Skip to main content

Advertisement

Advertisement

California Fitness sought buyer but ran out of cash, says liquidator

SINGAPORE – The California Fitness chain had to shut down, as it did not have enough cash to hold out while a buyer was being sought, said Ferrier Hodgson, the company appointed to liquidate the fitness chain.

Passersby stand outside the shuttered Novena Branch of California Fitness. Photo: Ernest Chua/TODAY

Passersby stand outside the shuttered Novena Branch of California Fitness. Photo: Ernest Chua/TODAY

Follow TODAY on WhatsApp

SINGAPORE – The California Fitness chain had to shut down, as it did not have enough cash to hold out while a buyer was being sought, said Ferrier Hodgson, the company appointed to liquidate the fitness chain.

Nonetheless, the hope is still to identify a buyer, and the immediate plan is to meet with the landlord of all three premises in Singapore, identify a purchaser acceptable to the landlords, and seek an agreement between the landlord, provisional liquidator and purchaser, said Mr Tim Reid, Partner at Ferrier Hodgson.

“We reiterate that our role is to achieve the best outcome for creditors of the company. As such, our efforts are in line with the concerns of members. We appeal to members to be patient and await updates from us. Ferrier Hodgson will be posting information on a website shortly, to provide information to members,” he said in a statement on Thursday evening (July 21).

Last Saturday morning, California Fitness suddenly announced that its outlet at Republic Plaza at Raffles Place was “closed until further notice”.

Then, just after midnight on Wednesday, an announcement was made that operations at all its outlets — including those at Bugis Junction and Novena Square — would cease immediately because JV Fitness, which owns and operates the gym, “does not have adequate liquid resources to continue its operations”.

In his statement, Mr Reid said a decision was made to close the gyms as the company was facing a shortage of cash.

“We had anticipated that when we were appointed there would have been significantly more cash that would have enabled us to continue operations while we sought to identify a purchaser. Staff salaries were however paid just before we were appointed and this has greatly reduced the cash available upon appointment,” he said.

He added: “We hope to have some agreement with the landlords whereby we can market the gyms for sale at the current premises. Obviously we need the landlords’ support. Providing we can reach agreement with the landlords we will be calling for expressions of interest shortly. The lack of cash means we need to move quickly.”

As of noon on Thursday, the Consumers Association of Singapore (CASE) has received 376 complaints about the fitness chain.

In an advisory on its website, CASE said: “In view of the liquidation proceedings, there is a stay of proceedings on all litigation action. This means that any claim by consumers against California Fitness would not be able to proceed.”

They also said that a court hearing on the matter has been scheduled for August 12. “The provisional liquidators will report their findings to the High Court and the creditors once they have completed their assessment,” said CASE, adding that consumers are likely to form the largest creditors for California Fitness.

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.