High Country Club

Few destination clubs have enjoyed such meteoric rises and such colossal falls as High Country Club.

The self proclaimed "destination club for everyone" launched in September of 2005. Founded by Christian Kirschner, a licensed real estate broker in Colorado, the vision for the club was for people like himself to be able to enjoy the destination club experience.

"When we looked at the types of destination travel clubs around, we realized there was a whole group of people being underserved," said Kirschner. "People just like us who want to visit luxury locations, stay in luxury accommodations and not pay a luxury price for it. We offer virtually the same types of properties, amenities and conveniences that other, more expensive clubs offer but at a significantly lower price."

As implied by Kirschner, the primary competitve advantage were membership deposits and annual dues that were but a fraction of thier competitors. The club's public introductory Affiliate Membership deposit started at $15,000, less than other club's annual dues. The club also offered financing, using the club's Private Membership as an example. "For money that's being spent on just one vacation, you could afford ten or more. In fact, for as little as $90/month, you could be financing your one-time $20,000 Private Membership fee."

Based on the club's exceptionally low cost structure, coupled with an equity membership option that allowed members the opportunity to redeem their membership at the future value of the membership, and the club quickly established themselves as a player in the industry.

Within ten months in July of 2006, High Country Club had already surpassed the 100 member mark, just a month off the pace that Exclusive Resorts had set for their first 100 members years earlier. Six months later, the club had reached the 200 member plateau.

With membership soaring, the fiscal responsibilities required of a club with such thin margins quickly flew out the window. Homes were largeley financed, the club reached at properties outside the model's price range, annual dues never approached the carrying costs for the properties, and executives began to drastically increase their salaries.

Despite the problems with the club model, the club continued to see success until the summer of 2008. As real estate prices and the stock market began to stumble, the flaws in the destination club model that had remained behind the curtain were quickly brought to the forefront.

In a letter to members, Kirschner wrote "The economy has and continues to negatively affect the prospects for High Country Club and the way we are able to operate. Since the beginning of 2008, we have seen our ability to raise capital become increasingly difficult, our investor sources have not come through, the ability to obtain credit is not available and consumer confidence has deteriorated. At the end of 2007, our net asset test showed that the net assets of the business exceeded the amount of our member refundable deposit obligations. During 2008, we have seen significant decreases in our property values versus our 2007 appraisals, which means the equity in our portfolio has greatly diminished over the past 10 month period. Membership sales have declined since the beginning of 2008 because of consumer fears, and with the economic events of the past 60 days, new sales have become next to impossible."

During the course of the economic crisis, High Country Club aggressively pursued a merger/acquistion. "I approached several destination clubs and we made a decision to move forward with one," said Kirschner. Just weeks before Kirschner's letter to members, the deal was terminated due to the strains of the economy.

With a merger out of the picture, High Country Club was forced to drastically reorganize their business and attempted to sell off a substantial portion of their property portfolio, relieved the vast majority of the club's employees, and drastically increased prices. The new membership model never gained the support it needed from members and the club was forced into bankruptcy.

With nearly 400 members left without a club and with little chance of receiving any of their membership deposit back, several high profile clubs including Ultimate Escapes and Distinctive Holiday Homes made strong pushes to bring in the castoff members. Paragon Destinations, created by a former High Country Club member, also emerged looking to fill the gap left by High Country Club at the value level as The Phoenix Club would also be created out of the ashes with their own vision for the remnants of the former High Country Club.

NEWS

Once one of the fastest growing destination clubs in the world, High Country Club would be forced into bankruptcy early in 2009, citing insufficient annual dues and fees, a poor credit market, and declining consumer demand.

Launched as the world's first affordable destination club, High Country Club would quickly surpass the 100 member mark as a result of their low price point and would ultimately reach 375 members.

When the real estate and financial markets began their decline in 2008, the strength that the club had amassed during their early years quickly eroded. Forced to drastically restructure their organization, the vast majority of the club's staff was let go and significant dues increases were laid out to members, combined with sizeable reductions in the club's inventory of vacation homes. Members elected not to move forward with the restructuring laid out by the club and in early 2009, the club filed for Chapter 7 bankruptcy.

2009 Destination Club Review
Date: January 1, 2010
Arguably the most influential year in the history of the destination club industry, 2009 has come to its end and 2010 begins with far greater hopes than one year prior. Learn more about all of the positive and negative news that took place during a long 2009 in the destination club sector.

