Bally Total Fitness files for Chapter 11
Story By: Associated Press
Source: AP
Bally Total Fitness has filed for Chapter 11 bankruptcy protection for the second time in less than two years, hindered by debt and limited refinancing options amid the credit crunch.
The Chicago-based gym operator says it will use existing cash reserves to continue operating. Bally, which filed in the U.S. Bankruptcy Court for the Southern District of New York, plans to sell itself or reorganize under Chapter 11.
Last year, faced with more than $800 million in debt and just $45 million in cash, Bally defaulted on its debt, was delisted from the New York Stock Exchange and filed for Chapter 11. It emerged in the fall of 2007 as a private company.
But Chief Executive Michael Sheehan, who took the helm this June, says Bally's long-term debt and the lack of refinancing options left limited alternatives, despite ongoing efforts to cut expenses and streamline operations.
