California Fitness has no money for refunds
MEMBERS of troubled gym chain California Fitness yesterday received letters telling them there is currently no money available to refund them following the closure of its branches here.
Ferrier Hodgson, the liquidators for the chain's parent company J.V. Fitness, also sent them a proof of debt form to file their claims.
California Fitness closed its Raffles Place branch on July 16, followed by its Novena and Bugis outlets on July 20, leaving members high and dry after having paid thousands up front in membership fees.
Tim Reid, a partner at Ferrier Hodgson, confirmed that there are currently no funds available to refund members and said the accountancy firm is gradually sending e-mail messages to the 23,000 members.
He added that J.V. Fitness has no secured creditors.
However, among the unsecured creditors, there are preferential ones such as employees and the Inland Revenue Authority of Singapore, which are afforded a priority.
The members form a "very big proportion" of the pool of unsecured creditors and the value owed is a "very big number", said Mr Reid.
Ferrier Hodgson placed an advertisement in The Business Times on Wednesday stating that the liquidators are seeking expressions of interest from those who wish to purchase the gyms, collectively or individually, as turnkey operations.
The advertisement mentioned only the Raffles Place and Bugis outlets, and listed the facilities and equipment included such as cardio machines, free weights, resistance machines, kick fit areas, studios, steam rooms and saunas.
Mr Reid added: "We have not reached an agreement with the Novena landlords at present."
Registrations of interest have to be lodged with the liquidators by Aug 3.
A hearing before the High Court is set for Aug 12 where the provisional liquidators will report their findings to the High Court and the creditors upon completing their assessment.