The U.S. Bankruptcy Court for the District of Delaware approved the first day motions related to 24 Hour Fitness’ voluntary Chapter 11 filing. The approved motions will support the company’s continued business operations while it implements the financial restructuring process.
The Court’s approval includes granting 24 Hour Fitness access to approximately $250 million in debtor-in-possession 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 to pay vendor partners for all goods or services provided on or after June 15, 2020.
“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” Tony Ueber, CEO of 24 Hour Fitness, said. “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.”
24 Hour Fitness voluntarily implemented a Chapter 11 restructuring in order to strengthen the company’s future for its team and club members and reinvest in its clubs.
As previously reported, Lazard is acting as financial advisor, FTI Consulting is acting as restructuring advisor and Weil, Gotshal & Manges is acting as 24 Hour Fitness’ legal counsel in connection with the Chapter 11 cases.