Grand Resort Properties Files For Chapter 11 Bankruptcy

By: Destination Club News
Date: January 19, 2010

Grand Resort Properties, a small destination club based out of Omaha, has filed for Chapter 11 bankruptcy. By the end of 2007, Grand Resort Properties had roughly 35 equity members, but increasing competition from the larger clubs in the sector and the economic downturn of the past two years have apparently crippled the club.

"Our company was founded in the Midwest and many of the positive attributes of this region are part of the fabric of the company," said CEO Brad Brown to our friends at SherpaReport early in the club's history. This Midwestern philosophy would trickle down to the club's property acquisitions as Grand Resort Properties would acquire residences in destinations drivable for their core base of members, including Dahlonega, Georgia and Lake of the Ozarks, Missouri. Joining these more unique destinations would be a collection of destination club mainstays such as Cabo San Lucas, Scottsdale, and Steamboat Springs.

Unlike other destination clubs, Grand Resort Properties also rented out nights to non-members and included luxury yacht travel as a pillar in their club structure.

We have reached out to several of our contacts within the club for more information about the bankruptcy filing and hope to receive more information soon. If history is a guide, destination clubs that have reached the Chapter 11 bankruptcy phase have yet to reemerge within the industry. Tanner & Haley and The LUSSO Collection both filed for Chapter 11 for various reasons, and neither were able to successfully restructure their ailing clubs. Tanner & Haley would eventually be acquired by Ultimate Resort and The LUSSO Collection would eventually transition to Chapter 7.

Likely only three potential options remain for the club and its members.

• Restructure: The club reorganizes the club to better cover costs, likely with higher annual dues and fees to members and/or a reduction in club costs, including properties, services, and executive expenses.
• Acquisition By Another Club: With members at a premium, other destination clubs may pursue the club's members through special membership term or an acquisition of the club's residences.
• Chapter 7 Bankruptcy: If the club unable to reorganize their organization or find a buyer, Grand Resort Properties may ultimately file for Chapter 7 bankruptcy.

Check back in the near future to learn more about the Grand Resort Properties Chapter 11 filing and to track how the club will proceed.