Bally Total Fitness obtains exclusivity extension, use of cash collateral

By Rebecca Melvin

New York, March 24 - Bally Total Fitness Holding Corp. obtained approval Tuesday from the U.S. Bankruptcy Court for the Southern District of New York to extend the company's exclusive periods to file a plan of reorganization and to solicit votes on the plan and approval to continue using cash collateral to fund operations.

The exclusive plan-filing period was extended to July 31 from April 2 and the solicitation period was extended to Sept. 9 from June 1.

Bally said it is negotiating with its pre-bankruptcy lenders and other parties for sponsorship of a plan of reorganization.

Use of cash collateral was approved again on an interim basis.

Judge Burton Lifland said the Bally bankruptcy is proceeding on a fast track of 60 to 90 days for determining whether to reorganize or liquidate.

For that reason, he rejected a motion to grant class action status to a group of former employees to pursue claims, adding "...for the price of a stamp, they can file a claim ... your clients aren't any different from other groupings," Lifland told counsel representing the former employees.

Bally, a Chicago-based fitness center operator, filed for bankruptcy on Dec. 3. Its Chapter 11 case number is 08-14818.

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