The Claims of Destination Clubs
Date: December 19, 2009
In an increasingly competitive market, some destination clubs have added their own "marketing spin" to make themselves compare favorably to others in the sector. Read more to learn who claims to be the second largest destination club and who has the best homes, prices, and services in the industry.

Lessons Learned From Failed Destination Clubs
Date: December 5, 2009
Over the past year, several leading destination clubs have filed for bankruptcy and ceased operations, leading to a drastic restructuring of the industry. Despite these failures, what elements can today's destination clubs take from yesterday's generation?

The Phoenix Club Responds To Kirschner Management Claim
Date: October 26, 2009
From the light-hearted side, after a fraudulent e-mail was sent to former members of High Country Club claiming that the new Phoenix Club had recruited Christian and Heath Kirschner, the young club responds by denouncing the claims as "a hoax and/or a joke."

Phoenix Club Gauges Interest In New Destination Club
Date: September 15, 2009
Less than a month after their introduction to High Country Club members, the Phoenix Club is reaching out to the collected 375 members, looking to gauge the interest level in their new destination club and providing additional insight into their structure and the driving force behind the club.

Phoenix Club Introduced To High Country Club Members
Date: August 18, 2009
A group of members and creditors are looking to "reorganize and reconstitute" High Country Club into a new destination club with no membership deposit and no annual dues, emerging from the ashes as the Phoenix Club.

ARDA President Howard Nusbaum Discusses Destination Clubs
Date: May 22, 2009
Howard Nusbaum, the President of the American Resort Development Association, speaks about his impressions of the destination club industry, including the questions he would ask if he was considering joining a club and suggestions he has for the industry's leading clubs.

Ultimate Escapes Offers High Country Club Members Dues Only Membership
Date: May 14, 2009
Ultimate Escapes is offering members of the now bankrupt High Country Club an opportunity to enjoy their club for one year through an annual dues only membership structure and letting members upgrade to full membership status at discounted market rates.

Opportunities For The Destination Club Industry
Date: April 8, 2009
With real estate values at record lows and hundreds of previous destination club members left without travel options following a string of closures within the sector, the industry's leading clubs have a surplus of opportunities available to them.

Threats To The Destination Club Industry
Date: March 24, 2009
Following a string of bankruptcies and closures throughout the industry, there are several pending threats against the destination club sector, including consumer confidence, litigation, and sharply declining real estate values.

Destination Club Financing Leader Ceases New Loans
Date: March 12, 2009
FirstAgain, the industry's leading financier for destination club memberships, has announced that they will cease new loan originations effective tomorrow and will soon removed their website as a result of the "deepening credit crisis."

Paragon Destinations Outlines Key Dates
Date: March 8, 2009
Paragon Destinations, a new destination club emerging out of the High Country Club bankruptcy, has outlined important dates regarding the launch of their "pseudo-equity" club and the memberships plans and pricing available to Charter members.

Paragon Destinations Eyes Launch
Date: February 24, 2009
With High Country Club mired in bankruptcy, a group of former members led by Jason Bindra are looking to reconstruct the club as Paragon Destinations, a new club with a vastly different structure from their predecessor.

Distinctive Holiday Homes' Nick Wood Discusses Changes in the Destination Club Industry
Date: February 3, 2009
Nick Wood, the Founder and Chief Executive Officer at Distinctive Holiday Homes, discusses his plans to acquire a collection of $1 million properties, a "pay as you go" offering for destination club refugees, and his opinions on changes needed in the industry.

Destination Clubs on the Opposite Side of the Spectrum File For Bankruptcy
Date: January 29, 2009
This week alone, the industry's leading value priced club and most expensive club have been linked to Chapter 7 bankruptcy, following a string of other club closures within the destination club sector as members at all clubs wonder if their clubs might face similar fates.

High Country Club To File For Chapter 7 Bankruptcy
Date: January 27, 2009
After months of attempting to restructure their ailing destination club, High Country Club has announced that they will file for Chapter 7 bankruptcy next week, concluding one of the most meteoric collapses in the history of the sector.

Destination Clubs Lower Costs By Pursuing Fellow Destination Club Members
Date: January 18, 2009
With a growing number of destination clubs in dire financial straits, many of their rivals are electing to market their offerings directly to the members of these struggling clubs, including the creation of new membership plans and significant price discounts.

High Country Club Offers Dues Only Membership To Rival Destination Club Members
Date: January 9, 2009
Deeply enveloped in a three month long restructuring process, High Country Club is offering members of rival destination clubs the opportunity to join their club for a year through a dues only membership structure that will conclude in March.

