Shares of Bally Total Fitness Holding Corp. (Pink Sheets: BFTH) are down 11 cents, or 13 percent to 70 cents after soaring Friday morning after news of its restructuring surfaced.BFTH announced that its board of directors has received a letter from current shareholders Liberation Investments L.P., Liberation Investments Ltd., Harbinger Capital Partners Master Fund I Ltd. and Harbinger Capital Partners Special Situations Fund L.P., which proposes an alternate chapter 11 plan of reorganization for the company.
BFTH is engaging in discussions with these shareholders and will provide due diligence access to these shareholders for the purposes of their proposal being further refined and proposed definitive documentation being provided to the board for review and consideration. The shareholders have agreed to complete their due diligence by July 20, 2007, and the company has asked that proposed definitive documentation be negotiated by that date. There are no assurances that any agreement will be reached with the shareholders.
As previously announced, BFTH is currently soliciting consents to its prepackaged plan of reorganization, as to which holders of 63 percent of its senior notes and more than 80 percent of its Senior Subordinated Notes have signed a Restructuring Support Agreement. The expiration of the company’s solicitation of consents for its proposed plan of reorganization is July 27, 2007. The company will continue soliciting consents from note holders while the board engages in discussions with these shareholders.
BFTH is among the largest commercial operators of fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Korea, China and the Caribbean under the Bally Total Fitness and Bally Sports Clubs brands. BFTH offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers.