Winding-up order for Hong Kong’s debt-ridden Physical gym chain
Firm owes 374 employees more than HK$70 million in unpaid salaries, court hears
A Hong Kong court has ordered the winding up of scandal-hit Physical gym chain after hearing the firm owes more than HK$70 million (US$9 million) in unpaid salaries to 374 employees.
Eight people, including seven former employees, applied to the High Court last year for the liquidation of Physical Beauty and Fitness Holdings, a firm registered in tax haven the British Virgin Islands, and its subsidiary Physical Health Centre Hong Kong, which was responsible for recruitment.
The court heard on Monday that Physical, which has a total of 13 subsidiaries, owed 374 employees more than HK$70 million in unpaid wages, and would have been unable to cover its liabilities even after selling all of its fitness equipment, believed to be worth about HK$15 million.
Madam Justice Linda Chan Ching-fan ruled in favour of the petitioners after accepting the two companies had been seriously in debt.
She highlighted that Physical’s branch in Tsim Sha Tsui had accumulated debt of more than HK$630 million, which included HK$480 million worth of prepaid services it had failed to deliver.
The court is expected to explain its decision in writing in two weeks.