2008 Destination Club Review
Date: January 1, 2009
In 2008, the Dow fell over 33%, making for a rather difficult economic climate for nearly every industry, including destination clubs. Read about the failures and successes in the destination club sector over the past year.

Ultimate Escapes Releases Frequently Asked Questions To High Country Club Members
Date: November 15, 2008
A day after disclosing an offering to members of the struggling High Country Club, Ultimate Escapes has released a list of frequently asked questions to more fully describe the promotion that will allow members the ability to save up to $40,000 on an Ultimate Escapes membership.

Ultimate Escapes Makes Offer To High Country Club Members
Date: November 15, 2008
High Country Club is currently evaluating the future of their struggling club, but Ultimate Escapes has already made an offer to the club's 375 members, letting them save up to $40,000 on a membership at the world's second largest destination club.

High Country Club Delays Success Plan Following Member Vote
Date: November 13, 2008
Yesterday, members of High Country Club voted on the proposed Success Plan offered by the club. As a result of many downgraded memberships and no votes, High Country Club has delayed making a decision regarding their future and will evaluate any opportunities over the next two weeks.

Secondary Sales of High Country Club Memberships Dependent on Success Plan Results
Date: November 12, 2008
If High Country Club's Success Plan is approved by members in the coming days, the club will work under a new redemption structure where members will be able to set their own prices on their membership with the ability to sell on the open market.

High Country Club Releases Success Plan Results and Decreases Destination Club Homes
Date: November 10, 2008
Working for the past two weeks on analyzing their "Success Plan," High Country Club has released the results of the initial feedback from members. Falling just short of their 75% goal, the club is again restructuring the plan to decrease available properties and raise annual dues.

High Country Club CFO Steps Down and Changes Annual Dues Payment
Date: November 5, 2008
As part of their restructuring, High Country Club will change their annual dues payment structure, but have also relieved Chief Financial Officer Daniel Moorhead to keep the club's costs down after already laying off well over half of the club's employees.

High Country Club CEO Discusses Destination Club Merger
Date: October 28, 2008
A day after the club released a restructuring plan, High Country Club's CEO Christian Kirschner released a letter to members about why the club will not actively engage in merger and acquisition talks from other destination clubs.

High Country Club Success Plan From Christian Kirschner
Date: October 27, 2008
High Country Club CEO Christian Kirschner writes to members of his struggling destination club about their plans to make the club sustainable through these tough economic times, including an increase in annual dues, a reduction in total properties, and the discontinuation of new membership sales.

High Country Club Success Plan Questions and Answers
Date: October 27, 2008
Joining the announcement of High Country Club's Success Plan letter from Christian Kirschner, the club has released a series of questions and answers to provide members additional insight into the proposed changes to their club.

High Country Club Plans Restructuring
Date: October 27, 2008
Citing the slumping economy, sharp declines in real estate values, and consumer fears, High Country Club has crafted a plan that they hope will revive their struggling club and make the club self sustaining.

Conservation Suggestions For Destination Clubs
Date: September 29, 2008
Across multiple industries, the concept of "greening" is quickly gaining momentum. With a plethora of opportunities available to destination clubs to further this goal, here are some suggestions that could be implemented by clubs across the sector.

Destination Club Symposium Features Numerous Industry Executives
Date: April 2, 2007
The Destination Club and Private Residence Club Industry Symposium will take place later this month and will showcase a collection of some of the leading executives in the destination club sector to discuss best practices and growth of the young market.

High Country Club Plans Price Increase After First 100 Members
Date: July 20, 2006
Having reached the 100 member milestone, High Country Club will increase both their membership fees and annual dues next month. To keep up with the club's steady growth, High Country Club plans to seven new properties in the near future.

High Country Club Launches As "First Affordably Priced Destination Club"
Date: September 1, 2005
On the heels of Private Escapes and Ultimate Resort comes High Country Club, the newest club in the industry who has branded themselves as the "first affordably priced destination club." At launch, the club will focus on the Colorado region with a collection of famed ski destinations.

MEMBERSHIP PLANS

The leader in the value level destination club market prior to their bankruptcy, High Country Club offered numerous membership options.

When the club launched in September of 2005, memberships were offered as low as $15,000 with accompanying annual dues of $4,200 at the Affiliate Club level. The most expensive memberships were the Corporate and Group Memberships, both available for $30,000 to join and annual dues of $8,400 per year, both steep discounts on what other destination clubs were offering.

When the club did enter into bankruptcy, four different membership plans were available to members, ranging from $25,000 to $70,000 to join, still significant discounts compared to other destination clubs despite the price increases.

