New York Sports Club Owner Files for Chapter 11

New York Sports Club Owner Files for Chapter 11

The company's assets and liabilities were in the range of $500 million to $1 billion, according to a court filing in the U.S. Bankruptcy Court in Delaware. All facilities will continue to operate as normal.

The fitness chain's Chapter 7 petition filed in NY late Monday estimates as much as $100 million in liabilities and no more than $50 million in assets. The company said the bankruptcy filing will allow it to emerge as an "even stronger company" that can better serve its members in the future.

It said restructuring would help it "properly respond to the COVID-19 pandemic". On March 13, the company borrowed $12.5 million from the 2013 Revolving Loan Facility and have continued to actively manage cash flow on a daily basis.

Town Sports International says the bankruptcy is to restructure its debt "to best position the company for long-term success in the current fitness industry environment".

The company said it will not going out of business, but its New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs Washington Sports Clubs, Lucille Roberts, Total Woman, and Around the Clock Fitness brands are affected by the Chapter 11 filing.

Earlier this year, Town Sports worked on a deal to purchase Flywheel, but it was contingent on the approval of its debt holders, and that deal fell through. Bike shops in NY, as well as most outdoor fitness gear sellers, have been largely cleared out. The company had to lay off most of its 7,000 staff members and it stopped paying rent.

"The pandemic has caused unprecedented economic volatility and uncertainty which has negatively impacted our recent operating results", the company said in a September 4 financial report to investors, adding that it has not been able to collect membership dues since March. Most of Town Sports' locations are in the Northeast. It has about 605,000 members and almost 200 gyms, most of the gyms remained closed it said. "We regret the impact this may have on some of our vendors".

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