Suddenly out of work

September 19, 2008 5:45:27 PM PDT
Customers showing up at Leisure Fitness stores in Newark, Delaware on Friday were surprised to find the doors locked. But not half as surprised as employees who have been left high and dry.

"We have closed for inventory signs up on our doors. We were told yesterday that we were not receiving our paychecks, in which we are due three weeks of wages," said director of marketing Christine Kubik.

The company sells fitness equipment, hot tubs and spas. According to Kubic, all 19 stores in Delaware, Maryland, Pennsylvania, New Jersey, D.C. and Virginia were closed on Friday, leaving 127 employees with out jobs or benefits.

"We were told by our benefits broker, our benefits have been cancelled all the way back to July 1st, although the deductions have continued to take place," Kubick said.

About 30 employees showed up at corporate headquarters in Newark, Delaware today hoping to get an explanation from owner Katina Geralis.

"How do you go from grossing close to fifty million a year and celebrating two years ago to out of business?" said parts supervisor Brian Martinenza.

But the owner called police to make sure no one entered the building, even to retrieve personal belongings.

The news is devastating and personal to Kit Smith, who's been with the company since it opened 10 years ago.

He also considered the owner a friend.

"I knew her personally. I want to know why she can't come tell me personally what's wrong. Why I can' t get my money. I live paycheck to paycheck. My mortgage is due. What am I supposed to do?" Smith said.

Wilmington Attorney Bill Sullivan, contacted by phone, says an involuntary bankruptcy petition signed by three creditors was filed on September 9th. As a result, the bank has placed a hold on the company's funds.

With that in mind, sales representative Richard Beeber wonders how the owner could do this to them and to customers.

"Yesterday they go ahead and they called us, all the sales reps, and we go ahead and we sold product to individuals that now aren't even gonna get their product," Beeber said.

Until an order of bankruptcy is filed, employees won't get paid and customers are also in limbo.

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