Members or staff of €19m gym collapse to get nothing
UPMARKET Dublin gym operator Total Fitness collapsed with debts of €19.6m and almost no assets, people owed money by the chain learned last night.
It means there is no prospect of a cash refund for the 15,000 gym members or of any recovery for local suppliers.
Gym members are owed €1.6m in lost fees and 100 employees look set to lose their minimum notice payments as result of the closure of the chain.
Centre Operations Limited, the company that ran the upmarket gyms, voluntarily closed its doors on March 16, blaming soaring rents and falling membership.
It operated big, state-of-the-art gyms in Castleknock, Malahide Road and Sandyford.
Yesterday, at a packed meeting, hundreds of gym members and others owed money by the company were told that an €18m shortfall in the accounts meant they had little hope of recovering cash from the collapsed business.
The huge shortfall came because Total Fitness Ireland collapsed owing €10m to Barclays and the Cooperative Bank in the UK.
The massive debt was run up as a result of a guarantee the Irish company gave to its UK parent company that allows the two banks a right to the value of the Irish assets in the event of liquidation.
Even the two banks are braced for massive losses, however, because those Irish assets are expected to realise a little over quarter-of-a-million euro.
The biggest asset is €7m owed to the business through an inter-company loan, but the company reckons there is no prospect of that debt being paid.
That leaves the quarter of a million to cover not only the €10m due to the banks, but €1.5m owed to preferred creditors including the Revenue Commissioners, who are first in line to be repaid.
Yesterday, creditors voted to appoint David van Dessel of Kanavagh Fennel as liquidator.
After the tax authorities, the biggest Irish hit is to Fingal county Council, which is owed €100,000, and Bord Gais, which is owed €46,000.
Solicitors Mason, Hayes and Curran are owed €44,000.
Mr van Dessel said he will explore the possibility of reopening the gyms in an effort to sell them as a going concern.
That may be far from easy, he warned, after doors were closed and staff made redundant two weeks ago.
However, he said Total Fitness was up to date with its rents and it may be possible to convince landlords to allow the chain to reopen.