Physical, a fitness chain with a 38-year history, recently announced the ‘temporary closure of all branches,’ sparking widespread concern and worry among customers and employees. To delve into the legal issues behind this incident, Ming Pao and TVB News interviewed our partner Roger Lam, a former Customs Inspector, to get his professional insights on the matter.

Mr. Roger Lam has extensive regulatory and legal practice experience, particularly in handling cases involving the Trade Descriptions Ordinance. In the interview, Lam focused on explaining the legal implications of the 'temporary closure of all branches' decision by Physical and the possible effects it might have. He pointed out that the term ‘temporary closure of all branches’ mentioned in the announcement is legally ambiguous. Lam stated, ‘The winding up of a limited company should follow certain procedures through the Companies Registry, and the wording in the announcement might confuse customers and, in some cases, potentially affect the rights of existing customers.’

Lam further noted that the way a new investor takes over could have different impacts on the rights of current customers. For example, ‘If the original company is acquired by another company and renamed, it could mean that the original company’s responsibilities will continue; however, if the company goes through bankruptcy liquidation and its assets are sold to a new company, the new company may not be liable for the old company’s debts and responsibilities.’ This is particularly important for customers who have purchased services but have not yet fully used them.