Bally receives approval of second amended plan of reorganization

By Alice Popovici

New York, Aug. 19 - Bally Total Fitness Holding Corp. received court approval of its second amended plan of reorganization, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported Bally received court approval of a plan support agreement under which holders of about 90% of the company's pre-bankruptcy term loan and 100% of its pre-bankruptcy revolving credit facility have agreed to vote in favor of the plan.

Under the plan, the holders of the company's pre-bankruptcy term loan secured debt will receive 94% of the reorganized company's equity, and the holders of general unsecured claims will receive 3% of the equity and warrants to purchase up to an additional 5%.

The other 3% of the equity will be distributed to management.

Plan creditor treatment

Treatment of creditors will include:

• Holders of $1 million in other priority claims will recover 100% in cash;

• Holders of $2.52 million to $24.37 million in other secured claims will recover 100% either in cash, reinstatement of the claim or the return of the collateral securing the claim;

• Holders of $50 million in pre-bankruptcy revolver claims will recover 100% through a share of the company's exit revolver;

• Holders of $7.42 million in pre-bankruptcy swap claims will recover 100% through a new swap note;

• Holders of $162 million in pre-bankruptcy term loan claims will recover 100% through the term loan distribution;

• Holders of $80 million in term loan deficiency claims will recover zero to 1.32% through a share of the unsecured claims distribution. However, if holders of senior note claims and general unsecured claims vote in favor of the plan, the deficiency claims will be waived and the distribution will go to noteholders and unsecured creditors;

• Holders of $247.34 million in senior note claims will recover 0.79% to 1.52% through a share of the unsecured claim distribution;

• Holders of $75 million to $475 million in general unsecured claims will recover 0.79% to 1.52% through a share of the unsecured claim distribution;

• Holders of $23.71 million in convenience claims will recover 1.06% in cash;

• Holders of $231.25 million in subordinated note claims will recover 0.79% to 1.52% through a share of the unsecured claim distribution;

• Intercompany claims that are not specifically reinstated will be deemed eliminated in full; and

• Holders of equity interests will receive no distribution.

Bally, a Chicago-based fitness center operator, filed for bankruptcy on Dec. 3, 2008. Its Chapter 11 case number is 08-14818.

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