Bally Total Fitness Files for Chapter 11 Bankruptcy ...( CHICAGO Dec. 3 /- Bally Total Fitness...),Health

CHICAGO, Dec. 3 /PRNewswire/ -- Bally Total Fitness Corporation ("Bally") today announced that it has filed for voluntary chapter 11 bankruptcy protection. The chapter 11 petition was filed today in the U.S. Bankruptcy Court for the Southern District of New York. Bally intends to use the chapter 11 process to significantly reduce debt from its balance sheet while streamlining and strengthening its core operations. It expects to accomplish these goals through either a sale of the business as a going concern or through a chapter 11 plan of reorganization.

Bally has received strong indications of interest from a number of prospective purchasers and is engaged in active and advanced negotiations with certain of its lenders regarding an agreement to purchase the Company's assets as a going concern. The Company seeks to complete these sale negotiations and enter into a definitive agreement as promptly as possible, subject to Bankruptcy Court approval of the sale transaction.

The Company is confident that if a sale does not occur on terms acceptable to the Company and its stakeholders, it can execute a "stand-alone" reorganization plan based on Bally's comprehensive new business plan, which is already being implemented by the Company. This business plan, which is predicated on enhanced efficiencies, organizational transformation and disciplined cost savings measures, has quickly led to improved operational metrics and is expected to have a significant positive impact on the Company's operations in the long term.

In conjunction with the chapter 11 filing, Bally intends to use existing cash reserves and ongoing cash receipts to maintain normal operations. If Bally successfully negotiates a sale transaction with its lenders, they would provide the Company with debtor-in-possession ("DIP") financing as an additional source of liquidity to support Bally's ongoing operations. Bally anticipates that these
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