Companion Membership

High Country Club's introductory offer prior to their bankruptcy filing, the Companion Membership allowed members seven nights of annual usage. The one time $25,000 membership fee was 100% refundable within the first year and 80% refundable thereafter. Please visit our High Country Club Resignation page to learn more.

Members paid $2,100 per year in annual dues and were allowed one advanced reservation, made between 120 days and one year in advance of travel.

Like the other High Country Club Memberships, Companion members could elect to purchase a "Friends and Family Upgrade" with their membership that allowed for unaccompanied guest access, allowing friends, family, and colleagues to use their membership without the member being in residence. Members paid a non-refundable $10,000 and a 20% addition to annual dues, making the Companion Membership $35,000 to join with annual dues of $2,520 if the upgrade was added.

Associate Membership

Providing members 15 nights of annual usage, the Associate Membership was available for $40,000. Like the club's Companion Membership, Associate members could make one advanced reservation per year, between 120 days and one year in advance.

Members paid $4,300 per year in annual dues. Like other membership plans within High Country Club, members could add extended usage to their membership that would allow friends and family the ability to use their membership. Members paid a non-refundable $10,000 when joining and a 20% increase in annual dues. This made an Associate Membership with the Friends and Family Upgrade" $50,000 with annual dues of $5,160.

Affiliate Membership

Once the least expensive membership option at High Country Club, the Affliate Membership eventually became the club's second highest membership plan. Members paid a one time membership fee of $50,000 and were allowed 25 nights of annual travel. The lowest membership plan that allowed for advanced holiday travel, Affiliate members could make their holiday reservations up to six months in advance. Like the club's Associate and Private Memberships, members could make their advanced reservation between 120 days and one year in advance.

At the Affiliate Membership level, annual dues totaled $6,000 per year. Like the other High Country Club memberships, a "Family and Friends Upgrade" could be added to the membership that allowed for extended family usage. A $10,000 non-refundable fee was required on top of the $50,000 membership and annual dues were increased by 20%, moving from $6,600 to $7,920.

Private Membership

High Country Club's highest membership plan at the time of the club's bankruptcy, Private Memberships were available for $70,000. Members were allowed 35 nights of annual access and were allowed to make two advanced reservations per year, the only membership plan that had this feature. Like the Affiliate Membership, members were allotted one advanced holiday reservation per year as well.

Private members paid $9,000 per year in annual dues, and like other High Country Club membership plans, had the ability to add a "Friends and Family upgrade" to their membership. By paying a non-refundable $10,000 payment on top of their $70,000 membership and an additional 20% in annual dues, adding another $1,800 to total $10,800 annually, members could allow their friends and family members use their membership without being in residence.

To read more about the club's bankruptcy, please visit our High Country Club Documents page to read court filings and other documentation.

MEMBERSHIP PRICING

When High Country Club launched in September of 2005, the club's low entry costs were the primary marketing focus, going so far as labeling themselves as the "destination club for everyone." With membership deposits lower than some other destination club's annual dues, the club quickly grew, becoming the second fastest club to reach the 100 member mark, trailing only industry titan Exclusive Resorts.

When the club was forced into bankruptcy, four different membership plans were available to members, ranging from $25,000 to $70,000 to join, significant discounts compared to other leading destination clubs.

Companion Membership

Members were allowed to make one advanced reservation per year, between 120 days and one year in advance of travel.

Associate Membership

Like other membership plans within High Country Club, members could add extended usage to their membership that would allow friends and family the ability to use their membership. Members paid a non-refundable $10,000 when joining and a 20% increase in annual dues. This made an Associate Membership with the Friends and Family Upgrade" $50,000.

Affiliate Membership

Once the least expensive membership option at High Country Club, available for $15,000 to join, the Affliate Membership eventually became the club's second highest membership plan. Members paid a one time membership fee of $50,000 and were allowed 25 nights of annual travel. The lowest membership plan that allowed for advanced holiday travel, Affiliate members could make their holiday reservations up to six months in advance. Like the club's Associate and Private Memberships, members could make their advanced reservation between 120 days and one year in advance.

Identical to the other High Country Club memberships, a "Family and Friends Upgrade" could be added to the membership that allowed for extended family usage. A $10,000 non-refundable fee was required on top of the $50,000 membership deposit.

Private Membership

Like other High Country Club membership plans, members had the ability to add a "Friends and Family upgrade" to their membership. By paying a non-refundable $10,000 payment on top of their $70,000 membership and an additional 20% in annual dues, members could allow their friends and family members use their membership without being in residence.

