The bankrupt former sports business SportsQuest, which was once billed as an Olympics-caliber training facility, must pay almost $1 million to former members who joined the Chesterfield club to work out.
The Virginia Attorney General’s Office said Friday that it had reached a settlement with SportsQuest LLC for its alleged violations of a state law that governs the sale of memberships to athletic facilities.
According to the Attorney General’s release, judgments for a total of $946,000 have been entered against SportsQuest LLC, along with $50,000 in civil penalties. That money, if collected, would go toward paying restitution to customers who purchased memberships from SportsQuest.
But given that the LLC is in the midst of a Chapter 7 bankruptcy liquidation, it’s unlikely there will be any checks coming just yet. The settlement must also be approved by Chesterfield Circuit Court.
According to the case, the company sold memberships and accepted hundreds of thousands of dollars from customers for a fitness facility on Genito Road in Midlothian that was never built. It also then failed to refund money to customers in a timely fashion when it was kicked out of a makeshift fitness center on Oak Lake Boulevard.
SportsQuest was plagued by delays from the start and collapsed when there was no money to pay staff.
Attorney General spokesman Brian J. Gottstein said by email Friday, “The settlement merely obligates the company to pay, it does not mean that there are funds to meet the obligation or create funds to do so.”
The Attorney General’s office said it has recovered $105,000 from Western Surety, which held bonds on SportsQuest for the never-built facility. That money will be paid as restitution.
The state has received $550,000 in claims from former SportsQuest customers who are awaiting refunds. The Attorney General’s office said customers who filed claims should expect only partial refunds.
The deadline to file a claim for a refund is Jan. 14. Instructions for doing so are in this PDF.
The Attorney General’s office might pursue cases against former SportsQuest principals in an attempt to recover more funds.
“The commonwealth is considering and exploring all possible legal theories to collect on the judgment,” Gottstein said.