Local News

Peak Fitness closes another location

Posted June 14, 2009 8:40 p.m. EDT
Updated June 15, 2009 4:59 p.m. EDT

— A troubled health-club chain with locations in the Triangle has closed its doors in downtown Raleigh.

A note on the door over the weekend directed members of the Peak Fitness, at 509 W. North St., to another of its clubs in North Raleigh.

The closure is the latest in a series over the past several months. Other clubs in Raleigh, as well as Garner, Knightdale and Winston-Salem have closed abruptly.

The company is also closing down its club on Falls of Neuse Road in Raleigh and the McGregor Village location in Cary, according to a news release Monday from Lifestyle Family Fitness, out of St. Petersburg, Fla.

Lifestyle announced it would be transferring memberships from the three Peak locations to its area clubs.

Peak members also reported Monday seeing a notice on the door at a Fuquay-Varina club, which states that the property owner has terminated the lease for "failing to make the rental payments when due."

An employee confirmed the notice Monday morning but said that the gym was open and operating as usual.

The Charlotte-based company has seen its share of legal and financial problems over the past several months.

In January, a Superior Court judge ordered the chain to change its operating practices in response to hundreds of complaints over the past five years.

Among the changes, it agreed to designate a single point of contact to handle consumer complaints, clearly post contact information for its billing company and give advance notice to gym members when a health club closes or transfers memberships.

It also agreed to maintain appropriate bonds for each health club to be used to pay refunds to members if a club closes.

In April, Peak Holdings, a subsidiary of Peak Fitness, filed for Chapter 11 bankruptcy, citing $50,000 in assets and between $500,000 and $1 million in debt to nearly 200 creditors.

When the chain's bondholder canceled its bonds in May, Attorney General Roy Cooper filed a second lawsuit against the company. Peak Fitness then agreed to stop selling prepaid memberships and collecting other advance payments until it could secure replacement bonds.

“We’ve been concerned about whether this company can make good on its obligations, which is why we have had to take action,” Cooper said in a statement Monday. “We are following the latest developments closely and consumers are encouraged to contact us for help.”

Cooper also urged club members to continue reporting problems to the state Consumer Protection Division at www.ncdoj.gov or toll-free at 1-877-5-NOSCAM.