Inside the devastating crash of the Derrimut 24:7 Gym empire – and the trail of debt which was SO big even the billionaire Lambo Guy couldn’t save it

Failed gym boss Nikolaos Solomos received a loan for $14million before it was revealed his Aussie fitness empire was on the brink of collapse.

Mr Solomos, who founded the debt-riddled Derrimut 24:7 Gym empire in 2010, handed control of his haemorrhaging business to administrators after a bailout from controversial billionaire Adrian ‘Lambo Guy’ Portelli fell through.

According to minutes of a meeting lodged with ASIC, the HM Advisory administrator advised creditors various loans linked to the company totalled $29million. 

‘[Mr Dixon] stated that the beneficiary loan accounts included a director’s loan account totalling approximately $14million and that further investigations would be undertaken with respect to the loan accounts,’ the minutes read. 

Mr Dixon also disclosed that various companies linked to Derrimut Gyms racked up its largest expenses through wages, rent and interest which led to a $2million loss last financial year.

The administrator also identified Mr Solomos’ ‘aggressive expansion strategy’ and a ‘management structure that failed to scale with the rapid growth of the businesses’ as key factors which led to the financial catastrophe. 

‘The companies experienced cash flow strain due to increasing fixed costs, trade disruptions as a result of the Covid-19 pandemic,’ the minutes read.

Mr Dixon also said a ‘potential investor was considering submitting a rescue proposal to creditors’ and a third party had ‘agreed to provide funding for trading losses’ which has allowed the numerous gyms to keep operating.

The administrator also confirmed ‘existing contracts would be honoured during the administration period’ and ‘trade creditors would be paid as normal’.

The listed creditors include the Australian Tax Office which is owed $14.9million while Bourke Street Properties claimed it was owed a staggering $59.1million. 

It was revealed in September that Derrimut 24:7 Gym faced liquidation with the tax office seeking to claw back $12.5million in debts, which include unpaid superannuation and penalties.

Mr Solomos blamed the financial woes on former staff, assuring fitness instructors in a recent Zoom meeting the debt was ‘under control’ and they would soon be paid.

Derrimut 24:7 has more than 25 gyms located across South Australia and Victoria, and about 200,000 members.

Mr Solomos has repeatedly assured on social media the gym chain is not shutting down, despite the recent closure of at least four locations across two states.

Portelli hinted that he could be stepping in to save the business after a cheeky video emerged in September, but that rescue plan fell through.

The video shared to social media by the billionaire and Mr Solomos showed Portelli arriving at a Derrimut gym in a black van.

He was seen climbing out of the van holding a cardboard box scrawled with the words ‘FIRST DAY AT WORK’.

‘Side quest,’ the caption read.

Mr Solomos fuelled more speculation when he later posted a cryptic video message thanking everyone who has supported him in the last ten weeks.

‘It’s a proud moment. I did say at the start to watch this space, that I had this covered and that we’re not going anywhere for the next 100 years,’ he said.

‘I want to thank my staff. My staff are my family, my suppliers are my family and members are my family. So, thank you to all of you.’

However, Portelli’s cooling on the buy-in has all but doomed the failing gym empire. 

News of the financial woes at the gym has prompted members to take to TikTok to vent their concerns about whether or not the gym will remain open, with some worried whether  they will be reimbursed the $299 membership fee if it closes.

Mr Solomos frequently shares social media posts which highlight his passion for poker, expensive jewellery and luxury cars.

In 2015, he survived a shooting by a balaclava-clad gunman who fired shots at the gym boss in Burnside, Melbourne.

Founded in 2010 in Melbourne by Mr Solomos, Derrimut 24:7 aims to provide a premium fitness experience with state-of-the-art facilities and personalised training plans.

Membership costs $9.95 per week on direct debit or $299 upfront for 12 months.