Club Industry is part of the Global Exhibitions Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Pennsylvania Clubs Close; Court-Appointed Receiver Steps Down

Doug Cash, who took over the Lehigh Valley (PA) Racquet and Fitness Clubs from founder John Brinson in May 2012, told Club Industry he resigned shortly after the clubs shut down on April 8.

All three Lehigh Valley (PA) Racquet and Fitness Clubs, formerly known as 24-7 Fitness Clubs, closed on April 8, and the bankruptcy court-appointed receiver in charge of the clubs, Doug Cash, resigned soon after the closings.

Cash took over the clubs from founder John Brinson in May 2012 after the chain filed for bankruptcy. Brinson left the company in 2012 as part of a resolution filed in U.S. bankruptcy court with NovaBank of Philadelphia, which at the time served as the clubs' lead bank. NovaBank closed in October 2012, and its assets were sold to the Federal Deposit Insurance Corp. (FDIC). The Bank of Camden (TN) gained control of the clubs through an auction later that year and has been the primary owner of the clubs since, the Morning Call of Lehigh Valley, PA, reported.

"Between October 2012 and March 2013, I heard almost nothing, and the FDIC was very silent," Cash tells Club Industry. "It was almost to the point where I wasn't sure what was going on and I couldn't get a hold of anybody. It was very strange."

Messages to a representative at the Bank of Camden by Club Industry have not been returned, nor has the bank responded to the Morning Call newspaper.

The Bank of Camden had tried to sell the Lehigh Valley clubs earlier this year, Cash says, but the deal fell through. Had the purchase been consummated, the buyer would not have kept the clubs running as health clubs, Cash says.

On April 7, Cash received an email from the legal counsel for the Bank of Camden informing him to shut down operations of the clubs. The next day, Cash says he was informed by the bank's legal representation that the bank was no longer going to honor checks he had written on behalf of the clubs and froze the clubs' accounts.

"I was startled by the abruptness of this close," Cash says. "I asked, 'Why are you doing this?' And they wouldn't give me a reason."

Cash then relayed the information to the COO of the clubs. The chain had three clubs in Bethlehem, Trexlertown and South Whitehall Township, PA.

"Between members and the team, there was crying, there was anger, there was every emotion you could imagine," Cash says.

Staff initially couldn't find the keys to lock the clubs that night, Cash says. The chain, which was founded in 1979, had been opened 24 hours a day, seven days a week.

"We couldn't even lock the clubs," says Cash, who lives in retirement in Indiana. Cash was the former chief operating officer at Tennis Corporation of America, Chicago. He resigned as receiver for the Lehigh Valley clubs on April 11.

"I didn't want anything to do with these guys," Cash says of the bank, "because I did not like what they were doing."

The Morning Call reported last week that former employees and members still had no more information about the state of the clubs. Cash says the chain employed about 200 full- and part-time employees and had about 8,000 members.

The Pennsylvania Attorney General's office has launched an investigation, and its Bureau of Consumer Affairs was gathering information into the closing of the clubs, the newspaper reported.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.