For a busy executive like weatherman Paul Douglas, vacation means exploring the world with the comforts of home but none of the hassles of home ownership.

That's why last April he paid a six-figure sum to join the Lusso Collection, a destination club that offers most of its members unlimited access to dozens of multimillion-dollar getaway homes around the world.

The attraction? An on-site concierge, a fridge stocked with his family's favorite food, and none of the financial worries that come with owning a second home. During a recent stay at the club's penthouse overlooking Times Square in New York, for example, the concierge helped Douglas arrange for tickets to a taping of "Saturday Night Live."

"The notion of exploring new places and not being stuck in one spot really appealed to us," said Douglas, the former local TV meteorologist. "The time you have set aside for family, you want it be special and decrease the potential for disaster."

Now, less than a year after he bought into the Eden Prairie-based club, a gray cloud hangs over Douglas' next vacation.

The Lusso Collection recently filed for Chapter 11 bankruptcy protection, leaving Douglas, who writes a regular column for the Star Tribune, and more than 150 well-heeled members and investors across the country wondering what's next.

Lusso isn't the only high-end destination club or private resort to succumb to the sagging economy and the eroding real estate market. Several recently have closed, consolidated or reduced services as membership sales have fallen and their business models have been turned upside down by plunging real estate values.

The club's troubles are yet another sign that even savvy, wealthy investors aren't immune to the market slowdown. The club's creditors include Randy McKay, a former executive with Frauenshuh Companies, a Twin Cities-based real estate investment company, who invested more than $10 million in the club; the head of a multibillion-dollar Boston-based real estate investment trust; Bruce Paradis, CEO of ResCap, a Twin Cities-based mortgage finance company; and Life Time Fitness CEO Bahram Akradi.

Lusso's founder, Steve Greer, said that the club's operations have gone on uninterrupted. He expects a restructuring plan to be filed by the end of the month.

"We are examining all strategic opportunities at this time," Greer said. "I can say with certainty that the strategic future of the club will be based on what is best for members and creditors."

Greer, a former chief financial and operating officer of Rapala, the Finnish fishing lure company, said that his decision to start his own destination club was reinforced by his experiences as a traveler. Once he started vacationing with a toddler, he discovered the hassles of trying to comfortably outfit a hotel with necessities such as a crib and a diaper pail. Even expensive hotels often had cramped quarters and amenities suited more to business travelers than to families.

So in 2006, Greer gathered a group of investors to begin buying properties. One of the club's early members, Scott Jagodzinski, a director at Eden Prairie-based JobDig Inc., said that he joined the club so he could vacation without leaving the creature comforts he enjoys at home.

The club or its related limited liability companies paid an average of more than $3 million for each of the vacation properties. Members bought a share of the club but didn't have ownership in the properties themselves.

Early members paid $350,000 for what was supposed to be a refundable deposit, plus annual dues of $25,000. When the club filed for bankruptcy protection in December, the deposit had increased to $425,000, with fees set at $28,000.

Sales exceeded expectations

Greer said membership sales exceeded sales projections when the club began. But trouble already was brewing at one of its competitors. In July 2006, Tanner & Haley, one of the nation's largest destination clubs, filed for Chapter 11 protection. And just a year later the housing and credit markets began to unravel.

As members of Tanner & Haley were wondering what would become of their investment -- some had paid as much as $1.3 million to join -- Greer was acquiring more properties. He touted the Lusso business model, which differed from Tanner & Haley's by offering members unlimited access to its properties.

In a letter to members shortly after Tanner & Haley filed for bankruptcy, Greer reassured members and investors that the Lusso model and operating philosophy positioned Lusso "for long-term success in the destination club industry" in large part because Lusso owns its properties. Greer also said that Lusso was unique because of its unusually low ratio of members to properties. The company's membership agreement said that its ultimate goal was to have 550 members and 100 properties.

By July 30 of last year, Lusso had sold more than 150 memberships and had just acquired its 30th property. But by then, dark skies already loomed over the economy. The company launched a campaign aimed at increasing its membership by offering 50 memberships at a discount. That program offered members just three weeks at its vacation properties for a reduced deposit of $325,000 and annual dues of $21,000. Lusso set a goal of having 39 properties in 21 destinations by the end of the year.

Expanded to Europe

In September, Lusso expanded into Europe with its 31st property, La Ripa, a 500-year-old Italian farmhouse with beamed ceilings on 27 rolling acres studded with olive groves and cypress trees in Tuscany.

Just three months after announcing the acquisition of that $5 million villa, the company said it was filing for bankruptcy protection.

Greer attributes the company's troubles to what he calls "unprecedented economic times."

"Three of the ingredients in our business are access to capital, real estate market conditions and values, and consumer confidence," Greer said. "Each played a part in what led us to the filing."

Greer said that the company has stopped selling memberships -- there are now 155 -- until the restructuring plan is finalized. He said that Lusso members "have been extremely satisfied with the club." Before the filing, he said, only one member had requested a refund. Since the filing, however, several members submitted resignation letters and remain listed as unsecured creditors in the bankruptcy filing.

"These were largely acknowledged as a precautionary measure by members who believed that there was some [economic] benefit to having their name on the resignation list earlier," Greer said. "When we explained to the members that it was irrelevant in a Chapter 11 or Chapter 7 bankruptcy whether their name was on the resignation list or not, members stopped submitting resignations."

Jim Pippin, managing director of the Veras Club, a destination club adviser based in Colorado, said Lusso stood out among the competition because of its compelling set of services and benefits, but it suffered from bad timing.

"It's the same cause of so much financial hardship in the U.S. right now," Pippin said. "In boom times, the model would have grown and been sustainable for the long run. Their fatal flaw, if there is one, is that they didn't predict the future."

Although Lusso has hired the Manchester Companies to help with its restructuring efforts, Pippin said it's still unclear what will happen to club members and investors. In its bankruptcy filing, the company listed assets and liabilities of $50 million to $100 million. Pippin said that while Tanner & Haley's original members still await resolution of their claims, Lusso has several options, including a sale to another company.

"The marketplace is such that people who have capital are looking for deals and they're finding them," Pippin said. "This could be a very good deal."

If that happens, Lusso members could find themselves with fewer benefits and new membership terms. Lusso already has trimmed perks, including vehicles for member use, complimentary airport transfers and housekeeping services. And the company has abandoned plans to buy properties in Naples, Fla., and Cabo San Lucas, Mexico.

Meanwhile, Douglas remains optimistic. He's already booked time at a Lusso property in La Jolla, Calif., to celebrate a sister's birthday, and in Scottsdale, Ariz., where he plans to study the region's weather patterns.

"We believe in the vision, and I'm hopeful and confident that they'll find a way to reorganize and keep this thing going," Douglas said. "It would be a real shame if it fell by the wayside, because it really is just a fabulous company."

Jim Buchta • 612-673-7376