Bailey also accused the company of sloppy bookkeeping, saying it was “evidently clear” that it had failed to maintain adequate books and records as required by law.
A personal trainer, Istomin has worked with celebrities including Hugh Jackman, Leonardo DiCaprio and Nicole Kidman.
He also developed F45’s regime of 45-minute high-intensity interval and circuit training classes based on the motto: “no mirrors, no microphones, no egos”.
Istomin did not respond to that The Sun-Herald‘s questions. But he has spoken about the turmoil engulfing F45, the company he founded in 2013 with Rob Deutsch, but left in 2016. Istomin later set up his own fitness business, Reunion Training.
Shares in F45, which is backed by actor Mark Wahlberg, plunged on Wall Street in late July after the company slashed its expansion plans, cut jobs, and announced chief executive Adam Gilchrist was stepping down.
“I think they bit off more than they can chew,” Istomin said in response to the turmoil inside F45.
The financial troubles engulfing Istomin’s gym business come as the United Workers Union, which represents health and fitness professionals, called for stronger regulation of labor hire licensing and the fitness industry.
UWU allied industries director Godfrey Moase said it was a violation of an employer’s obligations to ask staff to forego wages due to cashflow problems: “If you can’t afford to pay wages, then you can’t afford to be in business.”
Bailey told creditors he was investigating whether Reunion Training chief executive Simon Philis was a shadow director given his influence over the company’s affairs.
Philis told The Daily Mail last year that he had lost 29 kilograms in 14 months following the company’s exercise and nutrition program.
Bailey said he believed the company had been insolvent since its incorporation in February 2020, incurring continuing losses and owing more than half a million dollars in federal and state taxes.
Istomin may be liable for the company’s entire debts of $2.6 million if it is shown the company was insolvent since it was founded and if he was responsible. Philis might also be liable if he is shown to be a shadow director.
“It is my intention to briefly report the significant breaches identified within this report to ASIC,” Bailey said.
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