CHICAGO -- A judge has approved the bankruptcy reorganization plan by Bally Total Fitness, Chicago, paving the way for the company to exit bankruptcy.
Judge Burton Lifland of the U.S. Bankruptcy Court, Southern District of New York, Manhattan, approved the plan at a court hearing on Wednesday.
Bally CEO Michael Sheehan expects the company to emerge from bankruptcy later this month or in early September.
“We are pleased that the court confirmed our plan of reorganization,” Sheehan said in a statement sent to Club Industry’s Fitness Business Pro. “The reorganized Bally will be a stronger, leaner organization with a healthy balance sheet, well-capitalized owners and the financial flexibility to fund future growth.”
Upon Bally’s emergence, it will be controlled by lenders JPMorgan Chase & Co., which is expected to get 50.5 percent of the stock of the reorganized company, and hedge fund Anchorage Advisors LLC, which is to get 33.7 percent.
The company filed for Chapter 11 protection in December 2008—its second bankruptcy filing in 17 months. Hedge fund Harbinger Capital Partners paid $233.6 million for a 100 percent equity stake in Bally when it first emerged from bankruptcy in October 2007.