ANNUAL DUES

Competing almost exclusively as the price leader in the destination club industry, High Country Club's annual dues were some of the most inexpensive in terms of both total annual costs and on a per night basis across the sector. While largely one of the factors that led to High Country Club's rapid growth, the low annual dues were also one of the many reasons that it was unable to survive.

Prior to entering into bankruptcy, High Country Club offered four different membership plans to members, each providing different levels of usage and associated annual dues.

Companion Membership

The introductory offering with the High Country Club catalogue prior to their bankruptcy filing, the Companion Membership allowed members seven nights of annual usage. Members paid $2,100 per year in annual dues and were allowed one advanced reservation, made between 120 days and one year in advance of travel.

Like the other High Country Club Memberships, Companion members could elect to purchase a "Friends and Family Upgrade" with their membership that allowed for unaccompanied guest access, allowing friends, family, and colleagues to use their membership without the member being in residence. Members paid a non-refundable $10,000 and a 20% addition to annual dues, bringing annual dues from $2,100 to $2,520 if the upgrade was added.

Associate Membership

Providing members 15 nights of annual usage, the Associate Membership annual dues were $4,300 per year. Like the club's Companion Membership, Associate members could make one advanced reservation per year, between 120 days and one year in advance.

Like other membership plans within High Country Club, members could add extended usage to their membership that would allow friends and family the ability to use their membership. Members paid a non-refundable $10,000 when joining and a 20% increase in annual dues. If added, annual dues were $5,160 per year.

Affiliate Membership

Once the least expensive membership option at High Country Club, the Affliate Membership eventually became the club's second highest membership plan. Providing 25 nights of annual travel, the Affiliate Membership was the lowest membership plan that allowed for advanced holiday travel. Members could make their holiday reservations up to six months in advance. Like the club's Associate and Private Memberships, members could make their advanced reservation between 120 days and one year in advance.

At the Affiliate Membership level, annual dues totaled $6,000 per year. Like the other High Country Club memberships, a "Family and Friends Upgrade" could be added to the membership that allowed for extended family usage. A $10,000 non-refundable fee was required and annual dues were increased by 20%, moving from $6,600 to $7,920.

Private Membership

High Country Club's highest membership plan at the time of the club's bankruptcy, Private Memberships provided 35 nights of annual access. Members were allowed to make two advanced reservations per year, the only membership plan that had this feature. Like the Affiliate Membership, members were allotted one advanced holiday reservation per year as well.

Private members paid $9,000 per year in annual dues, and like other High Country Club membership plans, had the ability to add a "Friends and Family upgrade" to their membership. By paying a non-refundable $10,000 payment and an additional 20% in annual dues, adding another $1,800 to total $10,800 annually, members could allow their friends and family members use their membership without being in residence.

PROPERTIES

Long the lost cost alternative in the destination club sector, High Country Club offered members access to properties in the $600,000 to $750,000 price range.

High Country Club was one of the fastest growing clubs in the industry, due in part to their low membership costs. Once focused exclusively on ski destinations primarily in Colorado, High Country Club continued to expand to include beach, leisure, and city properties across the US and Mexico and eventually into other international locations such as Tuscany and Costa Rica.

While the low costs were one of the club's main attractions, it also played a crucial role in High Country Club's downfall. The club started to reach on their purchase prices, buying homes outside of their price range and with little equity in the properties.

In 2008, the club's property values began to drastically decline and consumer interest came to a halt. On the brink of bankrupty, High Country Club introduced a "Success Plan" that would seek to make the club sustainable moving forward. In addition to increasing the club's annual dues to come in line with costs, the club would significantly reduce the properties available to members.

The club planned to keep 21 of their 36 properties, including:

• Villa La Estancia, Cabo San Lucas
• Luna Encantada Beach, Playa del Carmen
• Luna Encantada Penthouse, Playa del Carmen
• Settlers Creek, Keystone
• Colony Villas, Big Island
• Owl Meadows, Telluride
• Stonehaven, Breckenridge
• PGA West, La Quinta
• Aspenwood Lodge, Beaver Creek-Arrowhead
• 1600 Broadway, New York
• Antler’s at Lakota, Winter Park
• Sea Pines Plantation, Hilton Head
• Champion’s Gate, Orlando
• The Palms, Maui-Wailea
• Villa Renaissance, Turks & Caicos
• Villa La Estancia, Nuevo Vallarta
• Village Hall, Beaver Creek
• La Playa Estates, Punta Mita
• Portofino, Cancun
• Grand Sierra Lodge, Mammoth
• Reserva Conchal, Costa Rica

