Tanner & Haley Files For Bankruptcy

By: Destination Club News
Date: July 24, 2006

Industry titan, Tanner & Haley, widely known as the creator of the destination club concept, has filed for Chapter 11 protection in Connecticut's bankruptcy court today. As the industry's first mover, several of the club's business components contributed to the bankruptcy according to Holly Felder Etlin, the Tanner & Haley Chief Restructuring Officer. In this newly created position, she will work alongside the company's existing executive team to oversee the day-to-day operations and assist in the attempt to reestablish Tanner & Haley as a player in the destination club sector.

"As part of the Chapter 11 process, we will be reviewing and, where appropriate, revising Tanner & Haley's business model so that, upon completion of the financial reorganization, the company will be better positioned to achieve long-term strength, stability, profitability and growth," said Ms. Etlin. "We are also committed to having the company emerge from the process with greatly enhanced corporate governance and financial transparency."

The business model that Etlin and the Tanner & Haley team will review will need to be radically altered for their goals to be accomplished. Due to a property guarantee provision that required Tanner & Haley to provide accommodations outside the club to members if the club's properties in that area were already in use, the club has been forced to enter into "costly short-term" leases to meet availability requirement needs. In addition, due to their rapid growth early in the club's history, many members secured their memberships with low up-front costs, annual dues, and nightly fees, none of which has been able to sufficiently cover the club's operational costs. The bankruptcy also cited the lack of any material revenues from other arms of the Tanner & Haley offering that included a luxury car rental service and wine sales amongst others, and an ever increasing level of competition within the destination club industry.

Clubs like Exclusive Resorts, Private Escapes, and others have increasingly attracted members to their respective clubs, building market share while Tanner & Haley has eroded their early market dominance through their high annual overhead. It will be the tasks of executives throughout the destination club space to reassure their respective members and potential members by outlining the differences between their own unique structures and that of Tanner & Haley.

"We deeply regret any impact the Chapter 11 filing may have on our Members and other creditors," said Rob McGrath, the club's Founder. "Now, as always, we appreciate the interest and support of our Members, employees, vendors and other business partners. Together, we hope to position the company for continued leadership in the hospitality industry for many years to come."

Headquartered in Westport, Connecticut, Tanner & Haley has three unique clubs, Private Retreats, Distinctive Retreats, and Legendary Retreats. All three are fully owned under the Complete Retreats, LLC. Each of the three clubs have their own collection of properties and members. Between all three clubs, 874 members total members joined, including 349 from Private Retreats, 510 from Distinctive Retreats, and 15 from the club's newest venture, Legendary Retreats.

Members can access a password protected portion of the website to learn more about the future of the club, but check back frequently here for ongoing news about today's filing.