A bankruptcy-law filing by companies started by the pioneer of luxury “destination clubs,” which sell members an array of annual vacation choices at exclusive hideaways, is sending shudders through the largely unregulated business.
The troubles at Tanner & Haley Resorts, based in Westport, Conn., reveal potential pitfalls for consumers of these high-end hybrids between time-shares and country clubs that have proliferated in recent years.
The companies filed for Chapter 11 protection from creditors early in the past week, leaving the refundable membership deposits of its 874 members in doubt. Tanner & Haley founder Rob McGrath, a former Wall Street securities trader and onetime pro skier, launched the high- end resort niche in 1998. Now Tanner & Haley says parts of its business model are problematic.
Tanner & Haley remains in operation and says it intends “to continue to meet substantially all travel commitments previously made.” But it has stopped returning members’ deposits, at least until its bankruptcy proceeding is resolved. Each member paid deposits totaling hundreds of thousands of dollars, annual fees that can total tens of thousands of dollars and daily usage fees that top $100.
