effective April 1, 2025) applies to debts, not assets. An association with $11.5 million in cash but minimal unsecured debt qualifies for Subchapter V, allowing the process to be used for a single-asset sale with significant liquidity.

The Debtor is pursuing a Section 363(h) sale to sell the entire property free and clear of all co-owner interests. Section 363(h) of the Bankruptcy Code provides a mechanism for selling co-owned property where partition is impracticable, a separate sale would realize less, and the benefit outweighs detriment.

Consent and Sale Process.

The Association is pursuing a two-track process: First, each member receives a "Stipulation and Consent Agreement Authorizing Marketing and Sale of Ownership Interest(s)" with at least 30 days to consider and return consent, agreeing to the sale of their undivided interests with proceeds distributed proportionally. Second, if members decline consent, the Debtor will file adversary proceedings under Section 363(h). Given approximately 9,852 individual owners, extensive non-consent could require thousands of individual adversary actions—a costly process that the consent solicitation aims to avoid.

Per corporate resolutions, the Association is authorized to:

1. Sell Association's interest jointly with all member interests
2. Seek Court approval of marketing, bid, and sale procedures
3. Sell property free and clear of all member interests (interests attach to proceeds)
4. Terminate the timeshare plan under Florida Statutes Chapter 721
5. Distribute net sale proceeds after costs of administration
6. Dissolve the Association following sale completion

Financial Position

The Association entered bankruptcy with $11,561,841.15 in total cash (as of November 4, 2025) held across operating, reserve, and tax accounts at Wells Fargo, Comerica Financial Advisors, and Bank of America. Reserve funds are invested with priorities of safety of principal, liquidity, and maximizing yields—permitted instruments include government securities, collateralized repurchase agreements, and U.S. Treasury Notes.

The Association carries zero secured debt. All sale proceeds (after administrative costs) flow directly to owner distributions without secured creditor priorities.

Industry Context: The Florida Timeshare Crisis

Post-Surfside Reserve Requirements.

Following the June 2021 Surfside condominium collapse, Governor DeSantis signed legislation changing how Florida condominium and timeshare associations must fund reserves. Florida Senate Bill 4-D creates requirements for aging timeshare properties:

For properties like Star Island that were built in the 1980s and historically relied on minimal reserve contributions offset by special assessments when needed, these requirements change reserve funding practices. Boards can no longer defer maintenance by waiving reserves—they must fund or face personal liability.

Florida's property insurance market adds assessment pressure. With annual premium increases of 20-30% in recent years, many carriers have exited the state and remaining insurers have imposed rate increases that flow into HOA and timeshare assessments—some Florida communities have seen insurance costs triple in recent years.

According to Ernst & Young's 2025 Timeshare Industry Report, the average annual timeshare maintenance fee rose to $1,480 per weekly interval equivalent—a 36% increase since 2020 (up from ~$1,088). Factors driving increases include higher insurance and utility costs, increased labor and management expenses, capital improvement projects, mandated reserve fund contributions, and the impact of delinquent owner accounts that force remaining owners to cover shortfalls.

Orlando Tourism Market Dynamics.

Central Florida generated a record $94.5 billion in total economic impact in 2024. The May 2025 opening of Epic Universe at Universal Orlando—the first full theme park to open in Central Florida in 25 years—is projected to draw 5-9 million additional visitors and contribute $11 billion to Orlando's GDP over the next decade.

The rise of short-term rentals (over 20,000 units in Orange County alone, with Kissimmee properties averaging $41,000 annual revenue at 67% occupancy) has increased competition for traditional timeshare models.

Wyndham Portfolio Restructuring

Strategic Right-Sizing.

Club Wyndham announced in 2025 that several legacy resorts would be removed from its portfolio as part of strategic right-sizing. From official Wyndham communications:

• "Some properties require significant upgrades or are located in destinations that are no longer as desirable"
• "To keep maintenance fees affordable and avoid costly special assessments, a handful of resorts may be removed from the Club Wyndham portfolio"
• Wyndham compared the closures to "efforts by cruise lines who retire aging ships or airlines that decommission planes"

This language aligns with the cost and condition issues described in the case materials.

Owner Options at Affected Resorts.

