Company and Insolvency — Winding Up of the Holding Company of Well-known Gym Chain “Physical”
In Re Physical Beauty & Fitness Holdings Ltd [2025] HKCFI 604, Jeffrey Tam (with William Kwok) represented the successful Petitioner in his Petition against Physical Beauty & Fitness Holdings Limited (the “Holding Company”), the holding company of the well-known gym chain “Physical”, which is a BVI company that holds 13 Hong Kong subsidiaries (together, “Group”). The Group’s abrupt closure of business was widely reported by the media and has stirred up much public concern. Numerous complaints against the fitness centers operated by the Group were reportedly lodged to both the Consumer Council and the law enforcement agencies.
The Petitioner in question is a creditor who advanced a loan in the sum of HK$1,500,000 to the Holding Company and served a statutory demand to the same in respect of the loan on 14 October 2024. The Company failed to comply with the said statutory demand and was deemed insolvent.
Jeffrey Tam first secured the appointing of provisional liquidators over the Parent Company at the hearing before the Companies Judge on 15 January 2025, who were hence able take control over the Holding Company and some of its subsidiaries to make prompt investigations into their financial affairs before the winding up order was made.
On 27 January 2025, the Court noted from the financial information supplied by one of the provisional liquidators that its accumulated losses carried forward amounted to HK$96,080,215.87 and HK$96,099,917.87 as at 31 December 2023 and 5 September 2024 respectively. In the circumstances, the Court was of the view that the Company was clearly insolvent on balance sheet terms. Moreover, since there was also no dispute that the 3 core requirements for the Court to exercise its jurisdiction to wind up a foreign company are satisfied, the Court made the usual winding up order against the Company.
Jeffrey Tam
“Jeffrey is a measured and thoughtful advocate.”
Chambers and Partners Greater China Region Guide 2025,
Commercial Dispute Resolution, Band 4
Jeffrey Tam, FHKIArb, attended St. Anne’s College at the University of Oxford for a Bachelor of Civil Law (BCL) on a scholarship after reading law at the City University of Hong Kong. He is also named as a “Leading Junior” for Commercial Disputes in Legal 500 Asia-Pacific 2022-2025.
Visit Jeffrey’s profile for more details.
This article was first published on 12 February 2025.
Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case. The photographs which appear in this article are included for decorative purposes only and should not be taken as a depiction of any matter to which the case is related. The views and opinions expressed in this article/material are solely those of the members authoring it and do not necessarily reflect the official policy or position of Denis Chang’s Chambers, or of any other member or members of Denis Chang’s Chambers.