Recovering Membership Fees After a Business Closes

[spetsacdc]

Hello,

I have some information about an unethical business man who recently closed his Knoxville, TN business and took customer's money

Late last year the indoor sports arena named the Thunderplex was closed without warning. The Thunderplex was located in a leased building at 727 Lovell Rd. It was a popular spot for kids and adults to participate in sports leagues such as soccer, volleyball, and even dodgeball.

Last fall I decided to sign up for the dodgeball league after having played the preceding spring. I recruited some of my friends to play and our team of unwealthy teenagers scrounged up $280 to join the league ($40 a piece).

After playing the second game we found out through a phone call from a former referee that the Thunderplex was closed.

He was unhappy that it was suddenly shut down because he lost his job without warning. Because of this he gave me the name and cell phone number of the Thunderplex's owner.

I have called the owner multiple times and it has progressed from him "Not having an answer, call back next week" to him ignoring my calls.

It is obvious that the owner of the Thunderplex waited until right after a new league started to close the complex. There is no telling how many people lost their money to this unethical business owner.

Although I have only personally lost $40 in this scam, I feel responsible for getting my friend’s money back since I told them how great the league was.

I have been looking into using small claims court to get the money back, but I have a few questions:

1.) The owner of the business lives in Nashville, TN (4 hours from Knoxville), since the business was in Knoxville and that is where the conflict occurred, will it be held in Knoxville small claims?

2.) It is $102 to take someone to small claims court according to the clerk I called. Are there any other fees?
3.) My evidence includes records of a check I wrote for my $40, a receipt for $280 for the league, and the word of the referee (if he will agree to testify). Do I have a chance to win the case?
4.) Can I sue for $280+the court costs? (I think I read that I can)

Thank you for your time.

[Mr. Knowitall]

You can normally only sue for your own losses.

Whether or not you could successfully recover the money is not something I can answer on the basis of the facts provided. Health clubs are notorious for signing up new members up to the moment they shut their doors - the owner may be protected by a corporation, or the business may have gone into bankruptcy, for example.

[spetsacdc]

Thanks for helping me out.

What would it mean if he went into bankruptcy? He has a $300,000 house and was on a business trip this weekend so I do not think he is broke...

[Mr. Knowitall]

He doesn't have to be broke for the business to be bankrupt, nor for him to be protected by the corporate shield. If the business is bankrupt, you would be an unsecured creditor and would make a claim through the bankruptcy court, which assuming a dissolution would be paid out of what (if anything) is left of the estate after secured creditors are reimbursed. Unsecured creditors are often lucky if they get pennies on the dollar.

[spetsacdc]

Do you know how to tell if the business went bankrupt?

Thank you

[Mr. Knowitall]

Check with the bankruptcy court that has jurisdiction over the business. Note, however, that many businesses shut down (and fail to pay their creditors) without going bankrupt.