Three ongoing bankruptcy filings have had action recently, including The Fitness Experience's Ch. 7 liquidation in January, Body Masters Ch. 11 reorganization in January, and the Arizona Fitness Gallery's Ch. 7 liquidation in October 2004.
The Fitness Experience
In the case that has attracted the most emotions and attention, The Fitness Experience as of March 7 has not filed many of the required forms and schedules per bankruptcy code and despite a Feb. 18 order by Judge John Squires of the U.S. Bankruptcy Court, Northern District of Illinois, Eastern Division. Squires issued the order based upon a request by the court-appointed trustee, who said she has been unable to complete her duties. The paperwork had been due Feb. 5 based on the original Jan. 21 filing. On Feb. 18, the court designated Douglas Pearson as the responsible officer of the company and ordered all papers filed in 14 days. (See latest SNEWSÂ® story, Feb. 28, 2005, "Court orders TFE to file late documents, Egbert takes over 10 storefronts.")
Also, the original creditors' meeting set for March 1 has been postponed by the court to March 9. It is now set for 2 p.m. on that date at the DuPage Courthouse, 505 N. County Farm Road, Room 2000, Wheaton, IL 60187.
Egbert, who purchased at auction some of the TFE stores in Illinois and Michigan, was set to change signs and re-open the stores, to be called Fitness Experts, as another separate branch of his business, which includes Chicago Home Fitness and American Home Fitness, among others. Dick Enrico, of 2nd Wind Fitness, has said he was buying the Wisconsin inventory from Egbert for his current stores and other stores to come in that state.
Still quietly working through reorganization, Body Masters' latest battle is with a metal tooling company and its broker for claiming ownership of dies for the company's equipment and refusing to manufacture more equipment or to return the dies -- in violation of a court automatic stay in such bankruptcy cases.
According to a March 3 court filing, Body Masters only had three weeks of materials left and then would be left unable to fulfill orders. That could force it into shut down, layoffs and liquidation, stated the company's attorney, who is requesting the court charge the companies with contempt of court. The U.S. Bankruptcy Court, Western District of Louisiana, in Layfayette/Opelousas, on March 4 expedited Body Masters' request for a hearing, now set for March 15.
For additional information and background, see SNEWSÂ® story, Jan. 17, 2005, "Body Masters quietly files for Ch. 11 reorganization."
With the auction of the company's name now delayed to April 15, the trustee for the U.S. Bankruptcy Court, Arizona, reported recently that the telephone numbers had been auctioned. FHI, owner of Busy Body Home Fitness and Omni Fitness, purchased the telephone numbers (480-368-1797 and 480-705-1901) for $2,000, announced in late January. The Fitness Gallery name had been scheduled to auction with the telephone numbers on Jan. 18, was postponed to March 4, and has now been postponed another six weeks.
In addition, creditors have 90 days from the Feb. 9 mailing of a court notice to file a claim with the court to participate in the distribution of any funds available. If a creditor has already filed a claim, another is not needed, the court stated. Claims can be sent and more information is available from the court: 230 North First Ave., Suite 101, Phoenix, AZ 85003-1706, or call the clerk of the court, Terrence Miller, 602-682-4000.
Fitness Gallery filed Oct. 8, 2004, for Ch. 11 reorganization, and then changed the filing two weeks later to Ch. 7 liquidation. For additional information, see SNEWSÂ® story, Oct. 25, 2004, "Fitness Gallery Arizona to liquidate under Chapter 7 bankruptcy."
SNEWSÂ® View: Just to be forced to do an update story on three, count 'em, three, recent bankruptcies is a sad statement. Nevertheless, we'll keep you posted as the cases progress.