This is one of the many rubbish places and pretend "schools" in China. They probably even had no license to hire foreigners and employ them. It is not a "club" as their name suggests but a crappy training centre run by some clowns who do not know what they are doing.

If you have had an illegal status and even no contract, you cannot sue them in any way because you might get yourself in serious problems then. One of the advantages of being legally there is that you have a couple of possibilities to go against them if they cheat you.

Good luck!
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The thing is, Turnoi, these people are not clowns, far from it, and they know exactly what they are doing, and are most probably very good at it; they make money, that is what they do; they are very good at gathering the goosegogs-gather ye goosegogs while ye may, eh? You are right I am sure that they don't have a licence to hire foreigners, but you would know as well as I, that in China, there are ways and means to get and keep people off of your back. As for the unfortunate young lady, well, you have to learn how to be roughed up a bit in life, all good character-building stuff.