Ulster Bank suffers second hit on loans to fitness clubs

Examiner’s scheme to rescue Prime Fitness would see Ulster Bank receive €114,000

Among the six gyms that have been saved by the examiner’s proposals is  the Clarendon Street, Dublin, premises that used to be known as Jackie Skelly’s. Photographer: Dara Mac Dónaill

Among the six gyms that have been saved by the examiner’s proposals is the Clarendon Street, Dublin, premises that used to be known as Jackie Skelly’s. Photographer: Dara Mac Dónaill

 

Ulster Bank has seen loans of just under €12 million wiped out since the Jackie Skelly chain of health clubs went bust in 2010 and the financial collapse recently of Prime Fitness Ltd the company that took them over.

Mr Justice Robert Haughton, in accepting a new scheme of survival by the examiner appointed to Prime Fitness more than three months ago, said on Monday that the lender had suffered a double hit.

The bank had lost €5.6 million of the €12 million debt in 2010 and the current examiner’s scheme to rescue Prime Fitness would see Ulster Bank receive only €114,000 of what was owed to it.

Judge Haughton accepted the rescue plan drawn up by examiner Anthony Weldon, of Kieran Ryan & Co, which he said would save 130 jobs and reduce the burden that would otherwise fall on the Department of Social Protection. The court heard that 33 jobs had already been lost with the closure of the Navan and Newbridge health clubs.

The judge said he was satisfied there was a reasonable prospect of the company surviving with the fresh investment of €2 million by Crompton Sports Ltd, which had connections with Abbey International Finance Group, the company that had initially invested in the Jackie Skelly chain.

Judge Haughton said he was satisfied there had been no material lack of candour to the effect that Abbey International was the parent company and beneficial owner of Crompton Sports Ltd.

When the High Court last week heard the application by Mr Weldon to accept his scheme of examinership, Judge Haughton heard suggestions that certain shareholders in the chosen investor were “part and parcel” of Abbey.

The judge said nothing had been disguised in the application and although there was an association between Crompton Sports and Abbey International, Crompton had been selected by Mr Weldon in the best interest of the survival of Prime Fitness, part of the Energie Fitness group, which owns more than 100 clubs in Ireland and the UK.

The six gyms that have been saved by the examiner’s proposals are those in Rathfarnham and Clarendon Street, Dublin, Swords, Ashbourne, Ballsbridge and Drogheda. They are separate from another six in other locations which operate under the Energie brand and which are not affected.