Fitness Holdings, which has been reorganizing in bankruptcy proceedings, is looking to close its remaining 22 Busy Body Home Fitness stores. According to court documents filed in bankruptcy court in Los Angeles, the company continues to explore a sale of its remaining locations but is being forced to liquidate by its secured lender.
At the time of the filing in October 2008, Fitness Holdings operated 111 stores (67 Busy Body Home Fitness stores and 44 OMNI Fitness Equipment Stores). It has since closed approximately 87 stores, including its OMNI chain that operated in the Northeastern part of the U.S. The remaining 22 Busy Body stores are located in California, Colorado and Alaska.
According to court documents, until recently Fitness Holdings was in negotiations to sell the remaining stores as a going concern to an affiliate of Hancock Park Capital, its sole shareholder. However, after extensive negotiations between Fitness Holdings, Hancock Capital and its secured lender, Pacific Western Bank, a sales agreement had not been reached. Subsequently, Pacific Western Bank has directed Fitness Holdings to liquidate its remaining assets and discontinue operations at its remaining doors by July 26.
As of the petition date, Fitness Holdings owed Pacific Western Back a claim of $18.8 million, secured by personal property of Fitness Holdings including its cash and inventory.
On July 6, a hearing on the motion to set going-out-of-business sales was set for July 14, moved up per Fitness Holding's request from the previously scheduled hearing of July 28.
