Bankrupt New York Sports Clubs owner makes lender-takeover deal

Town Sports International Holdings filed for bankruptcy earlier this week

TRD New York /
Sep.September 17, 2020 12:36 PM
Town Sports International CEO Patrick Walsh (Credit: JoJosh313; Getty)

Town Sports International CEO Patrick Walsh (Credit: JoJosh313; Getty)

Town Sports International Holdings, the bankrupt owner of New York Sports Clubs, has reportedly worked out a takeover deal that will keep its gyms open.

The company outlined plans for the deal — struck with private-equity firm Tacit Capital and various lenders — at a bankruptcy hearing Wednesday, according to the Wall Street Journal.

The deal would allow the lenders to lead bidding for the company’s assets, known as a “stalking horse” bid. According to the Journal, the offer would consist of no more than $85 million worth of debt forgiveness, establishing a minimum price for the auction.

The offer was chosen over a separate one from lender Kennedy Lewis Investment Management.

Town Sports, which filed for bankruptcy Monday, has struggled with mounting debts since the pandemic hit. In April, New York Attorney General Letitia James ordered the company to reimburse members for fees charged while the locations were closed, arguing that “New Yorkers have enough to worry about and should not be forced to pay for services NYSC is no longer providing.”

Nicole Greenblatt, a lawyer for Town Sports, said Wednesday that the company needed financial relief “so they can reopen the gyms with appropriate health and safety improvements, and comply with relevant consumer protection laws and obligations.”

The company intends to sell off its assets by the end of October and has until next week to commit to a plan for shopping them around.

Gov. Andrew Cuomo gave gyms the green light to reopen in August. Town Sports said it has since reopened 95 locations. [WSJ] — Sylvia Varnham O’Regan


Related Articles

arrow_forward_ios
Ruby Tuesday introduced plans to close 185 of its restaurants (Ildar Sagdejev via Wikipedia Commons)

CEO says bankruptcy is not goodbye, Ruby Tuesday

CEO says bankruptcy is not goodbye, Ruby Tuesday
J.C. Penney at the Westfield South Shore mall in Long Island and  J.C. Penney CEO Jill Soltau (Google Maps; Getty)

J.C. Penney to keep Bay Shore outpost open for now

J.C. Penney to keep Bay Shore outpost open for now
The Martinique hotel (Wikipedia, Google Maps)

Operator of Martinique Hotel in Manhattan files for bankruptcy

Operator of Martinique Hotel in Manhattan files for bankruptcy
Regus CEO Mark Dixon with 175 Pearl Street in Brooklyn, 1325 Sixth Avenue and 1501 Broadway (Regus, Google Maps)

Regus throws 6 NYC locations into bankruptcy

Regus throws 6 NYC locations into bankruptcy
Winick Realty Group CEO Jeff Winick

Jeff Winick files for personal bankruptcy

Jeff Winick files for personal bankruptcy
Town Sports International CEO Patrick Walsh (Credit: JoJosh313; Getty)

Dead weight: New York Sports Clubs owner files for bankruptcy

Dead weight: New York Sports Clubs owner files for bankruptcy
From left: J.C. Penney CEO Jill Soltau, Authentic Brands Group CEO Jamie Salter, Simon Property Group CEO David Simon, and Brookfield Property Partners CEO Brian Kingston (Getty)

Authentic Brands in talks to join J.C. Penney takeover

Authentic Brands in talks to join J.C. Penney takeover
Maison Kayser USA CEO Jose Alcalay (LinkedIn; Tools of Men via Flickr; Maison Kayser)

Maison Kayser files for bankruptcy with plans for sale

Maison Kayser files for bankruptcy with plans for sale
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...