CHICAGO -- Bally Total Fitness announced Monday it has begun the process of making an initial cash distribution of 31 cents a share to former stockholders, in accordance with the terms of Bally’s Chapter 11 bankruptcy plan.

Bally’s disbursing agent reserved $3.5 million, pending disallowance of certain outstanding claims that were filed in Bally’s Chapter 11 case. The reserve may fund a second distribution of old common stock, subject to satisfactory resolution of the outstanding claims.

Bally filed for bankruptcy in July 2007 but emerged as a private company two months later with the financial backing of Harbinger Capital Partners, a New York-based private equity firm which had been one of Bally’s shareholders.