UFC Gym Australia plunges into liquidation and owes millions
UFC Gym Australia and New Zealand, once with more than 10 fitness centers in Sydney, Melbourne, Perth and the Gold Coast, has been ordered into liquidation by the NSW Supreme Court.
The company’s collapse leaves a total of 62 creditors owed a total of $15.6 million, according to filings with the regulator.
The move comes six months after administrators took control of the company following a four-year legal battle and the bankruptcy of a director.
A spokesperson for UFC Gym emphasized that the setback would only affect the headquarters and would not affect the gym’s franchises.
“It was a difficult decision that only affects the head office,” they said news.com.au. ‘It has no consequences for business operations.’
UFC Gym Australia is a mixed martial arts gym franchise founded in 2009
A spokesperson for UFC Gym emphasized that the setback would only affect the headquarters and would not affect the gym’s franchises.
The NSW Supreme Court on Thursday appointed Desmond Teng and John Refalo of insolvency firm Byrons as liquidators of the chain’s parent companies.
Ultimate Franchising Group Pty Ltd, Ultimate Franchising Group Properties Pty Ltd and UFC Gym Prospect Pty Ltd are all responsible for the brand’s franchise operations.
In June, it was revealed that UFC Australia had gone into receivership after being ordered to pay three franchisees $5.2 million.
A court found that the company and its directors had “engaged in misleading and deceptive conduct” while selling them the franchises.
The judge found that UFC Gym Australia co-directors Mazen Hagemrad and Samer Husseini had claimed two of the franchises were profitable and made profit forecasts, when in reality they were losing money.
Mr Husseini, director of Ultimate Franchising Group, is appealing the court’s decision, but a proposal from a related company, Train Different Pty Ltd, sparked anger.
They filed a Deed of Corporate Agreement that would have given creditors just 1 cent for every dollar of debt, with one franchisee owing $1.236 million for only about $13,000.
The legal action sent director Maz Hagemrad (pictured) into bankruptcy and the trio have now filed paperwork to try to force Mr Husseini into bankruptcy.
Karim Girgis, owner of UFC Balcatta in Perth, dismissed the proposal as “pathetic”, and along with franchisees of UFC-branded gyms in Castle Hill and Blacktown in Sydney, the trio launched legal action together.
The new lawsuit saw director Maz Hagemrad declared bankrupt and the trio have now filed paperwork to try to force Mr Husseini into bankruptcy as well.
UFC Gyms Australia now lists just six locations on its website, with gyms and fitness centers in Bankstown, Rockdale, Gregory Hills, Wetherill Park, Woolooware and Macarthur Square.
More to follow