New York Sports Club Settled a Lawsuit
New York Sports Club settled a lawsuit brought by the state attorney general against it. The club was accused of refusing to cancel its memberships during the pandemic. Court papers reveal that this has been settled.
In September, NY Attorney General Letitia Jam sued Town Sports International — Lucille Roberts’ parent company — alleging it illegally profited of the coronavirus pandemic. Town Sports International was accused of not honoring its promise to credit members for COVID-19 gym closings charges.
James stated in a prepared statement that “a public health crisis didn’t give these gyms permission to lift up their finances via unlawful charges.”
James’ office and TSI reached a settlement. James was given control of a $250,000 bond that the company posted in 2015 under the Health Club Services Law. This bond is to reimburse members who were accused of not opening gyms, according to papers filed Wednesday at Manhattan Supreme Court.
According to court documents, the parent company was bought out of bankruptcy.
According to James’ office, Lucille Roberts and NYSC facilities are being managed by a new company. The new owners are not involved in this case.
Owner resolves billing problems in bankruptcy plan
New York Sports Club owner will address complaints regarding its billing practices in a court order that approves the company’s bankruptcy plan.
Bloomberg News reports that the plan allows a group of lenders, including Tacit Capital, to acquire control of Town Sports International for $80 million in debt.
The District of Columbia and Massachusetts attorneys general objected earlier this week to the plan, citing Town Sports’ practice of charging customers membership fees while their gyms were closed during a coronavirus pandemic.
Christopher Sontchi, US Bankruptcy Judge, approved the Chapter 11 plan. He stated that the New York-based chain would “reasonably cooperate” with Washington DC and Massachusetts Attorneys General offices to resolve consumer complaints. New York Sports Club ex-owner settles a lawsuit brought by the NY Attorney General over billing
NEW YORK (Reuters] – Lucille Roberts, the former owner of New York Sports Clubs, and Letitia James, New York Attorney General, will forfeit a bond of $250,000 to settle a lawsuit regarding its billing practices during coronavirus pandemic.
Wednesday’s settlement does not include Lucille Roberts and New York Sports Clubs, which are now owned by the new owners.
Before the pandemic, Town Sports had operated 99 New York Sports Clubs as well as 16 Lucille Roberts. It also owned gyms in Boston, Philadelphia, and Washington, D.C.