Local World Gym Owner Files Bankruptcy

In March, you may have read our reporting on the financial troubles of Rhett Garner of Bella Vista, local operator of a World Gym fitness franchise who suddenly closed three of the locations after being sued for unpaid rent.

Apparently, those problems have proven too much for Garner, who filed preliminary paperwork March 25 in the Western District of Arkansas for Chapter 7 bankruptcy protection.

In a more detailed bankruptcy petition filed April 7, Garner lists his assets, liabilities and unsecured creditors.

He posted assets of $655,250 ($500,000 in real property and $155,250 in personal property) and liabilities of $10.2 million. The filing also shows Garner’s monthly take-home pay at $2,550 and monthly expenses at $5,250.

Unsecured creditors are mainly the thousands of former World Gym members who are each owed a fair amount of money from broken membership contracts. 

Fayetteville-based Signature Bank of Arkansas also holds an unsecured claim for $2.7 million, according to the filing. Other creditors include the Arkansas Department of Finance and Administration, Washington County Tax Collector and the U.S Department of Labor.

Garner is being represented by bankruptcy attorney Jill Jacoway of Fayetteville. Springdale attorney William (Bill) Clark Jr. has been appointed the trustee in the case.

Garner was sued Feb. 17 by Bentonville developer Mike Charlton for unpaid rent at three of the five World Gym locations he operated in Northwest Arkansas.

The three locations — two in Bentonville and one in Lowell — closed abruptly March 24. Garner and his wife, Tania, known as “Tinkey,” had been leasing those buildings from Charlton for several years. Charlton claims that, as of Jan. 19, Garner and related business entities owed a combined $476,422 on monthly lease payments at the three Benton County locations.

The Garners also own World Gym locations in Springdale and Fayetteville and those businesses remain open.

Benton County Circuit Judge John Scott had set a bench trial in the matter for Oct. 12, but he has since ordered that case closed until the bankruptcy issue is resolved.