Hong Kong fitness chain, liquidation after listening

(Bloomberg) — Hong Kong fitness chain Physical Beauty & Fitness Holdings Ltd received a liquidation order in Hong Kong after a judge said the company was debt-free.

Judge Linda Chan told a court hearing on Monday that the company’s assets, mainly a gym and adapted beauty equipment, were worth more than HK$15 million ($1.9 million). That’s not enough to pay petitioning creditors, she said.

Hong Kong’s big fitness chains face high rental costs, competition from smaller rivals and a slow economy. Physics announced in September that the business would close after more than 30 years in business, local media reported.

The judge allowed two winding-up petitions, one against Body Beauty and Fitness Holdings and the other against subsidiary Body Wellness Center Hong Kong Ltd. Both petitions were heard together in court.

The order helps liquidators “take steps to protect the assets belonging to the holding company and subsidiaries”.

According to the petitioners’ legal representatives, Hong Kong Physical Health Center owes more than 370 creditors, the majority of whom are employees. Meanwhile, the net liability of the physical division of the busy TSIM SHA TSUI region exceeds HK$634 million, according to evidence presented by the provisional liquidators.

According to the website of the Hong Kong Judiciary, another subsidiary of Good Health will face a court hearing on February 19.

In August, Pure Fitness, a popular gym among the city’s bankers and executives, was sued over alleged rent and overhead payments at some of its facilities. It said it had resolved a dispute with its landlord the following month.

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