Bally Total Fitness launches rights offering for subordinated noteholders

By Caroline Salls

Pittsburgh, Aug. 17 - Bally Total Fitness Holding Corp. launched the senior subordinated noteholders' rights offering Friday that will be completed if Bally's amended Harbinger-funded plan of reorganization falls through, according to an 8-K filed with the Securities and Exchange Commission.

As previously reported, if the company's original pre-packaged plan of reorganization proceeds to confirmation, the holders of its 9 7/8% senior subordinated notes due 2007 and the holders of rejection claims against the company will receive the right to subscribe for their share of roughly $90 million of new senior subordinated notes.

The portion of the rights offering launched Friday applies only to the senior subordinated noteholders. Bally said it will only launch the rejection claimants' offering if the original pre-packaged plan takes effect.

The senior subordinated noteholders have 20 business days to commit to participate in the rights offering and to indicate the amount of rights offering senior subordinated notes for which they wish to oversubscribe.

If the Harbinger-funded restructuring is used instead of the original pre-packaged plan, the rights offering will not be completed, and any subscription payments that Bally receives from the senior subordinated noteholders will be returned without interest.

Bally, a Chicago-based fitness center operator, filed for bankruptcy on July 31 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 07-12395.

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