Bally Total Fitness files for Chapter 11
The Business Journal of Milwaukee
Health club company Bally Total Fitness and certain affiliates have filed for Chapter 11 bankruptcy protection, the company said Wednesday.
Chicago-based Bally Total Fitness has five health clubs in the Milwaukee area, according to the company’s Web site.
Bally’s filed the case in the U.S Bankruptcy Court for the Southern District of New York.
In a statement, the company’s leaders said Bally’s will utilize the filing as an opportunity to restructure the company and reduce debt from its balance sheet.
Bally’s added, “It expects to accomplish these goals through either a sale of the business as a going concern or through a Chapter 11 plan of reorganization.”
Bally’s said certain parties already have expressed interest in the potential purchase of the health club company.
If Bally’s does not secure a buyer, the company said it remains confident Bally’s can successfully engage in a companywide reorganization under the Chapter 11 umbrella.
Bally’s confirmed it has existing cash reserves and cash receipts to keep operations going.
The company added, “If Bally successfully negotiates a sale transaction with its lenders, they would provide the company with debtor-in-possession (or DIP) financing as an additional source of liquidity to support Bally’s ongoing operations.”
It is not the first time Bally’s has filed for Chapter 11 bankruptcy. In mid-2007, Bally’s filed for Chapter 11 bankruptcy protection as its membership base declined and mounting debt weighed the fitness club chain’s finances down. The plan designed in 2007 aimed to reduce the company’s debt by $150 million and bring in $90 million in new capital for investing in some of its 375 clubs nationwide. According to Bloomberg, Bally’s emerged from the 2007 bankruptcy filing with the court’s protection and funding supplied by hedge fund firm Harbinger Capital Partners.
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