FAYETTEVILLE (KFSM) – The manager of World Gym, who had a lawsuit filed against him alleging he owed more than $475,000 in late rent, has filed for bankruptcy, according to court records.
Rhett Garner D/B/A/ of World Gym filed for Chapter 7 Bankruptcy on March 25 in U.S. Bankruptcy Court for the Western District of Arkansas in Fayetteville, court documents state.
Garner notified the Benton County Circuit Court of his bankruptcy filing on March 31, requesting that the court honor an automatic stay entered by U.S. Bankruptcy Court for the Western District of Arkansas.
In most instances, the filing of a bankruptcy case automatically stays certain collection and other actions against a debtor and the debtor’s property, court documents state.
Under bankruptcy laws, if someone tries to collect a debt or take other action against an individual who has filed for bankruptcy, that person trying to collect the debt may be penalized.
A lawsuit filed on Feb. 17 in Benton County Circuit Court alleges that Garner owes Charlton Development Company several thousand dollars.
According to the lawsuit, the Bentonville and Lowell World Gym facilities are rented from Charlton Development Company at the following rates:
- Southeast J Street facility – $11,000 per month
- Southwest Regional Airport Boulevard facility – $15,000 per month
- Lowell facility – $45,000 per month
The lawsuit states that the following amounts are owed in late rent payments:
- Southeast J Street facility – $24,347
- Southwest Regional Airport Boulevard facility – $128,739
- Lowell facility – $323,336
On Dec. 16, 2004, Garner gave a man identified as Michael Charlton a $200,000 promissory note with six percent interest payable over 10 years to purchase equipment for World Gym, the lawsuit states.
As of Feb. 16, the promissory note is in default, and $54,644 is due on it, according to Charlton.
Charlton also states in the lawsuit that Garner has “refused to pay this sum (rent) despite repeated demands for payment.” Garner has told Charlton he cannot fulfill his payment obligations, according to the lawsuit.
World Gym closed its doors on March 24 at the Bentonville and Lowell facilities.
