Archive for Tuesday, August 16, 2011

Lawrence Athletic Club owner says personal bankruptcy shouldn’t affect business

August 16, 2011


The owner of the Lawrence Athletic Club said Tuesday his members should expect the business to stay open for the long-term despite his recent personal bankruptcy filing and a nearly $400,000 legal ruling against the business.

“We have been here 27 years, and I plan to be here another 27 years,” said Rick Sells, an owner of the Lawrence Athletic Club, 3201 Mesa Way. “As far as I know, nothing is going to change for us.”

Sells said he knows people have been speculating about the club’s future after he and his wife, Shannon Sells, filed for personal, Chapter 7 bankruptcy protection earlier this month. That filing came after Douglas County District Court Judge Paula Martin ordered Sells and his Junkyard’s Jym Inc. — which does business as the Lawrence Athletic Club — to pay $375,641 in unpaid rent to The Caspian Group, his former landlord when the club operated a gym at 1202 E. 23rd St.

Sells closed that location in February 2010, and said at the time he did so because of a legal issue. The building is owned by The Caspian Group, a local firm lead by longtime Lawrence landlord George Paley.

But Sells said the legal matter did not put his business’ future in jeopardy.

“All people are doing now is speculating and trying to dream up trash,” Sells said.

The legal and financial issues come at the same time that the Lawrence health club market is going through change. Wichita-based Genesis Health Clubs completed a deal in late July to purchase the Maximus Fitness and Wellness Center at 2339 Iowa Street. At the time, Genesis’ owner said he was actively seeking a second location in Lawrence. That sparked speculation that a deal may be in the works for the Lawrence Athletic Club.

Sells said he could never rule out the possibility of a sale at some point in the future, but he said people who believe a deal with Genesis is in the works are misguided. He said he entered serious discussions to sell the business to Genesis two years ago, but the two parties were not able to reach an agreement.

“The good Lord has kept me in business for 27 years,” Sells said. “The way I see it, there must be a reason why he wants me in business.”


Janet Cinelli 6 years, 10 months ago

Again, couldn't have happened to a nicer guy.

normalgirl14 6 years, 10 months ago

1) Obviously you don't know much as the Sells have been attending the same church for years and years.

2) It sure is funny how religious people are not suppose to judge but usually end up being the most judgemental of them all.

3) Everybody goes through hard times in their life and maybe they didn't know God before but as long as they found him why does it matter. Ever heard of You should check it out....most of those people went through very hard times and found God at the end of it. It happens all the time, get over it and make sure you know what you're talking about before you make a comment.

irvan moore 6 years, 10 months ago

wow, i can't believe a landlord would let somebody get that far behind in rent.

gl0ck0wn3r 6 years, 10 months ago

Believe it. All these people who complain about rental prices have never owned property and thus haven't had to build in the risk of having tenants stop paying rent.

otto 6 years, 10 months ago

I dont now any specifics in this situation. But it is possible he had a lease and he left early. He may not have been behind in rent.

greenquarter 6 years, 10 months ago

I have it on good authority that he decided that because the east location wasn't doing so hot financially, he didn't need to pay as high of rent as his lease stipulated. So he didn't.

Sigmund 6 years, 10 months ago

You mean the Fed's won't have to borrow $1.8 million from the Chinese to give to the Kansas Art's Commission? I am not sure how Kansas will survive.

just_another_bozo_on_this_bus 6 years, 10 months ago

No, but they most certainly will have to borrow $trillions to pay for tax cuts the wealthy, just so they can buy US bonds.

Sigmund 6 years, 10 months ago

Doh! You mean the Fed's won't have to borrow $1.8 million from the Chinese to give to the Kansas Art's Commission? I am not sure how Kansas will survive.

Keith 6 years, 10 months ago

"Lawrence Athletic Club owner says personal bankruptcy shouldn’t affect business "

But I bet it does.

kansasredlegs 6 years, 10 months ago

I'm no bankruptcy judge, but I did sleep at College Motel last night and Airport Motel the night before that. Seems that if one declares a Ch 7 which is a personal liquidation, then the debtors will have to give up up all their assets except those needed for everyday living, e.g., 2 cars, a house, furniture, dishes, tools of the trade up to approx. $7,500 value, etc. Therefore, it would seem that LAC is indebted up to its smelly armpits and therefore can't even be taken over by the Ch. 7 Trustee to auction off the assets. Or, it could be that as "an owner" the business ageement will not allow a trustee to get any of it and LAC Group must not pay ole Rick enough; otherwise, he'd be in a Ch. 13, repaying part of his debt.

Remember Rick, it's Karma -- see what happens when you give you & your spouse the two best parking spots closest to the door.

