Richter called it “misappropriation” that breached an appointment order issued by the court.īut none of that detail was addressed in a decision rendered on June 8, closed June 11, and finally made public last week. The lawyer acting on behalf of Crunch Group said the transfers were to secure the operation, protect 500 jobs and provide the necessary capital to go forward. It appears some membership fees have since been refunded to local members.
Several local members expressed concern their monthly membership dues were being taken out of their accounts and charged to credit cards while the gyms remained closed.Ĭrunch maintained the membership fees were charged in error due a changeover in billing software.īut in an agreed statement of facts filed by Richter, Crunch Group admitted to using some of those funds, along with federal rent subsidy money, as short-term loans to fund its debt purchase. The owners of the Crunch Group, which includes two Cambridge gyms, among 14 others in southwestern Ontario, came to an agreement with the bank to adjourn the receivership application while the company attempted a restructuring that involved buying back a portion of its debt for a minimum agreed price.īut during the process, Richter and Associates, the firm hired to monitor the restructuring process, accused Crunch Group of funding a portion of its debt using membership fees charged during the recent provincial lockdown. The financial troubles facing Crunch Fitness appear to be over for now, giving the company more runway as it moves toward reopening later this summer.Īs reported last week by CambridgeToday.ca, in March, the Bank of Montreal applied under the Bankruptcy Protection Act to place the company into receivership due to over $1 million in unpaid debt.
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