Foul: Sports & Fitness hit with default judgments

Sports & Fitness Management Corp., which once ran eight Healthquarters Fitness outlets, was slapped with default judgments totaling $8.4 million.

Meanwhile, a federal investigation started three years ago into the investment activities of Mark Beckham, the one-time head of Sports & Fitness, continues.

Beckham's attorney, David Helfrey, of Helfrey, Simon & Jones in Clayton, said he recently spoke with Assistant U.S. Attorney Rosemary Meyers about the matter after not hearing from any federal investigators in more than a year. Helfrey declined to say what the two discussed.

The investigation has been under way since at least Sept. 26, 2002, when the Federal Bureau of Investigation sent a letter to some people who invested with Beckham or one of the companies he formed, saying the agency was examining Beckham and his related businesses "for possibly misrepresenting the nature of investments they sold." On Sept. 29 this year, the FBI sent a letter to some investors saying the case remained under investigation.

Beckham's business dealings also had been under investigation by the Missouri secretary of state's office. Mary Hosmer, a spokeswoman for the secretary of state's office, said the state investigation was referred to federal authorities. An FBI agent referred questions to the U.S. attorney's office in St. Louis; officials with the U.S. attorney's office said they were barred from discussing any matter under investigation.

Helfrey said Beckham is working in the St. Louis area but that his client would not be available for comment. Beckham, 50, lives in Foristell.

In October, Sports & Fitness, which was based in St. Louis County, was hit with default judgments in St. Louis County Circuit Court totaling $8.4 million.

The default judgment in Sports & Fitness' receivership came Oct. 28 from St. Louis County Circuit Judge Robert Cohen, more than three months after the receivership in the case closed and assets of Sports & Fitness had been sold. Union Planters Bank, Sports & Fitness' largest secured lender, which originally approved loans totaling about $16 million to the company, sought the default action, which could give the bank standing in the event any other Sports & Fitness assets surface, according to people familiar with the case.

Regions Bank, which acquired Union Planters, inherited the package of loans.

Sports & Fitness had been in receivership since April 2002, when its creditors, led by Union Planters, took over management of its health clubs. ATEC Liquidations Inc. was the court-appointed receiver. The receivership started when one of Sports & Fitness' related companies, America's Exposition Park at Lake St. Louis defaulted on its Union Planters loans. In the months before ATEC took over management at Sports & Fitness, the company also lost control of three area golf courses it had managed: Crystal Highlands in Festus, Incline Village in Foristell and Aberdeen Golf Club in west St. Louis County.

While ATEC operated Sports & Fitness, it sold off all the assets it had under its control.

The sales generated $13.7 million for the Sports & Fitness receivership, which distributed $10.7 million to secured creditors, according to ATEC's report to the court. ATEC spent another $825,000 on commissions and other costs in selling assets. ATEC also paid $1.9 million to investors in K40, a real estate partnership Beckham set up.

ATEC generated a $60,500 profit running the Sports & Fitness business. However, the funds it recovered were still not enough to pay the secured claims, including those from Regions Bank.

Jeff Heuer, an attorney with Blackwell Sanders Peper Martin, filed the default action on behalf of Regions Bank. The judgment calls for defaults against each of 11 Sports & Fitness businesses on three banks notes and guarantees: one for about $6 million in unpaid principal, interest of $1.4 million as of Oct. 27, and attorney fees of $150,681; a second note of $577,419 in principal, interest of $218,156 through Oct. 27, and late charges of $8,894; and a third note of $33,271 in principal and $10,510 in upaid interest.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.