Destination clubs Quintess, A&K Residence Club and Equity Estates have all made offers to Lusso members.
Lusso filed for chapter 11 bankruptcy in December and ended all travel operations earlier this month when it also converted to a Chapter 7 bankruptcy. In the meantime the clubs members have been presented with four offers.Lusso Offer
The first of these was from Lusso itself, which proposed operating a slimmed down version of the club. Under this option the members would have needed to put in additional capital and the club would have had sixteen properties in fourteen destinations. In addition the current club management had agreed to step aside. The Lusso members rejected this option.Quintess Offer
For a very low initial fee, plus an agreement to pay over to Quintess any proceeds they receive from the Lusso bankruptcy, the Lusso members can join Quintess, LRW. The Lusso members are then treated just like other Quintess members although holiday access is only available on a space available basis.
If they stay with Quintess for at least four years before resigning, the members will receive 75% of the membership deposit that they paid on joining Lusso.
Todd Miller at Quintess told me that 40+ Lusso members have so far signed up. Ben Addoms, EVP and Founder of Quintess, had said in January that the club was planning to reduce its home portfolio by about 15%, but, with this influx of new dues paying members the club will be able to keep more of the club homes.A&K Residence Club Offer
Lusso members can sign up for a three year trial membership of A&K Residence Club on either a 21 night or a 30 night per year plan. Lusso members would pay annual dues of $29,950 for 21 nights and $39,950 for 30 nights. At any time during this three year period members could convert to being full equity members of A&K for a discount off the current membership rates. The discount varies from $30,000 to $95,000 depending on which plan level the Lusso member joins, and whether they were a 21 or 30 night trial member. Alternatively, at the end of the three years A&K will provide a resignation benefit of $25,000 for those on a 21 night plan, or $35,000 for those on a 30 night plan.Equity Estates Offer
For an annual fee and no initial payment, members can join Equity Estates at their "Executive Membership" (15 nights a year,) level. Equity Estates has offered to finance the $187,500 equity buy-in for this share and has built repayment of this into the annual fee. So the annual fee covers two obligations, repayment of this loan for the investment cost and the regular annual dues. The loan carries an interest rate of 6% and will be a fully amortizing and will be non-recourse to the member.
The full details of the offers have been heavily discussed on destinationclubforums.com, where the court documents detailing the offers are also available. These are all interesting offers in their own right, and the variety of the offers shows the value that the clubs place on having new dues paying members who know and like the destination club experience.