In another sign of how hard the economy is hitting destination clubs, the boutique club Lusso just filed Chapter 11 today.
The petition for reorganization under Chapter 11 was filed at the Bankruptcy Court for the District of Minnesota, and includes all of the property holding subsidiaries of Lusso.
The club is continuing to operate and members of the destination club may continue to utilize the luxury home properties during the reorganization.
In a short press release the club noted:
"The current national financial crisis has resulted in a precipitous drop in new member enrollments and a significant contraction in the availability of debt financing, which has affected the clubs ability to acquire new properties and service existing obligations."
The club is looking at all its strategic options. It has recently laid off most of its marketing and sales staff, but has retained all the local concierges and member services employees, so that member travel is unaffected. The club had been communicating with its members who were the first to know about this restructuring.
The severity of the current recession has tripped up several clubs. High Country Club has been restructuring and has reduced the number of homes in its portfolio. Botiga is more fortunate and is still in its launch phase, so just delayed the date of acquisition of its first properties and is looking to benefit from lower luxury property prices.
