The Fitness Company Files Chapter 11 Petition
On July 12, 2007, The Fitness Company and associated debtors filed petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. These cases have been assigned to Judge Peter J. Walsh.
According to the debtors’ declaration in support of their first day motions, the debtors operate health and fitness clubs in six cities, and, pursuant to a management and service agreement, assist in the management of fitness clubs operated by an unrelated non-debtor entity.
These filings come after four consecutive years of losses, and a failure to identify a third party buyer. The debtors will propose to sell their assets, under section 363 of the Bankruptcy Code, to TFC Acquisition Corp., which is an entity that is wholly-owned by one of the debtors’ secured lenders and which is also an affiliate of the debtors. TFC will serve as a stalking horse, and TFC's offer as the stalking horse bid.
