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Law360 (May 4, 2020, 7:31 PM EDT ) Fitness chain Gold's Gym International filed for Chapter 11 protection in a Texas bankruptcy court Monday, saying COVID-19 closures had spurred the company into implementing a prenegotiated restructuring plan.
With all of its U.S. gyms shut down since the end of March, a Chapter 11 filing, accompanied by the permanent closure of 30 U.S. locations, was necessary to ensure the company's future viability, Gold's Gym said in an announcement Monday.
"This has been a complete and total disruption of every one of our business norms, so we needed to take quick, decisive actions to enable us to get back on track," the company said on its website.
Founded in Venice Beach, California, in 1965, the company as of the filing date operated about 95 gyms in the U.S and franchises an additional 600 worldwide, according to its bankruptcy filings.
The company had announced as of March 31 it was temporarily closing all of its corporate locations in the U.S., including those in areas not then under government shutdown orders, due to the COVID-19 pandemic.
On its website the company said 2019 had been the strongest year of growth in its history.
"No single factor has caused more harm to our business than the current COVID-19 global pandemic and the temporary closures required to protect the safety of our members, team members and communities," it said.
The Chapter 11 petition filed Monday listed between $50 million and $100 million in both assets and liabilities.
The company said it plans to exit Chapter 11 by Aug. 1.
The company said the filing should not affect its franchises or licencing operations and that vendors will be paid in the ordinary course. Membership fees for the temporarily closed locations will remain suspended until they reopen, Gold's Gym said.
The permanently closed gyms will be mainly in the St. Louis, Alabama and Colorado Springs markets, the company said.
Gold's Gym is represented by Aaron M. Kaufman, Ariel J. Snyder and Danielle N. Rushing of Dykema Gossett PLLC.
The case is In re: GGI Holdings LLC et al., case number 20-31318, in the U.S. Bankruptcy Court for the Northern District of Texas.
--Editing by Daniel King.
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