Customers owed money by Energie Fitness Dundee have been told to put in claims but warned they are last in line for refunds.
Liquidators have been appointed to wind up Jag Leisure (Scotland) Limited which ran the Douglas Road facility.
Energie Fitness, which operated as a franchise, closed its doors on Monday night without warning.
13 members of staff have been made redundant.
Creditor and cash flow pressures
Mark Harper and Steven Parker of Opus Restructuring and Insolvency are the joint provisional liquidators.
They said: “The company had been experiencing financial difficulties and sector specific challenges post pandemic, resulting in creditor and cash flow pressures.
“Largely as a result of the financial consequences attributed to the pandemic, the company ceased trading on July 11.
“The director, having closely reviewed the company’s cash flow and all options available, unfortunately found it was not possible for the company to continue to trade given the prevailing circumstances.”
Energie fitness Dundee customer refunds
The liquidators said they would write to all the members to inform them of the gym’s closure and outline steps to make claims.
But customers will not be first in line for money from the business winding up.
Staff members due wages and other pay will be treated as the first preferential creditor.
They will be followed by HMRC for liabilities such as VAT, National Insurance and PAYE.
Customers will be treated as ordinary creditors.
This group also includes the landlord and other debts such as rates, energy and corporation tax.
Any funds left for ordinary creditors will take the form of a proportional ‘pence in the pound’ distribution.
Mr Harper said the liquidators will write to all customers.
Anyone partially through a monthly or annual membership is entitled to make a claim.
However, liquidating the company is expected to take several months.
Club owner’s letter to customers
Meanwhile club owner Andrew Whittick has emailed customers.
He wrote: “For over 20 years the club has been part of the local community. I would like to thank you for being fantastic members and can only apologise for the short notice of the closure.
“Trading during and post Covid has been extremely difficult and as such the business has been faced with demands from the landlord we are unable to fulfil.
“For the past six months we have been negotiating with the landlord regarding Covid debt.
“Yesterday (Monday) I received an eviction notice meaning we had to close immediately.
“This is the last thing I wanted but was faced with no alternative.”
Conversation