With all the doom, gloom, and cutbacks, this thought occurred to me...

[nhmomx2]

On the off chance of WDW folding (I'm thinking this is very unlikely!)...does anyone know what would happen to our interest in DVC?

 

[chris1gill]

This would just never happen... I wouldn't even go there.... Disney is made up of many different companies, and DVC makes more money for them than most of their companies...

 

[KNWVIKING]

Never happen. If I see IBM, GE, GM, Ford, AT&T, etc start filing for protection, then I'd worry about WDW. But if that happens,the least of any of our problems will be where we go for vacation.

 

[nhmomx2]

Like I said..."very unlikely". I guess this was more of a hypothetical, technical, legal type question!!

 

[lyndon1]

Never say never but if Disney folds it would be the end of life as I know it........things will have to get really bad..........your chances of your bank going out of business is 1 out of 9. Disney going belly up is just not going to happen.

Lyndon

 

[DVCDAVE]

Keep in mind that Standard and Poors downgraded their credit rating to A- from AA just last month AND kept them on their creditwatch list for possible further downgrades. Add to that their acqusition of Fox Family, and one can see the possibilities of further problems. Further, Disney is now making motions to back out of the Fox Family acquistion, probably due to their credit rating problems.

 

[jctwizzer]

An A- credit rating is by no means the sign of major problems---altho those with a "sky is falling mentality" might consider the trend to be bad news at the time......A- is investment grade, not speculative. At this point there is no indication that WDW has any long term problems; and if they did, I suspect they could find a willing and able buyer with no problem.

 

[DVCDAVE]

Excuse me JCTWIZZER, but where did I say the sky is falling, or that their debt was speculative or junk. I only stated a news related fact. A credit rating drop is a problem for any company this size, albiet not a sign of the end. Any dowmgrade will mean that the issuer will have to pay an extra premium in the debt yield over another issuer of higher rated debt. For you and me an extra 1/4 or 1/2 point in yeild is no big deal. But, when you are in the debt market for hundreds of millions of dollars, that extra premium equates to a lot of money directly impacting cash flow.

In addition S&P's comments related to keeping them on the creditwatch list were due to "concerns related to negative trends in the entertainment industry". Their words not mine. This doesn't mean, nor did I state Disney is finished, for sale, or speculative junk.

 

[nhmomx2]

This wasn't intended to be a debate on the state of Disney finance, rather a question as to what would happen to our investment should anything ever happen (prior to 2042 that is - loL!). Some of us have invested quite a large chunk of money into the DVC and I was wondering if anyone had read through all the materials (legal mumbo jumbo!) closely enough to be able to answer the question.

 

[drusba]

I guess your question is what happens if Disney and all its related companies like DVD (that is in charge of DVC) go bankrupt. From the legal side that would result in the end of the DVC resort reservation component of the program, meaning your ability to reserve with points at the various resorts would end and each resort would essentially no longer be linked so that you could not stay at a different resort than the one you own. It would not end your ownership interest. Without an operating Disney management company for the resort, the members of each particular resort would be deemed to be in control and they would have to set up a program for their using their own resort and for operating it (including setting and collecting dues, etc.). Whether that could realistically be done is questionable. Note, the possibility of Disney going under completely is not an issue that keeps me up at night.

 

[nhmomx2]

Thank you Drusba! That's exactly what I wanted to know. I don't forsee this becoming an issue, but I did think it a prudent question - one I probably should have asked before dropping money into it - hindsight is a wonderful thing!! I'm sure the probability of Disney going under is less likely than me getting struck by lightening. None the less...question asked and answered! Again...thank you!