CHICAGO—Bally Total Fitness, which is no longer up for sale, is now searching for a new CEO following the ousting of Paul Toback. Toback, chairman and CEO, resigned on Aug. 11 and earned a severance of more than $3.8 million and had 135,000 shares of his restricted stock vested. As part of the involuntary separation agreement, Bally will provide Toback and his family with health insurance coverage for the next nine years and pay Toback any unpaid base salary and accrued and unused vacation time through the effective date of Aug. 11.
Two new Bally board members will replace Toback on a temporary basis. Bally appointed Don Kornstein, the founder and managing partner of Alpine Advisors, as the interim chairman and Barry Elson, the former acting chief executive officer and director of Telewest Global, as the interim CEO.
Bally is also shifting course in its strategic alternatives process. Because discussions with potential buyers have not yet resulted in a proposal, agreement or transaction involving a sale or merger, Bally is now focusing on recapitalization, private placement, underwritten rights offering or another type of corporate restructuring.
For more information, read Bally’s Aug. 11 filings with the U.S. Securities and Exchange Commission. If you’re interested in commenting on Toback’s involuntary resignation or the future of Bally, e-mail Amy Fischbach.