The Taiwan Taipei District Court ruled on Wednesday that the Alexander Health Club Group, which once ran the leading Taiwanese chain of health clubs, must pay over NT$256 million (US$9.19 million) to its former members for shutting down all of its 21 branches in December 2007 without prior notice.
The ruling comes 14 years after the Taipei-based Consumers' Foundation filed a class-action lawsuit in January 2008 on behalf of 8,564 former members of Alexander Health Club Group, seeking NT$582 million in punitive damages from the owners of the company.
The company's islandwide empire of 16 Alexander fitness centers, four Aegius Clubs, and one Jun Spa was shut down on Dec. 10, 2007.
The court pointed out that the company's Alexander Health Club needs to pay NT$186.02 million, while its Aegius Clubs and Jun Spa needs to pay NT$57.28 million and NT$12.92 million, respectively, amounting to a total of over NT$256 million.
However, the verdict can be appealed.
The court said consumers had the right to receive damages as the branches had either dissolved or had their registration revoked and were not able to provide the services stated in their contractual agreements.
The whole case originated because Candy Tang (???), founder of the group, and her sister Tang Hsin-ru (???) had continued to sell memberships at a discount to thousands of people during 2007, when the company was undergoing financial difficulties and on the brink of collapse.
The Tang sisters were indicted on Jan. 17, 2008 on charges of fraud and breach of trust, and were sentenced in 2011 to one year and 10 months and one year and eight months, respectively. They were later released on parole.
The Alexander Health Club Group, established in 1982, was once the leading Taiwanese chain of health clubs, with fully booked classes taught by top instructors, before it collapsed because of hasty expansion and a lack of awareness of changes in the overall business climate.
The Aegius Clubs, launched in 2000, was targeted at upper-class business people.
Source: Focus Taiwan News Channel