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Sports Club requests waiver of default on 11 3/8% notes
By Caroline Salls
Pittsburgh, June 27 - The Sports Club Co., Inc. requested a waiver of the potential default on its 11 3/8% senior secured notes due March 2006 from the holder of a majority of the notes, according to a filing with the Securities and Exchange Commission.
On June 2, the company was notified by U.S. Bank, trustee for the holders of the notes, that it was in default under the notes indenture because it had not yet filed its form 10-K financial report for the year ended Dec. 31, 2004.
As previously reported, the company has delayed the filing of its 10-K pending resolution of accounting issues, which the filing said it is working diligently to finalize.
If the company is unable to file the report or obtain the requested waiver, the trustee or holders of 25% or more of the notes may declare the entire $100 million principal amount, plus accrued interest, to be immediately due and payable.
Without obtaining other financing, the Los Angeles operator of sports and fitness centers would not be able to pay the outstanding principal amount and accrued interest, according to the release.
The Sports Club also appealed the American Stock Exchange's application to strike its common stock from listing and registration on the exchange because it failed to file its 10-K annual and 10-Q quarterly financial reports, the release said.
The company has requested a hearing before a committee of the exchange to appeal the application and request continued listing of its stock.
The appeal will automatically stay the delisting of The Sports Club's common stock pending the committee's final determination, the release said.
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