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Archive for Friday, March 2, 2012

Lender seeks ownership of athletic club

Lawrence Athletic Club, 3201 Mesa Way.

Lawrence Athletic Club, 3201 Mesa Way.

March 2, 2012

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A default on a $2.4 million loan has created questions about the future of one of the city’s larger athletic clubs and exercise facilities.

Meritrust Credit Union has filed a petition in Douglas County District Court seeking a legal ruling declaring the credit union now owns the real estate, equipment and all other business interests of the Lawrence Athletic Club, 3201 Mesa Way.

An attorney for Wichita-based Meritrust confirmed the credit union is seeking ownership of the club after longtime LAC owner Rick Sells and his corporation Junkyard’s Jym defaulted on a $2.4 million note. But the attorney said the club’s several hundred members should not worry the exercise facility is planning to close.

“I’m confident that everybody involved wants all the people who are working out there to be able to continue working out there without interruption,” said Eric Bruce, an attorney for Meritrust. “Nobody wants to cause problems for anybody who is a member of the organization.”

According to the filing, it appears Sells has agreed to turn the property and the business over to Meritrust. The filing states “Junkyard’s Jym, Inc. has quit- claimed its interests in the subject property to the credit union.”

Sells did not return phone calls seeking comment, and an attempt to reach a manager of the club, which was open on Thursday, was not successful.

It isn’t clear whether Sells remains involved in the management and operation of the club. Bruce was guarded in his comments about the matter, but said to the best of his knowledge Sells was still involved in managing the club.

As for the ownership issue, Bruce said the court filing was an attempt to ensure no other parties had a legitimate claim to the property or business. The legal filing indicated other parties may try to make a claim on the property, including the Lawrence real estate company The Caspian Group.

The Caspian Group, which is led by longtime Lawrence landlord George Paley, won in August a nearly $400,000 judgment against Junkyard’s Jym in Douglas County District Court. That ruling stemmed from a lease dispute at 1202 E. 23rd Street, which housed Lawrence Athletic Club East before it shut down.

Shortly after the August ruling, Sells filed for bankruptcy protection. At the time, Sells told the Journal World he did not believe the ruling or his bankruptcy would impact his ability to keep the club open.

Bruce indicated that Meritrust would begin seeking a new owner for the facility once it has clear title to the property and business.

“If this goes as we want it to, we won’t own it and somebody else will,” Bruce said. “Meritrust is a credit union. It doesn’t want to own a gym.”

Comments

SofaKing 2 years, 1 month ago

I thought "Out of Order" was the brand of the treadmill.

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bigpimpin 2 years, 1 month ago

Lionbacker is correct. Dude defaulted because he took the cash and blew it on himself, didnt pay his debts or reinvest in the business. Place is worth more bulldozed, and even that isnt saying much. A membership to healthRidge in Olathe or Lifetime in lenexa is less and those places are incredible.

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SofaKing 2 years, 1 month ago

I would bid on one of the working treadmills. $500. Take it or leave it.

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lionbacker 2 years, 1 month ago

I hate to the the barer of bad news to the bank that now owns this place, but there is no one in there right mind that will pay 2.4 million for that business, even with the existing members and equipment. As a owner of a sucessful fitness club, ( not in Lawrence, but local ) there is just no way this can cash flow. I wll predict that they will try and run it for a year or so and then there will be a auction for all the fitness equipment in the building and then the building will sell. Hopefully I will be wrong, but let me know if anyone wants odds on that one. Let me know.

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08Champs 2 years, 1 month ago

Jerk? Gee, thanks. Small minded? Not hardly. VERY familiar with his business over the last 20 years? Absolutely. We'll agree to disagree.

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1southernjayhawk 2 years, 1 month ago

Since this forum is an ongoing opportunity for all the jerks and small-minded people of the Lawrence area to show up and judge others behind their anonymous cloaks, please allow my 2 cents worth. I have done business many times with Rick and I mean big, six figure business and I have found him to be, without exception, true to his word, honest, and in possession of a big heart. He was running a business, he had to say no sometimes to some people who didn't always take it well. It is a tough business environment and I'm sorry to see his business's demise. A lot of people enjoyed a lot of time and sweat in the environment he created and if LAC closes it will be a big loss for the community.

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08Champs 2 years, 1 month ago

I have known many that have worked for him and with him that were not treated fairly. Obviously he has a life outside of his business, but since this is an article about his business, then examination of his business practices are appropriate. I don't know anyone that would defend him there.

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Kim Murphree 2 years, 1 month ago

I am sorry to see this. Rick Sells has been a great friend to Lawrence people in so many ways...supporting charities, and his staff. Just ask the Kiefers--and Coopers Cause folks. I wonder at the voratious appetite of for more $$$ of people like George Paley. Did we really have to put someone out of business, George? Really? Rick has been part of our local scene and local economy for almost 30 years. That deserves some respect. I just bet you could have found a more eqiutable resolution. As for the above comment, "shady" and "cutting corners" I bet you are perfect and have been a business owner that has created hundreds of jobs for 30 years or so, right? In any case, there are many of us who are saddened by this and hope that Rick and Shannon will continue to be a part of the Lawrence business community as well as the community at large.

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lunacydetector 2 years, 1 month ago

self assists would be perfect, but then he wouldn't have his basketball courts for tournaments where he can recruit.

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RDE87 2 years, 1 month ago

Rick Sells has been cutting corners and doing shady business for years. This news does not come as a surprise to me. He is getting what he deserves. My hope is that the new owners are able to fix all the broken equipment, leaks in the ceiling, etc.

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JackMcKee 2 years, 1 month ago

What happened to the first story?

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ontarget 2 years, 1 month ago

What caused this business to go bankrupt? Does anyone know?

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Steve Jacob 2 years, 1 month ago

It may not close right away, but would anyone sign a one year contract right now?

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