The Taipei District Court on Wednesday ruled that Alexander Health Club Group, the operator of a defunct chain of health clubs, must pay more than NT$256 million (US$9.18 million) to its former members for on Dec. 10, 2007, shutting down all of its 21 branches without prior notice.
The ruling comes 14 years after the Consumers’ Foundation in January 2008 filed a class-action lawsuit on behalf of 8,564 former members of Taiwan’s once-leading health group chain, seeking NT$582 million in punitive damages from the owners of the company.
At the time of its closure, the company ran 16 Alexander fitness centers, four Aegius Clubs and one Jun Spa.
The court ruled that the company must pay NT$186.02 million to Alexander members, NT$57.28 million to Aegius members and NT$12.92 million to Jun Spa members, amounting to more than NT$256 million.
The verdict can be appealed.
The court said that members had the right to receive damages as the branches had either dissolved or revoked their memberships, thus failing to provide the services agreed upon in their contracts.
The plaintiffs argued that group founder Candy Tang (唐雅君) and her sister, Tang Hsin-ru (唐心如), had continued selling memberships at discount prices to thousands of people when the firm was at the brink of collapse due to financial difficulties.
The Tang sisters were indicted on Jan. 17, 2008, on charges of fraud and breach of trust, and were in 2011 sentenced to respective prison sentences of one year and 10 months, and one year and eight months. They were later released on parole.
The group, established in 1982, at its peak reported fully booked classes taught by what it claimed were top instructors. The Aegius Clubs, launched in 2000, targeted upper-class businesspeople.
Analysts attributed the group’s collapse to its hasty expansion amid a changing business climate that the company’s management seemed unaware of.
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