The collapse of billionaire Adrian Portelli’s bid to rescue Derrimut 24:7 Gym has left the embattled fitness chain’s future hanging by a thread, as insolvency firm Rodger Reidy moves to sell off key assets amid spiralling tax and creditor debts.
Three major Derrimut-owned properties, its Thomastown and Ravenhall gyms and the head office in Derrimut, are now being offered vacant to buyers, with expressions of interest due by December 4.
The sites, owned by entities linked to founder Nikolaos Solomos, are expected to fetch about $30 million, though insiders say that will barely dent the company’s estimated $30 million in combined debts.
The Australian Taxation Office (ATO) is seeking to recover $12.5 million in unpaid taxes, superannuation and penalties, with supporting creditors owed a further $2 million, including Life Fitness, Melbourne United Basketball, ReturnToWorkSA, AGL, and Bourke Street Properties.
In court on Friday, the Federal Court adjourned the ATO’s latest wind-up hearing to November 24, marking the fourth delay in the case.
Lawyers for creditors expressed frustration, saying there was “no evidence” the company could repay its debts or secure refinancing.
Hours later, Portelli announced on Instagram he had abandoned his rescue plans, saying, “Unfortunately, we couldn’t see eye to eye and make the deal work… I truly wanted to help save Derrimut gym and keep such an iconic name alive.”
The decision is another blow for Derrimut’s roughly 200,000 members, who have complained about declining facilities, poor hygiene and refund delays.
WorkSafe has reportedly raised concerns about basic upkeep, including shortages of toilet paper and hand towels.
An earlier investigation by The Age revealed the company had failed to pay taxes, staff superannuation and suppliers, while Solomos allegedly withdrew millions in personal expenses, including $5,000 weekly allowances and luxury cars for staff.
Derrimut has already closed several branches, including Angle Vale, Munno Para and Noarlunga, and is fighting eviction from its Melrose Park gym in South Australia.
Finance sources estimate Solomos would need at least $30 million to settle debts and stave off liquidation.
Source: The Advertiser.
