Dec. 15, 2020
Lifetime Memberships May Not Be For Life if Bankruptcy Intervenes
With the proliferation of bankruptcy proceedings for country clubs, golf clubs, health clubs (see DBR Nov. 12, 2020, on You Fit Health Clubs), many “members” who were enticed into what appeared to be attractive packages for so-called lifetime memberships may be sorely dismayed when they learn that an intervening bankruptcy proceeding may wipe out their so-called lifetime membership benefits.
In the recent bankruptcy case in Trenton, New Jersey (In re Sea Oaks Country Club, 20-17229 (Bankr. D.N.J. Nov. 10, 2020), Bankruptcy Judge Christine Gravelle set forth a detailed analysis of lifetime memberships in a country club, which should be a wake-up call for anyone thinking of investing large sums in such a membership during these financially difficult times for any type of membership organization. Since it is virtually impossible to obtain detailed financial information concerning golf, health and other types of membership clubs, the ruling in the Sea Oaks case cautions that one should be very careful with respect to investing in a lifetime membership unless one is willing to lose it all in the event of a bankruptcy proceeding.
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