SINGAPORE - JV Fitness, the company that owns and operates the now-closed California Fitness gym chain in Singapore, had chalked up losses of more than $25.6 million as at June 30 this year, said a report by its provisional liquidators.
The company has total liabilities of $30.8 million and assets of $5 million, said the report by Mr Tim Reid and Ms Theresa Ng, who were officially appointed as liquidators by the High Court on Friday (Aug 12).
Claims by the chain's 27,000 members, who paid in advance for their gym memberships, amounted to $20.8 million, making it the largest category of creditors.
The report also revealed that on July 20 alone, the day it was announced that the gyms were closed with immediate effect, the liquidators received 349 phone calls and 500 e-mails from members seeking refunds and asking about the collection of their belongings at the gym's three outlets at Raffles Place, Novena and Bugis.
But despite the media publicity over the closure of the gyms, at least 500 members have yet to retrieve their belongings.
To date, the liquidators have received 1,468 proof of debt forms from members.
According to the report, JV Fitness owes the landlords of the three outlets a total of about $1.78 million in outstanding rent.
Mr Reid and Ms Ng, from insolvency management firm Ferrier Hodgson, were first appointed as provisional liquidators on July 19.
All 249 employees were terminated the following day. They have been paid their salaries for June, except for commissions. However, they are owed their salaries for up till July 19, totalling about $403,000, as well as their CPF contributions for June, amounting to about $145,000.
Shortly after midnight on July 20, Ferrier Hodson sent out a media statement, saying that the gym outlets were closed with immediate effect because JV Fitness lacks the finances to keep them running.
In their report, the liquidators extracted information about the company's financial performance and position. As at June 30 this year, the company incurred losses of more than $25.6 million, more than 128 times its recorded paid-up capital of $200,000.
"The statement of financial position as at 30 June, 2016 records no debt owing to financial institutions which raises the question as to where the company sourced the funds to enable it to continue trading given the company's substantial negative equity position," said the report.