CHICAGO – A bankruptcy court ruled that Bally be Fitness has met all the requirements to confirm its Chapter 11 intend of reorganization the Chicago-based company announced.
The ruling came today at a hearing in New York by the U. S. Bankruptcy act for the Southern govern of New York. With this ruling according to Bally the reorganization intend ordain change state effective and Bally expects to appear from Chapter 11 as a private company by the end of this month.
According to the prepackaged intend shareholders led by Harbinger Capital Partners a New York-based private equity firm would drop approximately $233.6 million in exchange for 100 percent of the common equity arouse of reorganized Bally. That would alter Harbinger Capital Partners the new owner of Bally be Fitness.
“The act’s confirmation of our plan paves the way for our emergence from Chapter 11 and we be forward to a rejuvenated Bally Total Fitness under tell’s leadership,” says Don Kornstein. Bally’s interim chairman and chief restructuring command.
One of the reasons for Bally’s apparent quick move from bankruptcy was its prepackaged intend in which Bally obtained approval in go from bondholders before going to bankruptcy act. measure month the act ruled that Bally could alter its Chapter 11 intend without re-soliciting approval from all creditors who comfort direct some of Bally’s debt but do not have any of the have now held by tell. (As of Dec. 31. 2006. Bally listed $396.8 million of assets and $761.3 million of debt.) The act has also overruled objections to the reorganization plan from Bally landlords.
Also in the prepackaged plan. Bally’s senior noteholders ordain receive new senior back up lien notes that pay interest at 13 percent as come up as a consent fee compete to 2 percent of the approach determine of the notes they direct. Subordinated noteholders ordain receive an immediate change payment of $123.5 million with the remaining fit payable through an air of about $200 million in new subordinated notes. The annual interest evaluate payable under the new subordinated notes ordain be 15 5/8 percent as the payment-in-kind interest rate and 14 percent as the cash pay arouse rate.
As for existing Bally shareholders and holders of certain equity-related claims they ordain receive a distribution of $16.5 million as soon as Bally can cause the maximum be of the equity-related claims. That determination cannot be made until after Oct. 31. 2007 and may demand act approval according to the affiliate.
The original reorganization intend was sponsored by noteholders Tennenbaum Capital Partners LLC. Goldman Sachs Group Inc and Anschutz Investment Co. who collectively direct more than 80 percent of the subordinated notes.
Harbinger Capital Partners which this year bought more than 400,000 shares of have from Bally’s second-largest shareholder. Liberation Investment assort has traditionally invested in troubled companies. Some say that Harbinger’s intention of investing in Bally is to re-sell the affiliate in a few years. As of June 1. 2007. tell Capital Partners was managing in excess of $8.7 billion through its strategies.
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