Bally Total Fitness Plan of Reorganization Filed
Yesterday, Bally Total Fitness of Greater New York Inc. and its affiliates filed a proposed plan of reorganization and an accompanying disclosure statement with the bankruptcy court. Bally Total Fitness filed for chapter 11 protection for the second time on December 3, 2008 and the plan of reorganization and disclosure statement outline the means by which Bally intends to reorganize and emerge from bankruptcy.
As of December 31, 2008, Bally operated 328 fitness clubs in 25 states, which collectively served 2.9 million members and employed almost 15,000 people. For 2008, Bally generated revenues of $634 million, most of which (92%) were from membership dues. However, membership dues were down 26% in 2008 versus 2007. During the bankruptcy cases, the court has authorized Bally to reject leases relating to 30 of Bally's locations.
According to the disclosure statement, the proposed plan of reorganization would reduce debt by $660 million, reduce annual interest payments by $85 million and facilitate the infusion of $30 million in new capital. The plan would result in swapping Bally's pre-bankruptcy secured term loan debt for 94% of the equity in the reorganized companies, while unsecured creditors would receive 3% of the new equity. If the plan is approved, creditors can expect to receive the following percentage recoveries on their claims, according to Bally:
As of December 31, 2008, Bally operated 328 fitness clubs in 25 states, which collectively served 2.9 million members and employed almost 15,000 people. For 2008, Bally generated revenues of $634 million, most of which (92%) were from membership dues. However, membership dues were down 26% in 2008 versus 2007. During the bankruptcy cases, the court has authorized Bally to reject leases relating to 30 of Bally's locations.
According to the disclosure statement, the proposed plan of reorganization would reduce debt by $660 million, reduce annual interest payments by $85 million and facilitate the infusion of $30 million in new capital. The plan would result in swapping Bally's pre-bankruptcy secured term loan debt for 94% of the equity in the reorganized companies, while unsecured creditors would receive 3% of the new equity. If the plan is approved, creditors can expect to receive the following percentage recoveries on their claims, according to Bally:
- Prepetition Revolver Facility Claims: 100%
- Prepetition Swap Claims: 100%
- Prepetition Term Loan Secured Claims: 100%
- Prepetition Term Loan Deficiency Claims: 0.00 - 1.32%
- Senior Note Claims: 0.79 - 1.52%
- General Unsecured Claims: 0.79 - 1.52%
- Convenience Claims: 1.06%
- Subordinated Note Claims: 0.79 - 1.52%
- Intercompany Claims: 0.00%
- Equity Interests: 0.00%
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