Wyndham has communicated specific options for owners at resorts selected for portfolio exit:

Option 1 - Club Wyndham Access Points: Owners in good standing can swap current inventory for equivalent Club Wyndham Access points at no cost, maintaining vacation ownership benefits within the broader network.

Option 2 - Proceeds Distribution: Alternatively, owners may receive their proportional share of sale proceeds from the property transaction.

Per Club Wyndham announcements, existing reservations through end of 2025 will be honored, maintenance fees for 2026 will not be charged at resorts that voted to cease operations, and a small team will remain to maintain properties until sold.

PTVO-Affiliated Bankruptcy Pattern.

Star Island is part of a group of PTVO-affiliated timeshare association bankruptcies using Section 363(h) strategies:

All cases below are active:

All cases feature K&L Gates as special counsel and Omni Agent Solutions as claims agent.

First Day Motions and Case Administration

The first day hearing on November 18, 2025 resulted in interim approvals for the motions on cash management, PII suppression, prepetition taxes, insurance administration, and the notice/consent form, allowing operations to continue and the consent solicitation process to proceed.

K&L Gates' retention application specifically cited the firm's experience "in representing developers, associations, and other parties in restructuring and/or the sale of timeshare resorts, including in bankruptcy cases."

Key Case Timeline

Frequently Asked Questions

What is Star Island Vacation Ownership Association?

Star Island Vacation Ownership Association, Inc. is a Florida not-for-profit corporation that administers 4 buildings (184 units) at the Star Island Resort timeshare complex in Kissimmee, Florida—located approximately 4 miles from Walt Disney World's entrance. The Association was incorporated in 2000 to manage the timeshare plan for this portion of the larger Star Island Resort.

Why did Star Island file for bankruptcy if it has $11.5 million in cash?

Although the Association holds substantial cash reserves, projected capital expenditures of $12.9 million+ through 2026 exceed available reserves. Annual assessment contributions are insufficient to bridge the gap, and the Association determined that special assessments large enough to cover the shortfall were not feasible.

Who controls Star Island?

PTVO Owners Association, Inc. controls 47.38% of voting interests, and Wyndham Vacation Resorts, Inc. holds 14.94%—combined, 62.32% institutional control. Approximately 9,852 individual owners collectively hold 36.15%, while the Association itself holds 1.53%.

What will happen to the Star Island property?

The Association is pursuing a Section 363(h) sale of the entire property free and clear of all member interests. Following the sale, the timeshare plan will be terminated under Florida law, net proceeds will be distributed to owners proportionally, and the Association will dissolve.

Is Star Island part of Wyndham's resort closures?

Yes. Star Island is among several legacy resorts being removed from the Club Wyndham portfolio as part of Wyndham's strategic right-sizing. Wyndham has characterized these closures as analogous to cruise lines retiring aging ships or airlines decommissioning planes.

What options do timeshare owners have?

Wyndham has communicated two options for owners at affected legacy resorts: (1) swap current ownership for equivalent Club Wyndham Access points at no cost, maintaining vacation ownership benefits within the broader network; or (2) receive proportional share of sale proceeds from the property transaction.

Will Star Island remain open during bankruptcy?

Operations continue during the chapter 11 process. Existing reservations through end of 2025 will be honored, and a small team will maintain the property until sold. Maintenance fees for 2026 will not be charged at resorts that voted to cease operations.

What is a Section 363(h) sale?

Section 363(h) of the Bankruptcy Code allows sale of co-owners' interests in property when partition is impracticable and sale of the entire property benefits all parties. It enables the Association to sell the entire resort without unanimous owner consent.

How many individual owners are affected?

Approximately 9,852 individual parties hold vacation ownership interests in the property. Each must either consent to the sale through the stipulation process or potentially face adversary proceedings under Section 363(h).

Why are so many Florida timeshares facing financial distress?

Florida timeshare associations confront a convergence of challenges: post-Surfside legislation mandating structural inspections and eliminating reserve funding waivers, Florida's insurance crisis with 20-30% annual premium increases, general construction and labor cost inflation, and infrastructure needs at properties built 30-40+ years ago. These pressures have pushed assessment costs beyond what many owner bases can sustain.

---

For more bankruptcy case analyses, visit ElevenFlo's bankruptcy blog.