The World Gym fitness club in Kakaako is under threat of eviction from a state building but has sought bankruptcy protection to keep its business running in place.
The owner of World Gym Honolulu, Gap Fitness Partners LLC, filed Chapter 11 bankruptcy last month.
The filing came after the state agency that manages the World Gym space served an eviction notice because of unpaid rent.
The Hawaii Housing Finance and Development Corp., the gym’s landlord, sued Gap Fitness in October, claiming that the company owed $140,539 in back rent as of September.
Gap Fitness leases a 13,766-square-foot space at 1050 Queen St. in the Kamakee Vista building mauka of Office Depot for $14,179 a month plus a share of expenses including parking fees, maintenance and property taxes, the lawsuit said.
Michael Glenn, a local attorney representing Gap Fitness in the bankruptcy case, said the gym aims to operate normally and take care of the rent delinquency by reorganizing its debt in U.S. Bankruptcy Court.
HHFDC is listed as the only creditor of Gap Fitness, with a $230,000 claim for lease rent that the company said is in dispute. Gap Fitness also reported having no assets.
Glenn said there were no financial troubles with World Gym operations. "The gym is doing just fine financially," he said. Glenn said the difficulty paying rent has to do with capital taken out of the company’s "corporate structure." Glenn declined to elaborate on that description.
John J. Michael of Woodinville, Wash., is the managing member of Gap Fitness. He is also founder and president of AFG Group LLC, a firm that provides billing services and equipment financing for gyms. Michael could not be reached for comment.
The HHFDC claims in its lawsuit that AFG and Michael personally guaranteed the rent for World Gym Honolulu.
World Gym is a fitness club franchise established in 1976 by Joe Gold, a California bodybuilder who opened Gold’s Gym in the 1960s but sold the rights to the business to others, who built it into a franchise chain.
Gap Fitness established World Gym Honolulu in 2011, according to the bankruptcy filing.
World Gym Honolulu advertises club rates of $25 per month, which is a monthly agreement that involves no contracts or enrollment fees.
The gym’s current ownership is different from a prior franchisee who shut down World Gym in Kakaako at the corner of Auahi and Keawe streets in 2002. The prior franchisee, former 1993 state bodybuilding champion Shane Morioka, opened his gym aimed at serious weightlifters in 1999 and rebuilt it after a fire in 2000 caused $1.6 million in damage. Morioka closed the gym in 2002 after failing to attract enough members.
