NASHVILLE, TN — The U.S. Trustee Program appointed Gary Murphey as the trustee of the Fuel Fitness chain that is undergoing Chapter 11 proceedings.
Murphey, whose term began Aug. 2, is overseeing the chain's day-to-day operations, including the restructuring of the company's finances. He has 20 years in turnaround experience and is one of 400 Certified Turnaround Professionals.
In mid-July, a bankruptcy court judge named Murphey the company's chief restructuring officer. Soon after, Fuel Fitness owner Manny Butera left the company to pursue other business interests. Fuel Fitness (formerly Total Fitness Systems) filed for bankruptcy last December.
Murphey, whose office is in Atlanta, says he is seeking new investors and hopes to have a new owner lined up by the end of the year.
“The company is profitable,” Murphey says. “If I can't get the right price, I have no problem running these clubs for another 12 months.”
Once a new owner takes over Fuel Fitness, the money spent to purchase the company will go to secured and unsecured creditors, and for administrative claims and operating costs, Murphey says. Any money left over will go to Butera, Murphey adds. The U.S. Trustee Program is paying Murphey on an hourly basis.
Butera closed several of his Fuel Fitness clubs, including two in Chattanooga, TN, and two in Atlanta, as well as a tanning salon in Nashville, TN. Two more clubs in Huntsville, AL, are in pre-sale, Murphey says.
The five remaining Fuel Fitness clubs — four in Nashville and one in Clarksville, TN — are receiving improvements such as upgraded equipment, Murphey says. The clubs are still offering one-year memberships at $35 per month.
“I can foresee nothing but good things for the company,” Murphey says. “The price point is half of what the competition charges.”