The 15 properties that would be removed from the High Country Club portfolo were:

• Mountain Lodge at Windwood, Breckenridge
• Stoweflake, Stowe
• Iron Horse Lodge at Northstar, Lake Tahoe
• Red Hawk, Keystone
• Eagle Ridge, Steamboat Springs
• Barrett Square Lofts, Rosemary Beach
• Terrace House, Snowmass
• Ranch, Steamboat
• Nani Lau, Maui
• Black Bear Lodge, Deer Valley
• La Costa Resort and Spa
• The Mill Club, Copper Mountain
• The Currituck Club, Outer Banks
• Villa Petrischio Merlino-1 BR, Tuscany
• Villa Petrischio Artu-2BR, Tuscany

Needing the support of roughly 75% of the members to sign off on the new club structure for the Success Plan to move forward, High Country Club was unable to achieve their goal and were soon forced to file for bankruptcy. To learn more about the filing, please access our High Country Club Documents.

USAGE

The value leader in the destination club sector, High Country Club would introduce membership plans that were less than many other club's annual dues payments.

"When we looked at the types of destination travel clubs around, we realized there was a whole group of people being underserved," said Founder and CEO Christian Kirschner. "People just like us who want to visit luxury locations, stay in luxury accommodations and not pay a luxury price for it."

This low cost option would prove exceedingly popular and High Country Club would surface as one of the fastest growing clubs in the history of the destination club industry.

Unfortunately, the club's rapid growth would play a part in their downfall. When sales began to slow in 2008 and into 2009, it became evident that the club's annual dues could not support the club. Following an extended reorganization attempt, High Country Club would file fore bankruptcy in early 2009.

At the time of their bankruptcy, High Country Club offered four different membership options, each with their own reservation abilities.

Offering up to 35 nights of annual occupancy, reservations were considered either Long-Term Reservations or Short-Term Reservations. Long-Term Reservations were considered those made from 120 days to one year in advance of the travel date with Short-Term Reservations those shorter than 120 days in advance. Based on the membership plan selected, members were able to make between one and two Long-Term Reservations.

This first come, first served usage structure is the most widely used membership option in the destination club industry.

HOLIDAY ACCESS

"When we looked at the types of destination travel clubs around, we realized there was a whole group of people being underserved – people just like us who want to visit luxury locations, stay in luxury accommodations and not pay a luxury price for it. We offer virtually the same types of properties, amenities and conveniences that other, more expensive clubs offer but at a significantly lower price. That means you can take several vacations each year to a number of highly desirable locations for the same amount of money you would have spent on one traditional 10-day vacation."

Introduced to the destination club market in 2005, High Country Club would offer membership plans that were available for less than the cost of other destination club's annual dues. As stated by Founder and CEO Christian Kirschner above, the club would strive to give members the traditional destination club experience for far less cost.

The reduced membership costs coupled with an ever expanding property portfolio would make for an enticing option and the young club would soon surpass 100 members, the second fastest club to reach that mark, trailing only industry titan Exclusive Resorts.

Unfortunately, when new membership sales began to slow in 2008 as a result of the economy, the business model used by the club was proven to be unsustainable. Without the constant influx of new membership sales, the club was unable to meet their financial obligations and were forced to restructure. Following months of reorganizing, including a planned annual dues increase and substantial reductions in the club's real estate portfolio, High Country Club would announce that continuing would be "impossible" and cancelled all member reservations before filing for bankruptcy.

At the time of the bankruptcy announcement, High Country Club offered four different membership plans, each with their own reservation rules. The two lowest membership plans only allowed for holiday travel on a space available basis. The two upper membership plans allowed for one "Long-Term Holiday Reservation" that could be made between 120 days and one year in advance.

If travel during these peak periods is of chief concern, understanding the holiday policies at your desired clubs should be an integral component in your evaluation.

MEMBERS

Once a leader in the destination club industry, High Country Club was the second fastest destination club to reach the 100 member mark, trailing only Exclusive Resorts.

The club offered numerous membership plans, all at significantly reduces rates from those charged at other clubs. The combination of low membership deposits and annual dues was wildly popular, allowing the club to repeatedly acquire dozens of members per month and cement themselves near the top of the destination club sector in terms of members and a position with the Destination Club Association, a collection of the industry's leading clubs tasked with creating best practices.

As 2008 began, the club found it to be increasingly difficult to obtain credit. When real estate values began to drop and new membership sales came to a halt, High Country Club's equity in their property portfolio quickly eroded.

