California Fitness clients still out of pocket a year after closure

After nearly 20 years of operating in Singapore, California Fitness closed all its outlets suddenly in July last year. PHOTO: ST FILE

It has been a year since gym chain California Fitness suddenly closed down all its outlets here but there is no closure in sight for the thousands of customers who were left in the lurch.

Mr Tim Reid, from insolvency management firm Ferrier Hodgson - one of the gym's liquidators - said the firm is looking at what the next course of action will be, based on the legal advice it has received on several issues. However, he declined to give details.

After nearly 20 years of operating in Singapore, California Fitness closed all its outlets suddenly in July last year, a week after 12 of its gyms in Hong Kong shut down because of debt problems.

Besides creditors, the chain owes about $20.8 million to nearly 27,000 members, in the form of unused gym access fees and unredeemed training sessions.

The debt owed to members makes up most of the $30.8 million that the chain's owner is liable for.

Designer Joe Chan, 43, who paid more than $5,000 for a seven-year package that he used for only a year before the chain shut, has all but given up hope on getting his money back. He said: "I don't think I will ever see my money again. My numerous attempts to seek my bank's help have proven unsuccessful.

"I hope I can hear some sort of good news from the liquidators but I'm not holding my breath."

According to earlier reports by The Straits Times, several individuals who continued to operate California Fitness - although its parent company was in debt - have been identified, but they were overseas and could not be contacted.

To complicate matters, the parent holding company of JV Fitness - the gym chain's owner - is based in the British Virgin Islands and China. The liquidators said they did not have the funds to go after them, said a lawyer for the liquidators.

A liquidation report said JV Fitness was $21.7 million in the red in January 2015, and yet, it signed up new members and got them to pay their fees up front.

JV Fitness' official total assets are worth $5 million, and include rental deposits paid to its landlords, the report added.

Melissa Lin

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A version of this article appeared in the print edition of The Straits Times on July 24, 2017, with the headline California Fitness clients still out of pocket a year after closure. Subscribe