UFC Gym Australia collapses into liquidation owing millions

UFC Gym Australia and New Zealand, once boasting over 10 fitness centres in Sydney, Melbourne, Perth, and the Gold Coast, has been ordered into liquidation by the NSW Supreme Court.

The company's collapse has left 62 creditors owed $15.6 million in total, according to filings with the corporate regulator.

The move comes six months after administrators took over the running of the business, following a protracted legal fight and a director being declared bankrupt.

A spokesperson for UFC Gym insisted the setback would only affect the main headquarters and would not have any repercussions on the gym's franchises.

'It was a difficult decision which only impacts head office,' they told news.com.au. 'It has no implications for operations.' 

The NSW Supreme Court appointed Desmond Teng and John Refalo of insolvency firm Byrons as liquidators of the chain’s parent companies on Thursday.

Ultimate Franchising Group Pty Ltd, Ultimate Franchising Group Properties Pty Ltd and UFC Gym Prospect Pty Ltd all handle the brand's franchise operations.

In June it was revealed UFC Australia had been put into administration after it was ordered to pay three franchisees $5.2million.

A court found the company and its directors had 'engaged in misleading and deceptive conduct' while selling them the franchises.

Ultimate Franchising Group’s director Sam Husseini is currently appealing this, but a proposal by related firm, Train Differently Pty Ltd, sparked fury.

They tabled a deed of company arrangement which would have given creditors just 1c for every dollar of debt, with one franchisee owed $1.236million in line for just around $13,000.

Karim Girgis, owner of UFC Balcatta in Perth, branded the proposal 'pathetic' and with the franchisees of the UFC-branded gyms in Sydney's Castle Hill and Blacktown, the trio launched legal action together.

The legal action caused director Maz Hagemrad to declare bankruptcy and the trio have now lodged paperwork to try to bankrupt Mr Husseini.

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