Without the wellspring of new membership sales for which the club had grown accustomed, the business model collapsed upon itself and the club filed for Chapter 7 bankruptcy after several new business plans failed to correct the inevitable.

In the club's bankruptcy documents, it was shown that properties were highly leveraged, executives were taking increased salaries, and annual dues fell far short of the club's annual burn rate.

Nearly 400 members were left without a club and rivals across the industry emerged with offers for the discarded High Country Club membership base, including Ultimate Escapes and Distinctive Holiday Homes. Paragon Destinations and The Phoenix Club both were created hoping to acquire High Country Club members and to fill the void the club left at the value level of the destination club sector.

RESIGNATION

Like several other leading destination clubs, notably Quintess, High Country Club allowed members the opportunity to redeem their membership and receive 100% of their membership deposit back within their first year of membership. Following the first year, members received 80% of their membership deposit back.

Members were redeemed on a "two in, one out" basis, requiring two new members to join the club before one existing member was allowed to resign and be redeemed.

Late in 2008, citing a "drastic decline" in the club's real estate values, difficulty raising capital, and consumer fear, High Country Club planned a massive reorganization of their club. Annual dues would be increased, properties would be decreased, and the club would strive to bring their annual costs in line with their annual revenue.

While the club was restructuring their business model, the club also planned to restructure their resignation policy to make memberships more liquid.

According to the plan, members wishing to sell their membership would make their intentions known to the club that they wished to resign. The member highest on the resignation list for each of the club's membership plans would set a price they would be willing to sell their membership for, not to exceed the last publicly available price, and High Country Club would publish that price on their website. Members who were not the highest on the resignation list could continue to try to find a buyer for their membership, but did not have their desired asking price published.

Despite the fact the High Country Club Success Plan never received the requisite member support, the club did begin to use this resignation for a brief period, with the flaws in the structure immediately evident. The highest ranking Private Member with 35 nights of use wanted $65,000 for their membership. Another Private Member with 45 nights of usage wanted $27,935. All other Private Members with 35 nights of usage would have to wait for the $65,000 membership to be sold before the next highest would make it to the public website.

Soon after the creation of the Success Plan, the club filed for bankruptcy. To learn more about their filing, please access our High Country Club Documents.

EXECUTIVES

Once one of the fastest emerging players in the destination club industry, High Country Club would introduce themselves in 2005 as the "first affordably priced destination club."

"We offer virtually the same types of properties, amenities and conveniences that other, more expensive clubs offer but at a significantly lower price," said Christian Kirschner, Founder and CEO. "That means you can take several vacations each year to a number of highly desirable locations for the same amount of money you would have spent on one traditional 10-day vacation."

While clubs like Private Escapes and Ultimate Resort had launched and seen success as low cost alternatives to other clubs, High Country Club would offer membership options at a fraction of even these club's plans.

The low cost option would prove attractive and High Country Club would grow to include nearly 400 members. With hopes high for 2008 following the successes the club had seen in new membership growth, High Country Club began to purchase properties outside of their price range and reward executives with increased salaries. Unfortunately, the high hopes the destination club had laid out would be dashed by the financial and real estate markets throughout the year.

"Membership sales have declined since the beginning of 2008 because of consumers fears, and with the economic events of the past 60 days, new sales have become next to impossible," Kirschner wrote to members late in 2008. Without the continual influx of new membership sales, the business model collapsed upon itself, leaving the club members with little hope of regaining their refundable membership deposits.

During the course of a drastic restructuring effort to stabilize the club, Kirschner and High Country Club let go of nearly all of their employees, including two of his own brothers.

Below, please find the notable names from the High Country Club team.

Christian Kirschner
Chief Executive Officer

Dan Moorhead
Chief Financial Officer

Heath Kirschner
Vice President of Operations

Chris Stock
Vice President of Member Services

NOTES FROM THE CLUB

Launched in September of 2005, High Country Club quickly became a power player in the destination club industry, due largely in part to their low membership costs and rapidly growing property portfolio.

Originally conceived as a niche destination club that would focus on ski destinations, High Country Club would expand their vision, acquiring properties in city, beach, and leisure destinations across the US and eventually internationally to include locales such as Tuscany and Costa Rica.

The premium pricing and portfolio proved to be a potent combination and the club continually led the destination club industry in terms of new membership sales. With no end in sight, High Country Club began to purchase properties outside of their price range, put very little down on new property acquisitions, and greatly increased executive salaries.

