The former chief executive of Boston Sports Clubs has been ordered to pay more than $6 million after a Massachusetts judge found he approved a plan to bill members during the COVID-19 shutdown and obstructed their attempts to cancel contracts.

$6 Million Judgment Handed Down

Patrick Walsh, who once led parent company Town Sports International LLC and its affiliates, was ruled personally liable for $3.8 million in restitution plus $2.2 million in interest, according to a judgment filed Monday in Suffolk County Superior Court by Justice Hélène Kazanjian.

The decision followed a December bench trial in which Walsh argued he believed he had reached a deal with then-Attorney General Maura Healey—now governor—that would shield him from litigation if the company let members cancel online. The judge dismissed his testimony as “not credible.”

Pandemic, Debt, and Desperation

At the pandemic’s onset, Town Sports was already on the brink, staring down a $177.8 million debt payment due in late 2020 with just $19 million cash in hand. Walsh and other executives laid off most of the company’s 9,000 workers in March 2020 but still charged members for April, despite having no clear path to reopening.

The chain—once operating 30 locations in Massachusetts and dozens more in New York, D.C., and Pennsylvania—admitted in filings it could not predict when gyms might reopen. Yet customers were blocked from canceling in person, by phone, or online.

Complaints poured in, prompting the attorney general to intervene in April 2020. Members were eventually offered credits instead of refunds, but even those credits were inconsistently applied. Roughly half of 103,000 members received some form of relief.

Judge Balances Liability and Circumstances

While Justice Kazanjian found Walsh engaged in “unfair or deceptive acts,” she declined the attorney general’s bid to tack on an $8.5 million civil penalty or claw back Walsh’s $1.5 million retention payment. She noted that Walsh’s conduct unfolded during “a period of worldwide uncertainty” and that other corporate actors also shared blame.

Still, she concluded Walsh “at the very least” approved decisions that violated consumer protection laws, making him personally accountable.

Attorney General Celebrates, Walsh Pushes Back

Attorney General Andrea Joy Campbell praised the ruling:
“After years of litigation and a multiweek trial, I am proud of my team for securing meaningful relief for Massachusetts consumers who were unfairly charged for services they could not use.”

Walsh’s attorneys countered that he acted in good faith amid chaos, accusing prosecutors of “hindsight bias.” They argued he believed shutdowns might only last weeks and that business could bounce back quickly.

Legal Teams

The commonwealth was represented by Matthew Lashof-Sullivan, Richard Dohoney, Peter Downing, Jim Sweeney, and Ann Lynch from the attorney general’s office. Walsh was defended by Thomas T. Reith, Massimo F. D’Angelo, Ofer Reger, and Avery Nagy-Normyle of Blank Rome LLP.

Town Sports International itself filed for bankruptcy in September 2020, leaving Walsh the lone defendant standing in the case.