Festiva Adventure Club Lawsuit: Tennessee, Maine, and Louisiana Actions

The Festiva Adventure Club lawsuits are a series of state attorney general enforcement actions and private lawsuits filed since 2005 that accused Festiva and its affiliates of deceptive, high-pressure sales of points-based vacation memberships, and that produced settlements providing refunds, contract cancellations, loan forgiveness, and deedback options for affected consumers. The largest single recovery came from Tennessee at $3 million, and at least five states — Missouri, Alabama, North Carolina, Maine, and Tennessee — reached formal settlements with the company or its affiliates.¹

What Consumers Alleged

The complaints against Festiva followed a consistent pattern across states. Attorneys general and private plaintiffs said the company drew consumers to sales presentations with promises of free gifts such as hotel stays, laptops, or meals, and misled them into believing they had won valuable prizes.² Tennessee’s office described a “telemarketing and direct mail enterprise” that used “fraudulent and deceptive tactics to lure Tennesseans into attending high-pressure sales presentations.”¹

Once inside, buyers paid between $5,000 and $20,000, according to the North Carolina Department of Justice, for memberships that consumers later said did not match what was promised: reservations were hard to obtain, the accommodations were unavailable, and the reservation system was difficult to use.² In Maine, buyers reported that points could not be carried over year to year, that maintenance fees kept escalating, and that they were locked into 40-year contracts whose terms had not been adequately disclosed during the sales pitch. Attorney General Janet Mills said a “common theme” in complaints was the financial burden of those 40-year terms and rising fees.³

Tennessee: The $3 Million Settlement

The largest state settlement was announced on February 24, 2016, by Tennessee Attorney General Herbert Slatery. It named Festiva Development Group (doing business as Festiva Adventure Club), Festiva Real Estate Holdings, Festiva Sailing Vacations, Etourandtravel, Inc., and individual principals Donald K. Clayton, Herbert H. Patrick, Richard A. Hartnett, and J. Lance Croft.¹

The case alleged violations of the federal Telemarketing Act, the federal Telemarketing Sales Rule, and the Tennessee Consumer Protection Act.⁴ Of the $3 million total, $1.25 million went to cash restitution, up to $1 million was set aside for loan forgiveness for Tennesseans who had financed their purchases, and $750,000 was paid to the state. Eligible consumers could have their contracts cancelled and receive partial refunds.¹

Maine: Contract Reductions for 800+ Consumers

Maine’s Attorney General sued eight Festiva entities and two founders, Donald Clayton and Herbert Patrick Jr., in Kennebec County Superior Court in November 2013. The state alleged unfair and deceptive practices in the marketing of vacation club memberships, focused on presentations at the Rangeley Lake Resort and a Portland sales office.³⁵

Court-ordered mediation produced a settlement in October 2015, announced publicly on February 29, 2016. It covered more than 800 consumers. Festiva paid $150,000 to the state for distribution.³ Depending on the circumstances of each buyer, the settlement allowed:

Full release from the 40-year contract, or reduction of the term to 10 years.
Return of any deeded timeshare week that had been traded in to purchase a membership.
A Festiva request to credit reporting agencies to remove trade lines related to money owed to the company.
A commitment by Festiva not to sell Festiva Adventure Club memberships in Maine for three years.⁵

North Carolina, Alabama, and Missouri

North Carolina’s Department of Justice received about 200 consumer complaints about Festiva Adventure Club memberships. The state’s settlement, signed December 31, 2015, required Festiva to pay $286,144 to cover consumer refunds and state costs. Festiva was banned from face-to-face marketing in North Carolina for three years and barred from misrepresenting the nature of sales solicitations, using fictitious names implying government or trade association affiliation, or falsely claiming consumers had won prizes. The company did not admit wrongdoing.²

Alabama’s Attorney General reached an Assurance of Voluntary Compliance with Festiva Development Group in October 2014. It provided $75,000 in refunds — roughly $467 per complaint across 107 pending cases — and $25,000 to the state for costs and attorneys’ fees, and imposed marketing and disclosure requirements on any future Alabama business.⁶

The earliest known enforcement action came from Missouri Attorney General Jay Nixon, who sued Festiva Resorts in 2005 over sales practices at its Cabins at Green Mountain property in Branson. The state alleged a high-pressure environment, insufficient decision time, and false promises to help consumers resell or rent timeshares. The $339,000 settlement sent $324,000 to consumers. Buyers who had never used their timeshare could return the deed and receive part of the purchase price. Buyers who had used it at least once could deed it back for a partial refund, keep it with a small cash payment, or take a free upgrade.⁷