As 2008 began, the club found it increasingly difficult to obtain credit as property values within their portfolio plummeted. As the economy continued its descent, CEO Christian Kirschner stated that news membership sales were "next to impossible."

With a closure all but eminant if nothing was done, the club unveiled the "High Country Club Success Plan." According to the plan, annual dues would need to be significantly increased to members, nearly half of the properties within the club would need to be closed, and the club itself would be run by a skeleton operations crew of just a handful of employees. The plan would need 75% of the High Country Club members support to move forward, but the club never approached this goal and was soon forced to file for bankruptcy.

As such, we have no Notes From The Club regarding HCC, but you might be interested in accessing our High Country Club Documents to read past newsletters and information regarding the club's bankruptcy filing or our High Country Club News page that will detail their time in the destination club sector.

PARTNERSHIPS

In early 2008, High Country Club would be one of the most popular options within the destination club industry, combining low costs with a rapidly growing collection of vacation properties available exclusively to members. By the end of the year, the club was on life support and just days away from filing for bankruptcy.

As the financial and real estate markets began their historic declines, interest in High Country Club and the rest of the destination club sector would wane. Founder and CEO Christian Kirschner would say that new membership sales were "next to impossible."

At the time of their bankruptcy, 375 members had joined the club, making High Country Club the second largest destination club bankruptcy in terms of members, trailing only industry pioneer Tanner & Haley.

As the low cost option within the sector, High Country Club offered members the ability to finance their membership for up to 30 years through an alliance with FirstAgain and JP Morgan Chase.

"Thinking about financial leverage for your one-time membership fee? High Country Club has removed the hassle through our established relationship with JP Morgan Chase, one of the leading global financial services firms in the world. Now you can finance your one-time membership fee for as little as $199.54 a month."

"For qualifying members, JP Morgan Chase will establish a home equity line of credit with a variable interest rate, which will rise or fall according to changes in the Federal Reserve Rate. While most home equity lines of credit do not generally have fixed interest rates, JP Morgan Chase also offers an option that allows you to lock in a fixed interest rate on all or a portion of your line of credit balance."

"This financing option lets you leverage your membership fee over a 10, 20 or 30 year payment period."

Outside of the financing available to members, High Country Club did not have any other notable partnerships to discuss.

Other destination clubs often partner with other travel providers to augment the vacation experience or with jet providers to ease the pre- and post-travel hassles.

PRESS RELEASES

Launched in September of 2005 with a regional focus on Colorado and specifically the luxury ski audience, High Country Club would soon expand their reach nationally with a collection of beach, leisure, and urban getaways.

Trailing only Exclusive Resorts as the fastest destination club to reach 100 members, High Country Club would also quickly surpass the 200 member mark. With such success, the club began to modify their lean financial structure, purchasing properties outside of their price range, putting little money down on their real estate acquisitions, and rewarding executives with large salaries.

As 2008 began, High Country Club began to see a decrease in new membership sales and an increased difficulty in obtaining credit. With the club's collection of vacation properties dropping drastically in value coupled with the club saying that new membership sales were "virtually impossible," bankruptcy appeared immanent.

High Country Club proposed a restructuring that would reduce the club's collection of properties and increase annual dues, striving to bring the club's costs in line with their revenue. Needing 75% of the club's members to support such a change, High Country Club fell well short of their benchmark and were forced to file for bankruptcy.

Below, please find the High Country Club press release archive. You might also be interested in visiting our High Country Club Documents page to learn more about the club's bankruptcy.

High Country Club Completes 2007 Annual Net Asset Test
Date: April 25, 2008
Like the results of their 2006 analysis, High Country Club has concluded their Net Asset Test and "confirm that the Club's assets are sufficient to meet its obligations, including the Membership Deposit Obligation."

High Country Club Announces Price Increase Effective June 1, 2008
Date: April 18, 2008
Effective June 1, High Country Club will increase the cost to join their premium destination club at all four membership levels. Depending on the plan, members will pay between $5,000 and $10,000 more in addition to increased annual dues.

High Country Club Announces Price Increase and Expands Membership Benefits
Date: November 12, 2007
Starting at the end of the month, High Country Club will increase the cost their club but will also expand the membership plans, including additional nights of annual access, friends and family usage, and customized membership plans.

High Country Club Completes 2006 Annual Net Asset Test July 11, 2007

High Country Club Raises The Bar on Services April 13, 2007

High Country Club Exceeds 200 Members January 22, 2007

High Country Club Surpasses 100 Member Milestone July 20, 2006

High Country Club Announces Equity Membership December 12, 2005

High Country Club Debuts September 1, 2005