Consumers want Youth Camp declared bankrupt

"We don't know how long it will take and how much each creditor can get. But it is better than doing nothing."

Terry Huang, Consumers' Foundation secretary-general

A consumer advocacy group yesterday announced plans to apply for a court order declaring the debt-ridden Youth Camp Health Group (佳姿健康集團) as bankrupt, in a bid to force the fitness-center chain to make public its financial situation and allow creditors the opportunity to obtain compensation.

"Since Youth Camp closed down its last location in the Taipei 101 building on May 20, we've received 142 letters of complaint from its members, excluding those making phone calls to offer suggestions," Jason Lee (李鳳翱), chairman of the Consumers' Foundation (消基會), told a press conference yesterday.

The average balance of paid membership fees is NT$78,659 (US$2,540) per member, with the highest amounting to NT$1.01 million, Lee said.

"Youth Camp has never disclosed its financial statements and has refused to refund its members, which we think seriously violates consumers' rights and interests," he said.

The financial crisis surrounding the 29-year-old firm, founded by its current chairwoman, Pure Tsai (蔡純真), erupted in late February when checks worth tens of millions of NT dollars bounced and payment of employees' salaries was delayed.

According to its internal estimates, the company has accumulated debts of NT$1.3 billion, which includes bank loans amounting to NT$760 million, unconsumed member fees of NT$200 million, and accounts payable at NT$130 million.

Tsai not yet proposed a satisfactory repayment plan, but is engaged in negotiations with potential buyers behind closed doors.

Considering Youth Camp's financial troubles, the foundation said that there was no point in consumers filing group lawsuits, as the company has no cash for compensation.

"We think it is more feasible to follow the Bankruptcy Law (破產法) and apply for a court ruling to declare Youth Camp bankrupt," said Terry Huang (黃怡騰), the foundation's secretary-general.

As long as one victim files an application, the court will have to investigate to determine whether the company's debts exceed its assets. This would force Tsai's company to present the relevant financial documents to the court and would eliminate the possibility of the company getting rid of its assets to dodge responsibility, according to the foundation.

If a bankruptcy ruling is made, the court will appoint a management committee to formally take over Youth Camp, allowing all its creditors to take part in discussions of how the firm's assets should be distributed. But the process is complex and long-winded, Huang said.

"We don't know how long it will take and how much each creditor can get. But it is better than doing nothing," he said.

The foundation's volunteer lawyers can act on behalf of consumers, and the foundation will submit consumers' applications to the court in 10 days.

Acting Youth Camp spokesman Andy Wu (吳恩文) yesterday told the Taipei Times in a despondent voice that the company has no comment and that Tsai is in talks with a local company in a bid to rescue her firm.

Dynasty Design Corp (衡美企業), which decorated Youth Camp's premium Taipei 101 Oxy Gym, applied with the court to declare the fitness-center chain as bankrupt late last month after failing to collect over NT$60 million in fees.