FHI employee is proposed buyer for Busy Body assets: $200,000 offer, with bidding open

An employee of Busy Body-owner Fitness Holdings International has proposed to buy all remaining assets of the bankrupt retail business, offering $200,000 in cash.
Author:
Updated:
Original:

An employee of Busy Body-owner Fitness Holdings International has proposed to buy all remaining assets of the bankrupt retail business, offering $200,000 in cash.

The buyer, Brandon Sugimoto, has been FHI’s director of financial analysis since May 2005 and, per court documents filed with the U.S. Bankruptcy Court, Central District of California, is considered a financial “insider,” which are those with non-public information about a company from which they can benefit or can affect the company.

Sugimoto, reached by SNEWS® for comment, declined comment on the record about his plans for the assets or the retail business, or an explanation about his interest in it. He is also a principal with a company called Sentinel Development (www.sdevsinc.com), which specializes in distressed developments. He said this proposal to buy FHI assets has nothing to do with the Sentinel business.

In a filing with the court, FHI has filed a motion with the court to allow it to sell its remaining assets to Sugimoto. In that motion, FHI stated it must in this case cease any liquidation sales of current inventory, except those approved by the proposed buyer, and all remaining stores must remain open and operating through the closing date. The filing stated the closing date of the stores is now anticipated to be Aug. 14, 2009. The proposed sale does not automatically include leases; therefore, the buyer, if he plans to continue to operate any stores must negotiate new leases with the landlords, the document stated.

Although Sugimoto is the only bidder for the assets at this time, the case is now open to other bidders. The motion filed July 29, 2009 stated: Any bids must be submitted by Aug. 10 and a hearing is proposed for Aug. 11, 2009, at which time an auction will be held if additional bids are received. Opposition to the motion to sell to Sugimoto must be received by Aug. 5 by FHI’s counsel, SulmeyerKupetz, in Los Angeles, Calif.

Meanwhile, the court on July 30 postponed a hearing to determine if the case should be converted to a Chapter 7 bankruptcy liquidation (from its current Chapter 11 bankruptcy reorganization) per a July 7 request by the unsecured creditors committee, which also requested the postponement on July 21. The hearing date on that matter was changed from July 28 to Sept. 29.

In a brief requesting the postponement, the committee noted based on ongoing negotiations there are viable reasons to keep the case “for the time being” as a Chapter 11 reorganization. “However, conversion may remain appropriate at a future time,” the committee told the court, “and may be necessary with limited notice.”

At the Sept. 29 hearing, the court will also hold a status hearing on the entire case, initially filed Oct. 20, 2008. Click here to see a July 20, 2009, SNEWS story, “Creditors ask court to convert Fitness Holdings bankruptcy to liquidation; meanwhile, store closing sales begin.”

--Therese Iknoian

Related

Busy_Body_logo.gif

The Gym Store LLC highest bidder for FHI/Busy Body assets, plans 8-10 SoCal stores

The Gym Store LLC, a group led by majority investor Jeff Partrick, entered the highest bid for the assets of the remaining Busy Body stores of Fitness Holdings International at a court auction on Aug. 11. Held in the U.S. District Court, Central District of California, the ...read more

Busy_Body_logo.gif

FHI creditors express concerns over proposed sale to insider; FHI’s bank moves to dismiss creditors countersuit

Unsecured creditors in the Fitness Holdings International bankruptcy case have told the court they have concerns about certain issues regarding a proposed sale of remaining assets to a financial insider, although the committee added that it is not in general opposed to the sale. ...read more

Busy_Body_logo.gif

FHI asks bankruptcy court to approve liquidation of all remaining Busy Body stores

In a motion filed by Busy Body Home Fitness owner Fitness Holdings International, the court has been asked to approve going-out-of-business sales at all remaining stores and for the business to shut down by the end of July. On July 6, a hearing on the motion was set for July 14, ...read more

Busy_Body_logo.gif

It’s a done deal: The Gym Store owns Busy Body assets, re-opens SoCal stores; NorCal separate operation

The last vestiges of the former Busy Body Home Fitness company as it was run by Fitness Holdings International have been sold to The Gym Store LLC. The Gym Store is a company fueled by a group of private investors lead by Jeff Partrick, majority investor and the CEO of Hoist ...read more

Omni/Busy Body Home parent FHI files Ch. 11 reorganization for entire group, plans sale of stores

In what must seem like déjà-vu for long-timers in the fitness industry, Fitness Holdings International filed for Chapter 11 bankruptcy reorganization Oct. 20 for its entire group of retail holdings, east and west, a little more than seven years after the Busy Body Home Fitness ...read more

Busy_Body_logo.gif

The FHI/Busy Body bankruptcy: Gaining perspective with history and a peek at the future -- Part 2

In this two-part series, SNEWS is reviewing the history of Fitness Holdings International and Busy Body. In our first part that ran Feb. 8 (click here to see that story.), we looked at the first incarnation and the building of the second incarnation that was to eventually end in ...read more

Omni_Fitness_logo.gif

FHI to gut business: Omni to close out, Busy Body sliced, what's next?

On the evening of Feb. 23, when the Omni Fitness website home page changed to a stark scream of 50 percent to 90 percent off all inventory, the writing was on the wall. That morning, several insiders told SNEWS®, the district's employees had been called to a surprise conference ...read more

Busy_Body_logo.gif

The FHI/Busy Body bankruptcy: Gaining perspective with history and a peek at the future -- Part 1

In the first part of this story, SNEWS will take you through a review of the history behind Busy Body with perspective on the first incarnation and the building of the second incarnation that eventually ended in a late 2008 bankruptcy. In our second part on Feb. 15, we’ll review ...read more

Omni/Busy Body Home parent FHI notes liabilities of $28.8 million in court documents

In statements of financial affairs required by the courts in bankruptcy cases, Fitness Holdings International has said it has liabilities of $28,791,811 but assets of only $23,480,884. Of those liabilities, $18.8 million are to its bank as a secured creditor, according to 418 ...read more