The ownership of troubled strength-equipment innovator ProSpot Fitness has reverted to its investor after an 11th-hour bankruptcy filing delayed plans by three months.
No other group filed asset purchase agreements with the bankruptcy court by a court deadline of Oct. 9, and the ensuing 10-day window offered by investor Crossroads to ProSpot’s former owners and other executives to buy it back closed on Oct. 23 with no takers, sources said.
That means a deal that had been in the works prior to the Ch. 7 liquidation filing on July 20 for Busy Body/Gyms to Go owners to acquire all the assets from Crossroads should move forward, according to Busy Body/Gyms To Go co-owner Carlos Vazquez.
“Crossroads is 100-percent free and clear to enter into the agreements with anyone it wants to,” Vazquez told SNEWS®.
He said the final details of the deal that his company had in place prior to July are being worked out. Click here to see a July 22, 2009, SNEWS story, “11th-hour bankruptcy filing by ProSpot Fitness confuses future, asset ownership.”
“We are working out our deal with Crossroads,” he added, noting the ink should be dry on it in the next 30 days. He declined to disclose how it will differ, if at all, from the arrangement the GTG company had in July when it was to take over the lien and assets from Crossroads. Vazquez had overseen the transport of hundreds of gyms, benches, accessories and cardio equipment from the ProSpot Georgia warehouses under contract with Crossroads to his warehouses in Florida in mid-July.
Two weeks after the 11th-hour filing with U.S. Bankruptcy Court, Northern District of Georgia, which came just nine minutes before Crossroads was to assume total control, the court declined the investment company’s relief from the stay to give the court-appointed trustee time to further analyze the case and claims being made. Three weeks later, without action, Crossroads filed a second claim for relief from the court stay. Click here to see a Sept. 4, 2009, SNEWS story, “ProSpot assets ownership in the air, case stalled in bankruptcy court.”
That led the court to set a deadline for the trustee. On Oct. 2, the court ordered the trustee to submit an executed asset purchase agreement with deposit by Oct. 9, otherwise the stay imposed by the court would be terminated without further hearings.
Topping the creditors list that was filed with the bankruptcy papers was Travis Hall with a claim of nearly $2 million. Manufacturer Land America’s claim is shown as $1.2 million, while the debt to Crossroads is listed as $550,000. In court papers, Crossroads claimed it was owed $645,000. The filings listed company liabilities as $5.34 million, and its assets as $2.2 million.
ProSpot Fitness (www.ProSpotfitness.com) was founded in 1998 by Michael Slawinski.