F45 founder Adam Gilchrist was bankrupt while launching cult gym now facing collapse amid share drop

The founder of Australian-based global fitness empire F45, who recently stepped down from the company after its share price plummeted more than 60 per cent, was officially bankrupt when he launched the cult gym.

Adam Gilchrist received a $10 million golden handshake two weeks ago when he resigned as chairman and CEO of F45 Training following market bloodbath on the New York Stock Exchange.

The ‘world’s fastest-growing fitness business’, which was worth more than half a billion dollars at its height with a celebrity cult following and global ambassadors including David Beckham, had less than $20m cash according to its last filing.

Mr Gilchrist’s $10m payout cost F45 more than half of its funds at a time when up to 110 corporate employees lost their jobs and more staff were warned they were on the chopping block.

The company is also facing potential lawsuits with five heavyweight class action firms in the US calling for investors to express interest in possibly joining suits if it can be proved F45 misrepresented itself to investors. 

Mr Gilchrist’s three-storey glass and concrete beachfront home in Freshwater in Sydney’s Northern Beaches was listed for sale after the share plunge and was quickly snapped up on August 13 for more than $14 million before it was to be auctioned.

As more details of his lavish lifestyle since establishing the gym juggernaut continue to emerge, Daily Mail Australia can exclusively reveal how the 44-year-old filed for insolvency the year before he co-founded F45 with his former rugby union team mate, Rob Deutsch in 2012.   

Mr Gilchrist – who hobnobbed with celebrities and netted $500 million overnight when actor Mark Wahlberg invested in F45 a year ago – was made bankrupt in April 2011.

At the time, he lived in a comparatively shabby red brick unit, albeit with Elizabeth Bay views, with a tiny kitchen and one bathroom.

Mr Gilchrist was still declared bankrupt and under a three-year mandatory ban from directing a company when F45 was registered as an Australian Business in March 2013.

There is no suggestion Mr Gilchrist acted contrary to the terms of his bankruptcy by founding the business. 

Documents obtained by Daily Mail Australia show the discharge date for Mr Gilchrist’s bankruptcy on the Australian National Insolvency Index was March 5, 2014.

Mr Gilchrist would not act as an F45 director until six years later but by then F45 was a booming fitness craze with gyms opening across the country attracting Australian athletes and celebrities including rugby league players Nate Myles, Jarryd Hayne and Willie Tonga and model, Nicole Trunfio.

So-called celebrity trainers such as former NRL player Daniel Conn became the face of what turned into the country’s fastest growing group training franchise, especially in Sydney’s Eastern Suburbs. 

Wallaby stars Stephen Hoiles, Adam Ashley Cooper and Mitchell Chapman opened an F45 gym in Coogee, but it wasn’t just for men: three quarters of F45’s customers were female.

Mr Gilchrist used the money he made from F45 to amass a property portfolio across Australia, including an apartment block in Lennox Head and a beach pad in Byron Bay.

In 2019, he paid $14million for the Freshwater beach home under his wife’s maiden name, Eli Havas, the house selling last weekend ahead of auction at an undisclosed amount setting a record for the area. 

When Mark Wahlberg invested $450m into F45 and it was floated on the New York stock exchange in July last year, the stock price soared to $17.28.

Mr Gilchrist bought an $18.85m Byron Bay colonial mansion at prestigious Wategos Beach just weeks later, smashing local property records.

F45 attracted the endorsements of high-profile global celebrities including David Beckham, Magic Johnson, Greg Norman, Cindy Crawford, actor Mario Lopez, singer J Balvin and DJ Steve Aoki. 

The company’s cult following was based on its 45-minute group training workouts that combined resistance, metabolic and cardio movements in a fun and accessible environment.

F45 was claimed to be the world’s fastest-growing fitness network by mid-2021, with 1,555 studios and 2,801 franchises across 63 countries, and aimed to ultimately have 23,000 studios worldwide.

Mr Gilchrist had at the time been an F45 director for just a little over a year after stepping into the role in March, 2020.

Luke Istomin – best known as Hugh Jackman’s personal trainer – and Robert Deutsch had acted as directors from 2013, before stepping down again in 2015 and 2020, respectively. 

Mr Gilchrist was a director for little more than two years before he resigned from the company earlier this month.

As outgoing chairman, he said he was ‘forever grateful’ to the franchise and thanked staff, investors and members for their support.  

‘To the staff that have worked tirelessly since our inception, you have been incredible in your efforts, and I thank you for all of your support,’ Gilchrist said in a statement. 

‘To the investors that have joined us along our journey, I thank you for your commitment to F45.

‘Lastly, I am forever grateful to our franchisees who deliver the world’s best workout each day to F45 members around the world.’ 

Mr Gilchrist’s payout is said to top $10.1 million, and to include 12 months’ rent on his Florida mansion and 18 months of health insurance for his family, despite the company’s share price crash. 

Even before the latest plunge, F45 stock had fallen sharply since it went public with an initial offer of $22.89 per share, bottomed out at $US1.35 and at the time of writing was sitting on $2.31 a share. 

F45 confirmed it would lay-off almost 45 per cent of the company’s corporate staff (110 employees) to reduce its selling, general and administrative expenses. 

The company said the change in ‘macroeconomics – national output, unemployment rates and inflation – has forced a restructuring of the company’. 

‘We are taking the necessary steps to right-size our business in light of shifting macroeconomic and business conditions,’ Chief Financial Officer Chris Payne said. 

‘While we expect growth to continue, market dynamics are having a greater than expected impact on the ability of franchisees to obtain capital to develop new F45 locations. 

‘In addition, recent share price performance has made it challenging for franchisees to utilize financing facilities announced earlier this year.’ 

Mr Deutsch said he was devastated to hear what had happened since he ‘transitioned out’ of the company with a $US2.5million ‘transaction bonus’ two-and-a-half years ago.

He had also owned a formidable property empire worth more than $20m, including a beachfront family home in Bronte which sold last year for $17.7m. 

‘Never in my wildest dreams could I have imagined this,’ Mr Deutsch wrote on Instagram.

‘When I exited, and sold out of F45, I left a healthy, phenomenal, beast of a business, all the way from the company culture to the heart beat of the business … the workouts. 

‘F45 was special. I genuinely hope all of the 110 laid-off staff, find happiness and opportunities elsewhere.’