WESTMINSTER — The owners of Leisure Health Spa have filed for protection under Chapter 11 of the U.S. Bankruptcy Code, saying they have 10 times as many liabilities as assets, court records show.
Company assets total $50,000, liabilities $500,000, records filed Oct. 18 at the U.S. Bankruptcy Court in Baltimore show.
The largest debtor is the former owner of the spa, Charles H. Winterstein of Westminster.
Winterstein, owner of Westminster Health Club Inc., is owed $410,000, the documents show.
Spa owners soughtcourt protection under Chapter 11 for a reorganization to put company finances in order. The owners will be required to file a plan to repay their debts that must be approved by creditors and the court.
Winterstein said he sold the Leisure Health Spa business, but not thebuilding, at Route 27 and Goldenrod Terrace, in February 1990 for $150,000 to Michael G. Owings, Kenneth J. Pilla, Wallace Owings III andTimothy Owings.
The four, stockholders in Leisure Health Club Inc., have not paid on the $150,000 note, he said.
The owners also owe him $60,000 in rent and $200,000 in future rent, records show.
Winterstein said the owners have a five-year lease.
Michael Owings and Kenneth Pilla would not comment about the bankruptcy proceedings.Owings, who is listed as company president, said he would not allow club members to be interviewed.
Wallace and Timothy Owings could not be reached.
The spa remains open, its parking lot almost full late Monday afternoon.
Winterstein founded the club in 1968 at the Carroll Plaza Shopping Center at Route 140 and Englar Road. In 1977, he moved the club to its current location.
Winterstein said he still is paying a mortgage on the 10,000-square-foot spa building.
Hesaid he had been working 65 to 70 hours a week and sold the businessto have more free time.
Winterstein, 53, also owns the Leisure Racquetball Club, a business separate from the spa and located in another building just north of the spa.
The racquetball club, which also offers wallyball and basketball, is not involved in the bankruptcy proceedings, he said.
It opened in February 1980 and has 800 to 1,000 members, he said.
When he sold Leisure Health Spa, it had about 2,000 members, Winterstein said.
The spa owners owe about 30 creditors, court records show.
The largest, besides Winterstein, are:
* Internal Revenue Service -- $22,668.04.
* Baltimore Gas and Electric Co. -- $6,589.61.
* City of Westminster for water and sewer service -- $6,339.78.
* Tevis Oil in Westminster -- $2,246.42
Local creditors listed in court documents include Westminster Glassand Mirror Inc., Westminster Fire Extinguisher Service Inc., JohnsonGraphics Inc., John Gallagher Pool Service and Supply and Dr. Antonio Medina, all of Westminster; The Phoenix at Western Maryland College; Ferrellgas of Taneytown; and Hughes Trash Removal of Hampstead.
Other creditors include the Maryland Comptroller of the Treasury; thePennsylvania State Unemployment Withholding Tax; and Universal Gym Equipment of Cedar Rapids, Iowa.
Amounts owed to these creditors were not listed in court papers.