If you’re a California Fitness member and are holding on to that hope of getting some refund from the closure of the gym, here’s another piece of news that might just dim your hope a little more.
Yesterday (28 July 2016), California Fitness members apparently received emails from the liquidators of California Fitness, telling them that there were no funds available to refund members who have paid for membership.
To put it in a non-business term, it means California Fitness is closing down with not just $0 in their bank, but also in debts. When a company needs to wind down due to any reason, its assets (e.g. in this case, the equipment that they own or any other fixed assets) will be sold and be converted to cash. The cash will then be used to clear the debt first—if there isn’t any debt, then the cash will be given to the shareholders.
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A liquidator is an officer who would be responsible for collecting the assets and to some extent, sell off the assets so that there will be cash to pay off the debt. It is only when this is done that the company will be completely struck off (a good lesson for people who are looking to set up a company as well: you can’t just “heck care” the company when you want to close it!).
So, what this means is that California Fitness might not be able to have enough cash to refund its 23,000 members in Singapore.
However, this could be before the sale of the assets. According to The Straits Times, the liquidators are looking for people or companies to buy over the assets or as turnkey operations. A “turnkey operation” is an entity in which everything is set up and ready to be run—so, in other words, the buyer merely need to pay a fixed amount and he or she can run the gym immediately without having to buy new things (just “turn the key” and it’s good to go).
Ex-members who have signed up for packages that are paid monthly could seek refunds through their credit cards, depending on “varying caveats and administrative requirements.” However, those people who purchase a full fixed-term package, even if they opt to pay in monthly instalments, will still have to make the monthly instalment if the full amount for the package has already been given to California Fitness. And unfortunately, these are the group of people who are hit the hardest.
And even up till now, the Facebook Page and website of California Fitness still remain the same as though it’s still in operation.
Featured Image: Dean Drobot / Shutterstock.com
This article was first published on goodyfeed.com
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