NJ Bankruptcy lawyer provides guidance on Life Time Membership Clubs. What happens when a lifetime membership club files bankruptcy?
If a Lifetime Membership Club files bankruptcy and the club is sold, you may not have a membership.
As an example, a golf club (Sea Oaks Country Club – NJ) filed for Bankruptcy. The business assets were sold.
In this case, the purchaser bought the assets during the bankruptcy. The new owner is not obligated to pay back or honor the existing lifetime memberships.
What was the result?
- 67 individuals paid $50K to $60K for their lifetime membership (WOW approximately $4 million).
- Keep in mind, when a business is sold during a bankruptcy, the results are very different. The debtor probably will not assume existing membership contracts.
The Golfers hit a “DUFF” and buyer scores tremendously.
The new Golf Club owner “ACED” his shot.
All the lifetime club memberships had no rights to the Club. You should know what happens to your lifetime membership in a club that files bankruptcy. As more and more businesses file bankruptcy, it is important. Do you want to become a stock holder of a company that goes out of business? Essentially, when you pay your lifetime membership fee, you are a financial part of that club.
Be careful when you sign up for those lifetime club memberships. Review the risks with a bankruptcy lawyer near you.
If you adverse to risk, you should not sign a lifetime contract. A monthly fee contract is better.
I am a NJ Bankruptcy Lawyer. Call me for a free bankruptcy consult. I will provide bankruptcy help and bankruptcy protection.