CHICAGO – The bankruptcy court handling the reorganization for Bally Total Fitness has approved Bally’s amended Chapter 11 plan, the company announced Tuesday.

The amended plan was proposed by shareholder Harbinger Capital Partners and will not need to be resolicited for creditors’ approval. The U.S. Bankruptcy Court for the Southern District of New York also approved the investment agreement providing for Harbinger’s commitment to make a $233.6 million equity investment in the company and restructuring support agreements among the parties. Under the amended plan, Bally can consummate the restructuring set forth in the existing plan under certain circumstances.

In addition, the court approved the company’s debtor-in-possession (DIP) financing and exit credit facilities. Bally expects to close its DIP today, refinancing the existing senior secured facility. Morgan Stanley Senior Funding Inc. is the sole lead arranger and sole bookrunner for the $292 million of super-priority secured DIP and the senior secured exit credit facilities. The DIP and the exit facilities provide for a $50 million revolving credit facility and a $242 million term loan.

The confirmation hearing on the amended plan is scheduled for Sept. 17. If confirmed, the company expects to implement the amended plan and emerge from Chapter 11 by the end of September 2007.

Don Kornstein, interim chairman and chief restructuring officer of Bally, called the court’s approval of the amended plan “a significant accomplishment and marks the beginning of a new era for Bally Total Fitness.”

Last week, in a filing with the Securities and Exchange Commission, Bally announced the appointment of William G. Fanelli as senior vice president of finance and corporate development and principal financial officer. Fanelli has been with Bally since December 2006 as it senior vice president of corporate development.

The company also announced that it had terminated interim executive agreements with Tatum LLC relating to the employment of Ronald G. Eidell as Bally’s senior vice president and chief financial officer and Michael Goldberg as vice president and corporate controller.

Also last week, Bally announced that Kornstein will get a $3 million bonus if the reorganization is completed. But any performance bonus for Kornstein and other Bally executives would be eliminated under a modified 2007 incentive plan approved by Bally’s board, according to the filing. Other executives in the company, including Fanelli, Marc Bassewitz, senior vice president, secretary and general counsel, and John Wildman, senior vice president, sales and interim chief marketing officer, will receive bonuses ranging from $158,375 to $375,000.