In a swarm of filings, objections, motions and approvals, the court in the Ch. 11 bankruptcy reorganization case of Bally Total Fitness stayed busy over the holidays.
A motion to approve the employment of Hilco real estate consultants was set on the agenda for a hearing Jan. 7. Hilco (www.hilcofinancial.com) specializes in asset acquisition and disposition, acquiring and then selling assets in both the recent Keys Fitness bankruptcy and the 2006 Copeland's bankruptcy. The outcome of the hearing was not available by the end of the day.
To ensure continuation of services, the U.S. Bankruptcy Court, Southern District of New York, signed orders in late December to make sure landlords and other utility and service providers don't cut off service or otherwise harm continued operations. In a hearing Dec. 22, debtors were to meet weekly with their secured lenders to discuss the case. The first meeting of creditors will be Jan. 13. In other hearings, the court approved continued payments of wages and benefits and issued an order requiring financial institutions to honor checks. The court also waived the requirement that the debtor file a list of creditors, instead authorizing it to file a consolidated list of the 50 largest unsecured creditors.
In addition, the court was considering a third adversary case filed against it by 24 Hour Fitness based on Bally's employment of former 24 Hour executive Michael Sheehan. 24 Hour continued to allege that Sheehan misappropriated trade secrets, breached a non-compete covenant as well as stockholders' provisions and engaged in unfair business practices. An amended complaint continues despite the bankruptcy filing.
A deadline for Bally to file its court-required statements of financial affairs has been extended to Jan. 19.
Click here to see a Dec. 4, 2008, SNEWS® story, "Bally Total Fitness files for Ch. 11 reorganization -- again," about the Dec. 3 bankruptcy filing by Bally Total Fitness, the second such filing in less than 17 months.
Copies of motions and deadlines are available at a legal information website operated by Bally at www.kccllc.net/bally.