Can we do anything to recoup our loss if we had a credit of over $600 with a gym that changed names and owners?

The previous owner has a position with the new gym. They say they have no record of our credit since it was with the previous gym.

Asked on July 6, 2014 under Business Law, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

The most basic question is whether the new owner bought the "corporate" structure of the old gym--that is, if the old gym had been set up as a corporation or LLC, did the  new owner buy the corporation or LLC?--or did he simply buy the assets (such as equipment, customer lists, etc.) and take over some, but not all contracts (such as the building lease)?

If the new owner bought the business entity, then it's still the same business, even if a new person owns it and changed it's name. It's still bound by all the same obligations and still owes to others, and is owed by others, everything the "old" business was. In this scenario, you would be owed your credit. (Of course, as a practical matter, if the gym will not give you that credit, you'd have to sue to get it, which may or may not be economically worthwhile.)

If however the business entity is not the same--the new owner bought the assets, took over the lease, and started a new business--then the new business and its owner do not owe you anything. It would be like if a taxi or limosene driver bought a car from another taxi/limo company named "Rob's Rides"; if Rob's Rides had owed some customer or account a credit, the guy who happened to buy a car from Rob's--even if that had been Rob's only car--does not owe anything to one of Rob's old customers. You could in theory try to  recover the money from the old business, if it were an LLC or corporation and if it's still in business; or if the old business/gym had not been a corporation or LLC but rather had been a sole proprietorship, you could try to recover it personally from the old owner, since in a sole proprietorship, the business and proprietor are legally one and the same.

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