High Country Club has followed hot on the heels of Quintess‘ audit report with a notification letter of its own, including the results of its net asset test.

CEO Christian Kirschner shared their methodology for conducting a net asset test - assets were determined by adding cash, marketable securities and real estate assets (at cost if recently acquired, or as per current appraisal), and liabilities were determined by adding refundable membership deposit obligations to the debt secured against the property portfolio. The good news for club and members? The assets exceed the liabilities. Rearranging the equation shows us that selling all properties and honoring all real estate debt would leave enough cash to provide membership deposit refunds.

High Country Club property at Steamboat Springs, Colorado

Without more detail on the breakdown of the assets all we really know is that High Country Club can meet its membership deposit obligations if it liquidates its entire portfolio (and obtains at least the expected sale prices). It may be that less dramatic action could be an option, but we can’t tell from the information revealed.

Incidentally, the formula used does not seem to account for corporate debt. Without knowing the details of the structure used to determine the hierarchy of creditors, it’s not possible to say whether this represents a degree of risk for members.

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