24 Hour Fitness has received approvals from the U.S. Bankruptcy Court for the District of Delaware for the First Day motions related to the company’s voluntary Chapter 11 filing on June 15, 2020. The approved motions will support the Company’s continued business operations while it implements the financial restructuring process.
The Court’s approval includes granting the Company access to approximately $250 million in debtor-in-possession (DIP) financing provided by existing lenders which, combined with the Company’s cash from operations, will provide sufficient liquidity to allow operations to continue, including club reopenings, while the Chapter 11 process is completed. The Court also approved the Company to continue paying employee wages, providing healthcare and other benefits and paying vendor partners for all goods or services provided on or after June 15, 2020.
Chief Executive Officer Tony Ueber stated, “We are pleased to receive the Court’s approval of these first-day motions, as this marks the first day of our journey forward as a stronger, more resilient company. We will be able to continue our club reopening process as planned in order to serve our club members and the 24 Hour Fitness community. We are using this Chapter 11 process as a tool to reduce debt and pave the way towards a successful future. I’m deeply grateful to our team members and partners who have supported us along the way.”
As previously announced, 24 Hour Fitness voluntarily implemented a Chapter 11 restructuring to strengthen the Company’s future for its employees and club members and reinvest in its clubs.
24 Hour Fitness is continuing to reopen clubs nationwide in a phased approach and welcome members in club locations, carefully following state and local government and public health agency guidelines. The Company expects the majority of its club footprint to be reopened by the end of June. The health and safety of employees, club members, guests, and club communities remain a top priority. During the time of phased club reopenings, all club members will have access to any available 24 Hour Fitness club, regardless of membership level, through the end of 2020.
Lazard is acting as financial advisor, FTI Consulting is acting as restructuring advisor, and Weil, Gotshal & Manges LLP is acting as the company’s legal counsel in connection with the company’s Chapter 11 cases. For more information about the Chapter 11 cases, including access to Court documents, go here.
Photo courtesy 24 Hour Fitness