Sunny Parker 6 years, 10 months ago

Why are people so happy to see someone fail?

greenquarter 6 years, 10 months ago

If you knew Rick Sells and/or any of his business practices, you too would be shouting from the rooftops. From his run-down athletic club (though he lives in a $700K house) and unreasonable policies for his instructors to his refusal to allow breastfeeding in the child care area (but his ignorance did help lead to the law saying you could nurse in any public place), the guy is one of the least respected businessmen in Lawrence, and for good reason. For example, when you put your kid in child care, you have to read/sign a paper (practically unintelligible, like all Rick's beloved notes to members) that tells you how grateful you should be that they provide child care at all, but yet there's a sign on the door asking for donations of unwanted videos and toys. Please.

ou812mr2 6 years, 10 months ago


GardenMomma 6 years, 10 months ago

I'm just bummed that half the classes are canceled now. What's up with that? All the good ones too.

Sigmund 6 years, 10 months ago

GardenMomma (anonymous) says… "I'm just bummed that half the classes are canceled now. What's up with that? All the good ones too."

I hope you didn't sign a long term contract with LAC. Can't tell you how many people LAC sued over the years to enforce the terms of their membership contracts.

lawslady 6 years, 10 months ago

I only know of one such situation (but do not doubt there are more). It was a long time ago. But really amazing. The club had a FIRE and the member couldn't use the facility b/c of it. But the business still wanted members to continue paying dues and honoring their contracts. Nevermind that the club could not hold up ITS end of the bargain.....

Lydia Diebolt 6 years, 10 months ago

This man has been stealing money from good people for years! I rarely post comments on the LJ World, but this time I really feel the need to do so. I sincerely hope that George gets some of his money back and that this doesn't affect Rick's responsibility to pay him.

bullydad1 6 years, 10 months ago

The rumor I heard was that Rick was trying to get all the instructors to sign a rather ridiculous no compete clause if they were going to continue to teach classes at LAC. That's the reason for all the recently canceled classes.

greenquarter 6 years, 10 months ago

Three years--an unreasonably long time especially when the club is "always for sale" and who knows what would happen with a new owner. Here's an idea: Create an environment where employees don't WANT to leave rather than trying to bully them into staying. And no, I don't work there, but I have many reliable sources.

luvmyjhawktattoo 6 years, 10 months ago

I agree that this couldn't have happened to a better person. Steroids kill brain cells you know. Perhaps he would be in a different situation had he not spent all of his money suing people over ridiculous no compete clauses trying to make sure that he was the only one in Lawrence to saturate the market. His former trainers are so much better off now that they are not under his thumb.

08Champs 6 years, 10 months ago

Rick sued and apparently won a case recently against a former personal trainer that started his own business - hopefully that will go away if LAC goes under. The trainer had to sign a no-compete when he was an employee, but when Rick changed the trainers status from employee to a self-employed contractors (having to pay to "rent" the space for training) one would think the no-compete would have been nullified.

Interesting point - I'm pretty sure that the landlord (Paley) suing Rick was one of the original partners of LAC when it opened on Mesa Way, but don't know if George got out previously. If not, it's an interesting aspect of this situation.

Bob Forer 6 years, 10 months ago

Interesting. He's not the first "Good Christian" I've run into that was a bona fide crook.

Resident10 6 years, 10 months ago

I don't think God has anything to do with him being in business but I do hope this forces a deal with Genesis. I would love to have a gym where the equipment worked. In the meantime lets shoehorn another leg press into that weight room.

nextemperor 6 years, 10 months ago

This comment was removed by the site staff for violation of the usage agreement.

08Champs 6 years, 10 months ago

I'd like to hear from a bankruptcy attorney - why is it allowable to claim bankruptcy to escape debt and still keep a home listed at over $780,000 by the county? Just curious -

Bob Forer 6 years, 10 months ago

Under Kansas law, one's personal residence is exempt from the claims of unsecured creditors, regardless of value.

zetazetazeta 6 years, 10 months ago

This comment was removed by the site staff for violation of the usage agreement.

sportsfan3 6 years, 10 months ago

This above poster irritated me a little, and I'm positive I'm aware of who the above poster is.... someone (formally close) to management. Yes, there are some bad childcare girls, also bad cleaners, bad front desk, and bad salesman, but I can assure you that the statement that the manager goes out and parties with the underage employees is false.

But besides that post, if anyone who does have a problem with the way LAC is managed/operated/exc I'm positive RIck would like to talk to you about it, in the past he never has had a problem with speaking to those in the community. Just recently I saw come up to a member during his workout and ask for a suggestion for the club, so to say he doesn't care is out of line. If you ever have a problem with the way an employee is acting in (or if you care enough, out of work) speaking to management is your best option and he will fix it. Rest assure this is Ricks life and to say he doesn't care is absured.

To comment on the non-compete form all employees are forced to sign one saying the wont start/work at a gym for 3 years... WITHOUT RICKS PERMISSION. Now, I'm going to go out on a limb and say if you moved to St. Louis and wanted to work at gym I'm pretty sure he would give you permission. Now if you want to go start (the soldout) Maximus or your own private gym, yes, he is going to sue you. LAC isn't operated the best, but that is a smart move to make, espeically since LAC is one of the top gyms, and without a doubt, with the most members in Lawrence.

Anywho, if anything is taken from this comment, why does it concern LAC about Rick's personal finance situation. All of you out there taking paycuts and dealing with the same economy, you probably wouldn't like your business out there too, especially in a small town.

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