As previously announced, Bluegreen Vacations Corporation (NYSE:BXG) and its subsidiaries (collectively referred to as Bluegreen) received a formal notice from Big Cedar L.L.C, Bass Pro, Inc., Bass Pro Outdoor World, L.L.C and other affiliates (collectively referred to as Bass Pro) notifying Bluegreen that Bass Pro intended to cancel the Company’s access to the Bass Pro marketing channels and advertising materials as of April 19, 2019 unless the Company cured certain alleged breaches.
Pursuant to the terms of the parties’ agreement, Bluegreen was to be provided with a “period of at least 30 days to respond and cure” and further, that any timely cure proposed would be subject to the approval of Bass Pro “which shall not be unreasonably withheld.”
Bluegreen responded to Bass Pro’s notice on April 17, 2019. The response set forth Bluegreen’s position on the issues raised and offered $1,853,104.00 with respect to monetary issues with a reservation of rights. We also reminded Bass Pro that the marketing agreement provides that Bluegreen is entitled to conduct business within the Bass Pro Cabela’s stores. If no resolution is reached and Bass Pro proceeds with its cancellation of Bluegreen’s access to the Bass Pro marketing channels, Bluegreen intends to seek damages from Bass Pro in excess of $300 million for breach of contract, willful misconduct and lack of good faith.
In our response letter to Bass Pro we wrote, “To be clear, we don’t agree with any of the defaults you have alleged. We continue to be willing for the parties to engage in third-party binding arbitration or, if it comes to that, rely on litigation to resolve the specific issues at hand…In my view, parties acting in good faith would avail themselves of a third party independent decision maker instead of threatening to deny us access to the Bass Pro stores…” This has been our position for the 18 months that we have been dealing with claims for additional amounts raised by Bass Pro, including the $1,853,104 Bluegreen has offered and the $4.8 million we paid under protest in an attempt to resolve these issues. We continue to believe that third-party involvement is an appropriate and welcome way for the parties acting in good faith to resolve their issues.
However, subsequent to our letter and prior to the expiration of the cure period, we learned that Bass Pro filed an action in federal court related to the outstanding issues between the parties. Bringing a lawsuit prior to the expiration of the cure period was not appropriate and, if the matter is not successfully resolved, will be an independent and additional breach of the agreement by Bass Pro. We do recognize, however, that calling upon the court to resolve the dispute would expose Bass Pro’s claims to review by an independent third-party and resolve with finality the issues between the parties. We believe that if Bass Pro’s claims were established – which we believe unlikely – the amount of Bluegreen’s exposure relating to the monetary issues raised by Bass Pro pursuant to the agreement would be less than $20 million.
In Bass Pro’s enthusiasm to renegotiate our long-term agreement, Bass Pro has also raised an issue regarding our customer service, a position that is demonstrably untrue. Bluegreen is very focused on customer service and would note that Bluegreen currently has an A+ Better Business Bureau rating and a 4.3 out of 5.0 Google online rating and we are averaging only 3 complaints per Bass Pro store on an annual basis while more than 60 million customers pass by our kiosks.
Subsequent to our learning of the filing of the lawsuit, we received a letter from Bass Pro dated April 18, extending the time frame to cure to April 27 “To allow time for further review and good faith discussion…”
As we have said previously, we remain optimistic that the outstanding issues will be resolved and look forward to the good faith discussions promised by Bass Pro.
About Bluegreen Vacations Corporation Bluegreen Vacations Corporation (NYSE: BXG) is a leading vacation ownership company that markets and sells vacation ownership interests (VOIs) and manages resorts in top leisure and urban destinations. The Bluegreen Vacation Club is a flexible, points-based, deeded vacation ownership plan with approximately 216,000 owners, 69 Club and Club Associate Resorts and access to more than 11,000 other hotels and resorts through partnerships and exchange networks as of December 31, 2018. Bluegreen Vacations also offers a portfolio of comprehensive, fee-based resort management, financial, and sales and marketing services, to or on behalf of third parties. Bluegreen is approximately 90% owned by BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB), a diversified holding company. For further information, visit www.BluegreenVacations.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. All opinions, forecasts, projections, future plans or other statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements may be identified by the use of words or phrases such as “plans,” “believes,” “will,” “expects,” “anticipates,” “intends,” “estimates,” “our view,” “we see,” “would” and words and phrases of similar import. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, those relating to the risks associated with the Company’s relationship with Bass Pro, that the parties will not reach a resolution of the outstanding issues and that the Company will not have access to the Bass Pro marketing channels and advertising materials going forward; that the Company’s results will be adversely impacted by the termination of the relationship or ongoing litigation regarding the obligations of the parties under the parties’ agreements and that the Company may not be successful in recovering the damages it seeks. Reference is also made to the risks and uncertainties regarding the businesses, operations and trading markets of Bluegreen which are detailed in reports filed by Bluegreen with the SEC, including the “Risk Factors” sections thereof, and may be viewed on the SEC’s website at www.sec.gov Bluegreen cautions that the foregoing factors are not exclusive.