Due to a large gap between its assets and debts, a posh boxing gym is facing closure as it files for a torturous bankruptcy.
The BXNG Club, a storied luxury boxing gym with four sites throughout San Diego, has announced its bankruptcy due to mounting debt from its explosive growth in recent years.
The BXNG Club opened the majority of its facilities in the previous five years, positioning itself as the “fastest-growing combat sports and fitness brand” in Southern California.
Due to a $600,000 discrepancy between the gym’s assets and debts, the owners filed for Chapter 11 bankruptcy late last month.
Its assets are reportedly $5.1 million, but its obligations are $5.7 million, according to court documents.
With a fifth facility set to open in Los Angeles and one of their current locations in North County facing eviction, the premium gym’s ability to remain solvent is called into question due to its ongoing bankruptcy.
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A year after the opening of its most recent branch in Rancho Bernardo in March 2023, The BXNG Club started asking for further investor funding to help achieve its objectives of “strategic expansion.”
As of June 26, the BXNG Club in Rancho Bernardo had accrued $95,403.99 in delinquent rent, suggesting that it was starting to experience financial difficulties.
In a phone conversation with FOX 5/KUSI, Jason Turner, an attorney for The BXNG Club, stated that the objective of the Chapter 11 bankruptcy is to “reorganize, restructure and come out of bankruptcy stronger than before,” protecting the company’s assets while “continuing to support its members.”
Founder and CEO Artem Sharoshkin told FOX 5/KUSI in a statement following publication that “economic headwinds and pandemic consequences” had forced them to declare for bankruptcy, affecting companies in every sector.
According to Sharoshkin, “our organization is under a great deal of pressure due to a declining membership base, rising utility costs, and the overall increased cost of operating in California.”
Litigation attorney and bankruptcy expert Kent Sharp noted that it may likely not be until next spring when the creditors of the business and the courts approve a restructuring plan, which still have the potential to close branches if necessary.
Court documents state that The BXNG Club’s attorneys and creditors will hold their first conference call on July 23 at the end of this month, FOX 5/KUSI News reported.