Bluegreen Vacations receives notice from Bass Pro regarding marketing agreementBluegreen Vacations (BXG) announced that on March 22, Bluegreen Vacations Unlimited, a wholly-owned subsidiary of Bluegreen, and Bluegreen/Big Cedar Vacations, a 51%-owned subsidiary of BVU, received a formal notice delivered pursuant to the Amended and Restated Marketing and Promotions Agreement dated December 31, 2007 from Bass Pro and Big Cedar notifying the company that Bass Pro intends to cancel the company's access to the Bass Pro marketing channels and advertising materials as of 30 days from the notice unless the company cures certain alleged breaches to Bass Pro's satisfaction. The alleged breaches cited in the notice include those previously disclosed by the company, and specifically Bass Pro's belief that the amounts paid to it as VOI sales commissions should not have been adjusted for certain purchaser defaults, breaches regarding the calculation of commissions and other amounts payable under the Agreement and other related agreements including reimbursements paid to the company, as well as matters regarding the operations at Bluegreen/Big Cedar. In addition, the notice references a breach Bass Pro alleged in 2014 regarding customer service, notwithstanding that this alleged breach has not been the subject of any correspondence since that time and that the customer service issues arising from Bass Pro have, to the company's knowledge, been minimal and been appropriately addressed. As indicated in Bass Pro's notice, the parties have recently held several in person meetings and as publicly disclosed, the company has been optimistic that a resolution of the outstanding issues would be achieved. These recent discussions with Bass Pro were not about alleged breaches but, at Bass Pro's suggestion, were focused on how best to move forward. These discussions included a possible restructuring of the amount and timing of compensation paid to Bass Pro, an extension of the term of the Agreement, the timing of entry into the Cabela's (CAB) stores and a mutual waiver of any prior alleged claims between the parties. The company believed based on its telephone discussions and subsequent meetings with Bass Pro management that Bass Pro and the Company were in basic agreement regarding the waiver of past issues and the terms of compensation going forward but these were subject to reaching an agreement on the terms of an extension and the timing of entry into Cabela's. Prior issues between the parties primarily related to a claim by the company that Bass Pro owed it additional amounts and a claim by Bass Pro regarding reimbursements and additional annual revenue going forward as well as matters regarding the operation of the Bluegreen/Big Cedar joint venture. The company has suggested on numerous occasions that the parties agree to binding arbitration to resolve these issues, but Bass Pro has refused to do so. While these discussions with Bass Pro were ongoing, the company, with Bass Pro's cooperation, has continued to execute the vacation package marketing strategy contemplated by the Agreement including the recent opening of a new marketing kiosk in Las Vegas, Nevada as well as plans to open an additional kiosk in a former Cabela's store in Rogers, Arkansas in the near term. Given the frequency and positive tone of the discussions with Bass Pro and no indication by Bass Pro of the position taken in its notice regarding customer service, the company was both surprised and disappointed by Bass Pro's current position. The company will seek to continue its discussions with Bass Pro with the hope of reaching a mutually satisfactory resolution and to obtain information regarding what Bass Pro believes would constitute the cure of the breaches that it has alleged. However, if the issues with Bass Pro are not resolved or any identified cures achieved, the company's results will be adversely impacted and the company will, in that case, pursue all remedies available to it, including pursuing recovery of all damages caused by Bass Pro's actions. BBX Capital(BBX) has advised the company that in light of these events, it is re-evaluating the previously announced short form merger that would have taken the company private and BBX Capital may choose not to proceed with the merger. BXG  - $16.22
0.09 (0.56%) CAB  - $0.00
(0.00%) BBX  - $6.03
-0.19 (-3.05%) |