As we reported earlier this month, Ultimate Resort acquired the assets (in this case, homes) of bankrupt Tanner & Haley for $100 million. Ultimate Resort now takes ownership of about 60 of Tanner & Haley’s residences and hopes to convert several hundred of the destination club’s members.

In a final push to recruit the members, Ultimate Resort recently emailed an offer letter to all 874 former Tanner & Haley members. In an exclusive interview with Helium Report, Jim Tousignant, founder and CEO of Ultimate Resort, expressed confidence that most of the memebers will join the new club.

Details of the Ultimate Resort Offer

Ultimate Resort is offering Tanner & Haley members a Lifetime Membership in Ultimate Resort with no initial membership fee. Tanner & Haley members have until December 22, 2006 to accept or decline the offer.

Tanner & Haley membership levels will translate over to comparable Ultimate Resort levels, as explained below:

• Tanner & Haley Private Retreats members will become Ultimate Resort Bronze Members, which includes 14 days and has annual dues of $10,000.
• Tanner & Haley Distinctive Retreats members will become Ultimate Resort Elite Bronze Members, which includes 14 days and has annual dues of $15,000.
• Tanner & Haley Legendary Retreats members will become Ultimate Resort Elite Platinum Members, which includes 42 days and has annual dues of $30,000.

Ultimate Resort Membership Upgrades

Ultimate Resort is also offering Tanner & Haley members the following membership upgrade credits:

• Private Retreats Members will receive a $35,000 credit toward any plan upgrade.
• Distinctive Retreats Members will receive a $70,000 credit toward any plan upgrade.
• Legendary Retreats Members will receive a $150,000 credit toward any plan upgrade or the purchase of additional memberships or additional travel days.

Membership Redemption

Tanner & Haley members who join Ultimate Resort and remain in good standing for at least five years will be allowed to cancel their membership and redeem their deposit on a “three-in, one-out” basis. In other words, three new members must join the club before you are allowed to leave. The deposit redemption amounts are as follows:

• After 5 years of membership, 60% of the then current membership fee
• After 6 years of membership, 70% of the then current membership fee
• After 7 years of membership, 80% of the then current membership fee

From our vantage point, Tanner & Haley’s 874 members have three options. Members can accept Ultimate Resort’s offer to join their club and select a new plan that fits their travel needs. This would require no new capital commitment, and based on the offer, they have a chance of being able to get most of their deposit back if they stay on as members. Frankly, we think it’s a good offer. Or, they can decline the offer and most likely walk away empty-handed since Tanner & Haley declared bankruptcy with nearly $300 million in liabilities.

The third option, requiring a new capital outlay, is to decline Ultimate Resort’s offer and join another destination club such as Exclusive Resorts, Quintess or Private Escapes. These three leading clubs are Ultimate Resort’s primary competition in the luxury category; membership deposits range from $200,000 to $500,000 and all three clubs have more than 300 members. Request our guide to learn more about the differences between key players.