Parallel
Resignation and Redemption

"If a Member elects to leave Parallel, 100 percent of the deposit is refundable."

The short and sweet resignation policy published by Parallel was capable due to the club's financial focus and real estate acquisition model.

"Parallel achieves this return by investing 100 percent of the membership deposit towards club development efforts which primarily include the acquisition of real estate assets. Our commitment is to return deposits on a three-in one-out relationship."

"The significance of this approach should not be overlooked or underestimated when evaluating the stability and solvency of a non-equity destination club—and Parallel is uniquely positioned in the marketplace to assure a member return of deposit."

"It is important to understand the dynamics between Parallel owning a complete portfolio of residences and any other club simply managing assets as an occupancy and financial panacea. Many clubs add residences at a lower cost into a portfolio by renting rather than owning them and then using membership deposits to offset operating expenses. This practice comes at the expense of long-term sustainability and member satisfaction."

This financial diligence helped to establish Parallel as one of the leaders in the destination club industry and a founding member of the Destination Club Association, the industry's regulation committee.

By the end of 2006, Parallel's Tim Wolff and Solstice's Graham Kos had been introduced by a mutual friend and saw the benefits of a merger of their two respective clubs. In November, Solstice and Parallel merged. "The new Solstice marries Solstice’s growing collection of remarkable homes with Parallel’s best-in-class services, resulting in a member experience unmatched by any club model, or for that matter, outright ownership," the club wrote. "Further, Solstice continues its commitment to provide the highest standards of financial transparency to its members, and now introduces, for the first time in the industry, a choice between two deposit reimbursement models based upon each participant’s financial goals."

These two choices would allow members the opportunity to either receive 100% of their original membership deposit refunded to them when they resigned, as was the structure of Parallel, or receive 80% of the future value of their membership, potentially returning more than the members originally paid in.

In the latter, the club would average the sale prices of the last four memberships sold and debit a 20% transfer fee to resigning members. In this type of resignation structure, members are rewarded for joining the club early, prior to price increases instituted later in the club's existence.

The club would prove to be one of the more successful clubs in the industry throughout 2007 when Graham Kos and a group of outside investors would purchase a controlling interest in the club. With Kos again acting as CEO, he would say "The vision of Solstice has not changed. With our core membership service and home acquisition teams still in place following the restructuring, Solstice members will continue to see positive changes in the high level of service and great access to a growing portfolio of the finest homes around the world."

The new leadership team was quickly greeted with the sharp declines in the real estate and financial markets. With new membership sales coming to a halt like many other destination clubs, Solstice was eventually filed for Chapter 11 bankruptcy in early 2009.