Gym Carnage Rolls On With YouFit Chain Filing for Bankruptcy
Gym Carnage Rolls On With YouFit Chain Filing for Bankruptcy
(Bloomberg) -- Gym chain YouFit Health Clubs LLC filed for bankruptcy on Monday, joining a growing list of fitness peers forced to seek court protection from creditors amid the pandemic.
The Chapter 11 filing in Delaware allows YouFit to continue operating while it works out a plan to repay creditors. YouFit’s petition listed assets of no more than $100 million and separate court papers show debt of about $110 million.
YouFit has a tentative deal to sell itself to lenders for $75 million, court papers show. Payment would come in the form of debt forgiveness. The so-called stalking horse bid sets the floor for an auction in bankruptcy and requires court approval.
Consumers were forced to stay away from communal gyms as the Covid-19 pandemic spread across the globe this year, leaving chains like 24 Hour Fitness Worldwide Inc. and Gold’s Gym International Inc. without customers. Many U.S. states have now allowed gyms to reopen, but with restrictions on capacity.
“As it did for many industries, including other health clubs, the pandemic hit Youfit hard, and we have made the decision to restructure the company through a bankruptcy filing as a way to continue operating and providing an uplifting fitness experience to our loyal members,” YouFit spokesperson Evan Nierman said in an emailed statement. The chain’s gyms have reopened in recent months with “stringent safety protocols,” he said.
YouFit has some 85 locations in the U.S., many of which are located in Florida, according to its website. YouFit was founded in St. Petersburg, Florida in 2008 and remains headquartered in the state.
Bank of America Corp. is listed as the biggest unsecured creditor at $10 million. YouFit hired Greenberg Traurig as bankruptcy counsel, FocalPoint Securities LLC as investment banker and Hilco Real Estate LLC as real estate adviser, according to its petition.
The case is YouFit Health Clubs LLC, 20-12841, U.S. Bankruptcy Court for the District of Delaware.
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