With Swim Club Stakeholders At Odds, Monarch Membership Holders Told Their Passes Will Be Honored at NoLibs Pool
Breaking up with a financial partner who you feel wronged you can be as painful as a bitter divorce. Last week, news spread that two men were locked in a business break-up at the Monarch Swim Club in Northern Liberties, with both men claiming the right to sell memberships to the swim club. In divorce it’s usually the children who suffer. In this instance, the children who are suffering are the folks who have already paid for their 2017 season passes.
Spirit News has been following the legal dispute between clashing North Shore and Monarch Swim Club stakeholders Brian Nagele and Tim Lu for the past two weeks.
According to the suit, Nagele entered into an agreement to sell Lu 49 percent of the pool club’s ownership in 2016. The agreement outlined that Nagele would continue to receive half of the door revenues at the pool through August 15, 2016, and then Lu would have the option to buy the remaining 51 percent of the pool company in October, which the suit says he did.
North Shore Beach Club became Monarch Swim Club once Lu took over. However, Lu alleges that Nagle hasn’t yet turned over all North Shore intellectual property to the new owner. What really stuck out was when we found out that Lu was alleging Nagele had been selling fraudulent pool memberships under the North Shore name.
The two parties were unable settle out of court last week. Jordan Rushie, attorney for Lu, filed suit against Nagele, with the goal of stopping him from selling memberships through North Shore’s website.
According to Rushie, when the club transitioned from North Shore to Monarch at the end of 2015, Nagele retained the intellectual property associated with North Shore Swim Club.
“For some reason, [Nagele] retained the North Shore website, North Shore branding, North Shore emails. The website allowed people to buy memberships,” Rushie said. “So [Nagele] starts selling memberships to North Shore, which doesn’t exist anymore.”
According to the suit, Nagele, through the North Shore website, took in $70,000 worth of memberships at $350 a piece. As of Monday morning, you can still purchase a discounted membership on North Shore’s website. The Monarch website currently sells all access pass for $350 and an all access+bundle package for $400.
Nagele’s attorney, Perry Liss says his client was allowed to sell memberships to the swim club through the North Shore website and had every intention of honoring the memberships he sold. Liss claims the real issue is Lu’s breach of financial agreements pertaining to the transfer of North Shore to Monarch.
“We consider the whole agreement to be void because of [Lu’s] breaches,” Liss said. “Ultimately we want to settle this. We don’t want the beach club to close.”
Shortly after that statement, Liss gave us some more news: the two sides were unable to reach a deal last Friday. “The deal is off the table,” Liss said.
Liss told Spirit News “the deal” was that Nagele would give Lu 50 percent of the membership revenue from the sales that occurred through the North Shore website and Nagele and Lu were going to make a joint statement about the issue, describing it as a minor dispute between owners. The swim club would open as usual and all memberships sold would be honored for the 2017 season.
This doesn’t seem to be an option anymore. “There’s a chance that the beach club will not be able to be open this season,” Liss said. “The only way to proceed is to freeze that liquor license. Even though the club may be open as a pool, there won’t be any liquor that is allowed to be sold there.”
According to Liss, negotiations began to sour when Philadelphia Magazine broke the story. After that article was published, Nagele emailed a response to everyone who was signed up on the North Shore mailing list, including this reporter who is not and has never been a member of North Shore Swim Club.
The email began:
I need to set the record straight in light of a certain article that was published yesterday about me and the swim club. A quick fact check will show many inaccuracies with the statements made. The article disregards basic principles of journalism and reads more like a tabloid hit piece.
I take great pride in North Shore Beach Club, and I’m writing to let you know that the swim club remains committed to its members. Unfortunately in business, not all partnerships work out as intended, and this is one of those situations.
The email goes on to read:
It’s unfortunate that Lu would publicize false accusations against me and our company, especially as we were finalizing an agreement this week to complete the purchase.
Both lawyers denied leaking the story to Philly Mag. Rushie says the two sides were close to settling early last week, but provided no comment for the reason that a settlement wasn’t reached. According to Liss, the article put an unnecessary strain on litigation “This was getting settled, and we had it settled,” Liss said. “As soon as [the article] came out, it made it significantly harder.”
Nagele outlines his financial grievances with Lu in a chronology starting from 2015. He also provides a link to a digital copy of the liquor license. Nagele points out that North Shore Beach LLC is listed as the owner of the liquor license, therefore meaning he has control over who can use it to sell booze. Meanwhile documents filed in the lawsuit by Rushie and provided to us dispute the ownership of the liquor license.
Liss says he and his client will also be contacting the authorities. “We’re going to let the LCB know that the license holder, which is Brian Nagele, doesn’t consent to any alcohol being sold at that property and that any being done so is being done without the consent of the owner,” Liss said.
As pool season approaches, both lawyers have made it clear that all money taken in will be refunded should the club not open. However, if you are considering purchasing a membership, it may be wise to wait since both parties seem to be unsure of the future of the swim club.
“For now sit tight,” Liss said. “If the club doesn’t open then obviously the memberships [Nagele] sold would be subject to refund.”
Rushie, Lu’s attorney, also says any memberships sold through Monarch will be valid when the swim club opens. “The people that bought memberships, those memberships are going to be honored,” Rushie said.
Spirit News will continue to update this story as we learn more.