Receivership

pamelavhill

My gym announced that it was going into receivership although they had a couple of different interested parties to possibly purchase it. (It is a gym and Hotel). I have now been asked to pay my annual fee of over £600 but am concerned that if I pay this and no buyer is found, that I'll lose the money. Equally, I do not wish to pay another joining fee and don't want my membership to lapse as I use it regularly. If I pay by credit card and it goes 'belly up' with no buyer, will I be covered by the CC company?
Puzzled!:eek:

Degenerate

Any commitments made after the business has entered receivership should be safe. At the point it went into receivership, enforcement of all outstanding debts was suspended and the running of the business taken over by accountants whose job is to maximize the return to the creditors. If they are continuing to solicit membership fees, they have obviously decided they will get a better return by maintaining the business as a going concern than liquidating it. They would not allow the business to continue to trade in an insolvent manner and accumulate further liabilities, as this would then be serious negligence on their part. They have no interest in taking chances, as they have no stake in the business and get their fees either way. It will most likely be sold to a new owner and the proceeds used to pay back as much as possible to the creditors.

cos_2

I appreciate Degenerate's opinion, but, personally, I'd call my CC and ask their advice.

chattychappy

Degenerate sums the position up nicely, but in the end it will be down to the T+Cs relating to the annual fee. What are they actually offering you for that? It's a lot of money (perhaps it's not for a gym, I don't know - I just spend the money on food and get fat instead) - so you want to be sure that the elements of the service that are important to you are specified. It sounds like things will change over the coming months and you might regret locking yourself in.

chattychappy

cos wrote: »

I appreciate Degenerate's opinion, but, personally, I'd call my CC and ask their advice.

I think that's good in principle... but whether you can rely on what they say is another matter!

Degenerate

cos wrote: »

I appreciate Degenerate's opinion, but, personally, I'd call my CC and ask their advice.

It's a strictly Government regulated process. The worst that can happen is they don't find a buyer, decide to liquidate and refund the remaining term of membership. If a company is unable to make good on a liability incurred whilst in receivership, then that is malpractice and you can recover you loss directly from the Insolvency Practitioner (who will also have insurance for such situations).

chattychappy wrote: »

Degenerate sums the position up nicely, but in the end it will be down to the T+Cs relating to the annual fee. What are they actually offering you for that? It's a lot of money (perhaps it's not for a gym, I don't know - I just spend the money on food and get fat instead) - so you want to be sure that the elements of the service that are important to you are specified. It sounds like things will change over the coming months and you might regret locking yourself in.

This is a good point - you can continue your membership, but are you sure you want to?