Owners of a now-shuttered Brockton gym are facing allegations of breach of contract, after they were forced to abruptly close their doors.
Our Boston business lawyers know that times are tough for everyone, and unfortunately, not every business is going to make it. However this situation may result in criminal charges, in addition to civil claims, due to the way these owners went about it.
We talk a lot about the importance of bringing on a small business attorney when you are opening a Boston business. We haven’t discussed as much the importance of bringing one on when you think you may be forced to close.
But in fact, there are certain legal obligations you may have to your customers and employees, as well as the government, that you cannot afford to skirt. If you’re on the verge of closing or bankruptcy, it may seem illogical to spend more money to hire an attorney. The truth is, it can save you money – and headaches – in the long run.
If you’re a sole proprietor, you don’t have to worry about board members or partners, but there are still a number of other considerations when you’re closing a business. It’s not as simple as just emptying your office and flicking off the lights. There are inevitably going to be certain tax requirements, you’ll have to notify creditors and you must be careful if you’re still collecting money from customers or services from vendors that you know you won’t be able to cover.
That’s basically what happened in this situation at Metro South Athletic Club, which was owned by Marguerite Canada and Bernard Goodman, who have since left town for Southern Florida.
The gym has been in the neighborhood for decades, but Canada and Goodman purchased it from the previous owners back in February of 2009.
As recently as the week prior to shuttering, the gym was collecting money for year-long memberships – some worth as much as $400. But when gym members showed up one Sunday, there was a note taped to the door, informing them that the business was closed.
While the gym had a steady clientele of loyal customers, it apparently wasn’t doing well, as evidenced by city and court records, which indicate the owners owed some $10,000 in unpaid utilities and another $84,000 to the previous owner. What’s more, they reportedly owe some $125,000 in back taxes on the building.
A representative from the company that owns the building allowed members who had left personal items in lockers to retrieve them on a recent Saturday.
An attorney who rented a condo to the couple knew weeks in advance that they were planning to leave, saying the economy was forcing them to close up shop.
The employees were reportedly given some notice, but customers were not.
The bottom line is that it is a hard fact of life that some businesses simply won’t make it. However, extricating yourself legally from the enterprise requires an experienced attorney who can help you sort through your affairs. Failing to do so could end up costing you dearly.
A Boston business law firm, The Brown Law Firm, LLC, has offices in Belmont and Boston. For a free and confidential consultation, call 617-489-0817 or contact us through this website.
Couple who shuttered Brockton gym now in Florida, By Amy Carboneau, Patriot-Ledger