A.G. Schneiderman Sues David Barton Gyms Following Sudden Closing; Seeks Refunds For Members

News from Attorney General Eric T. Schneiderman

February 15, 2017

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Upscale Health Club Shut Doors And Filed Bankruptcy; No Prior Notice Or Refunds Provided To Members

NEW YORK—Attorney General Eric T. Schneiderman announced today a lawsuit against Club Ventures Investments LLC d/b/a David Barton Gyms (DBG) and related entities that own and operate four David Barton Gyms in New York City. The suit alleges that DBG suddenly closed its doors on December 21, 2016 without any prior notice to members or staff and failed to make refunds to those consumers who prepaid for services not provided. 

According to the lawsuit, over 5,000 members enrolled in these four New York City health club facilities, many of whom had paid hundreds, if not thousands of dollars, in advance for membership and training packages.  At least one consumer complained that he had paid in excess of $15,000. Although Defendants were well aware that the health clubs were in a financially precarious position, they continued to enroll new members and accept payments for future services up through early December 2016.  The health clubs failed to provide any advance notice to members that they were going to close.  The clubs subsequently filed for bankruptcy.

“As alleged in our complaint, David Barton Gyms acted irresponsibly and left their members without any recourse to recover lost payments, causing some to lose thousands of dollars,” said Attorney General Schneiderman. “Health clubs must own up to their responsibilities to their members.  They cannot be open one day and closed the next without proper notice to their membership, and must provide refunds for services not provided.” During the early hours of December 21, a security company retained by DBG changed the locks on the doors at each facility and affixed a notice to the outside doors stating, in part: “Club Ventures, which owns and operates certain David Barton Gym facilities, is discontinuing operations at facilities in New York, Boston, Miami, Chicago, and Bellevue, effective immediately.” Consumers who showed up to work-out were instead left out in the cold. DBG was promoting itself on social media up to two days before it closed.

The Attorney General’s office is seeking full restitution and an accounting to determine to whom the health clubs owe money. The office will closely monitor the bankruptcy proceedings and take whatever actions are warranted to protect the interests of the consumers.   

The four Manhattan David Barton Gym locations were: 30 East 85th Street, 4 Astor Place, 666 Greenwich Street (also referred to as 152 Christopher St.), and 656 Sixth Avenue.  Additional facilities closed at the same time were in Chicago, Miami, Boston, and Bellevue WA. 

Club Ventures and the other corporate defendants purchased the facilities from David Barton, the original owner, in 2013.

Consumers who were DBG members and believe they are owed a refund are urged to file a complaint online or call 1-800-771-7755.  Consumers who paid by credit card are also advised to contact their credit card company and dispute the charges due to the failure of the gyms to provide the contracted services. 

The case is being handled by Assistant Attorney General Herbert Israel, Special Assistant Attorney General Stephen Mindell, Deputy Bureau Chief Laura J. Levine, and Bureau Chief Jane M. Azia, all of the Consumer Frauds and Protection Bureau, and the Executive Deputy Attorney General for Economic Justice Manisha M. Sheth.