CHICAGO – Bally Total Fitness, which filed for bankruptcy on July 31, has filed a motion seeking approval to amend its prepackaged Chapter 11 plan to include an alternate proposal from shareholder Harbinger Capital Partners without the need to re-solicit votes from its creditors. Bally filed the motion Monday with the U.S. Bankruptcy Court for the Southern District of New York in Manhattan.

Under the proposal, Harbinger would invest approximately $233.6 million in exchange for 100 percent of common equity of the reorganized Bally. The amended plan would provide equal or better treatment to holders of Bally’s 10 ½ percent senior notes due 2011 and its 9 7/8 percent senior subordinated notes due October 2007 as well as holders of unsecured claims against Bally, the company says. Holders of existing common stock in Bally and other claims treated as equity in bankruptcy would receive $16.5 million in the amended plan. In the existing reorganization plan, common stockholders would receive nothing.

If the bankruptcy court grants the motion, Bally should be able to implement the amended plan and emerge from Chapter 11 within a similar time frame as it would with the existing plan, the company says. The existing plan would be funded by $90 million in capital through new senior subordinated notes in a rights offering backed by funds managed by noteholders Tennenbaum Capital Partners, Goldman Sachs & Co. and Anschutz Investment Co.

Harbinger Capital Partners, sponsored by Harbert Management Corp., has been investing as a hedge fund since 2001. According Harbert’s Web site, as of June 1, Harbinger Capital Partners was managing more than $8.7 billion through Harbinger Capital Partners Fund I and Harbinger Capital Partners Special Situations Fund.

Harbinger Capital Partners, along with Liberation Investment Group (the second-largest shareholder of Bally stock and, like Harbinger, serves as a hedge fund), first proposed an alternate restructuring plan to Bally in early July. In the plan, shareholders would have received 10 percent of the reorganized equity and participation in a rights offering for an additional 10 percent of the equity. Harbinger would have backstopped the rights offering and owned 80 percent of the reorganized equity.

Bally was unable to reach an agreement on the proposal before filing for bankruptcy, but the company informed shareholders on July 27 that it was “prepared to continue discussions on their proposal.”