Beyond the five states with formal settlements, attorneys general in Florida, South Carolina, Wisconsin, and Louisiana received at least 35 additional complaints about the company.⁷

The Reeves Class Action Over Orlando Points Cuts

The largest private case arose from Festiva’s acquisition of the Celebration World Resort in Kissimmee, Florida, which was renamed Festiva Orlando Resort. Reeves, et al. v. Zealandia Holding Company, Inc. was filed March 1, 2013, in the 9th Judicial Circuit Court in Osceola County and also proceeded in federal court as Case No. 6:13-cv-00597-28TBS.⁸

About 900 timeshare owners who had purchased Vacation Ownership Interests from B.L. Vacation Ownership, Inc. beginning in 2004 and had bought point upgrades between 2008 and 2011 alleged that after a Zealandia affiliate acquired the developer’s rights and Patton Hospitality Management took over operations, the RCI Points allocated to their accounts were reduced by at least 25,000 points in 2013. Owners said this violated the resort’s declaration of covenants, breached fiduciary duty, and violated Section 721.18(5) of Florida’s timeshare law.⁸ The Finn Law Group, P.A. was appointed class counsel. Defendants included Zealandia, B.L. Vacation Ownership, Patton Hospitality Management, the Festiva Orlando Resort Homeowners Association, and RCI, LLC.⁹

The court granted preliminary approval on January 27, 2016. District Judge John Antoon approved the final settlement on October 25, 2016, with an effective date of December 1, 2016.¹⁰ Class members could receive:

A share of a $10,000 common fund established by B.L. Vacation Ownership, distributed proportionately to those who submitted valid claims.
One to three seven-night RCI travel credits, tiered by how many RCI Points the owner had lost in 2013.
Either vacation certificates for one-week stays at Patton Hospitality-managed resorts, or a deedback of the timeshare interest to Zealandia to end future maintenance fees and other obligations. The deedback option was not available to owners who had exchanged their Vacation Ownership Interest for a Festiva Adventure Club membership.⁹

Class counsel sought up to $420,000 in fees and expenses, and each named plaintiff sought a $1,000 contribution award, separate from class member benefits.⁹

Louisiana: Cooper v. Festiva Resorts

A separate case, Angela Cooper, et al. v. Festiva Resorts, LLC, and Festiva Development Group, LLC, went through the Louisiana courts. Plaintiffs alleged high-pressure tactics, coerced signatures without disclosure of terms like bylaws and costs, and failure to deliver the promised property access and amenities. They sought rescission, return of funds, compensatory and treble damages, attorneys’ fees, and reversal of negative credit reports.¹¹

A trial judge dismissed the case on procedural grounds in September 2014. On June 3, 2015, the Louisiana Fourth Circuit Court of Appeal reversed, finding that the plaintiffs shared a sufficient “community of interest” to proceed together, and sent the case back to the trial court.¹¹

Where Festiva Stands Now

Zealandia Holding Company continues to operate from Asheville, North Carolina, though its business has shifted away from the Festiva brand. The Festiva Adventure Club website remains active with its network of resort properties, and the company has converted portions of the Festiva Orlando Resort from timeshare use to apartments.¹² The settlement claim windows described above were tied to each case’s specific procedures; if you believe you were an affected member of the Tennessee, Maine, North Carolina, Alabama, Missouri, or Reeves classes, the relevant state attorney general’s office or class counsel of record is the starting point for confirming your status.

1
Tennessee Attorney General. AG Announces Settlement With Festiva
2
Citizen-Times. Local Travel Company to Pay Refunds in Deal With State
3
Portland Press Herald. Maine Customers of Festiva Vacation Club Offered Lawsuit Settlement Deal
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Tennessee Bar Association. Festiva Settlement Announcement
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Maine Attorney General. Consumers Notified of Festiva Settlement
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Alabama Attorney General. AG Announces Settlement With Timeshare Travel Club
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ABC7 News. Festiva Resorts Complaints
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Big Class Action. Festiva Timeshare Upgrades Class Action Lawsuit
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Finn Law Group. Class Notice – Reeves v. Zealandia
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Finn Law Group. Festiva Class Action Settlement
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FindLaw. Cooper v. Festiva Resorts
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Resort Trades. Colebrook Increases Loan to Festiva Resorts