NEW YORK, Dec 3 (Reuters) – Bally Total Fitness Holding Corp, which operates 347 health clubs serving more than 3.1 million customers, filed for bankruptcy protection for the second time in 17 months, and put itself up for sale.
The Chicago-based company and more than 40 affiliates filed for Chapter 11 protection with the U.S. bankruptcy court in Manhattan on Wednesday. Bally said it has more than $1 billion of both assets and debts, and in excess of 100,000 creditors.
Chief Executive Michael Sheehan in a statement said, "The burden of Bally’s long-term indebtedness, coupled with the lack of refinancing options in today’s constrained credit markets," left no alternative other than a bankruptcy filing, despite "marked improvement" in Bally’s operating results.
Bally first filed for bankruptcy protection on July 31, 2007, and emerged two months later after receiving $233.6 million from hedge fund Harbinger Capital Partners. It later defaulted under a credit agreement it obtained when it emerged, according to a resolution adopted by Bally’s board.
From the press release at Marketwatch:
CHICAGO, Dec 03, 2008 /PRNewswire via COMTEX/ — Bally Total Fitness Corporation ("Bally") today announced that it has filed for voluntary chapter 11 bankruptcy protection. The chapter 11 petition was filed today in the U.S. Bankruptcy Court for the Southern District of New York. Bally intends to use the chapter 11 process to significantly reduce debt from its balance sheet while streamlining and strengthening its core operations. 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 has received strong indications of interest from a number of prospective purchasers and is engaged in active and advanced negotiations with certain of its lenders regarding an agreement to purchase the Company’s assets as a going concern. The Company seeks to complete these sale negotiations and enter into a definitive agreement as promptly as possible, subject to Bankruptcy Court approval of the sale transaction.