[Developing Story] May 4, 2020 – GGI Holdings, LLC (Gold's Gym) and one affiliated Debtors (“Gold's Gym” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Northern District of Texas, lead case number 20-31318. The Debtors, an iconic chain of fitness centers founded in Venice Beach in 1965 and made famous by Arnold Schwarzenegger, are represented by Aaron Kaufman of Dykema Gossett PLLC.
The Debtors are 69.2% owned by TRT Holdings, Inc.("TRT") which acquired Gold's Gym from private equity firm Brockway Moran & Partners in 2004 for a reported $158.0mn. Robert Rowling's Irving, Texas-based TRT also owns, inter alia, Omni Hotels, Tana Exploration (oil & gas exploration) and Waldo's Dollar Mart (Mexico).
The Debtors’ lead petition notes between 1 and 50 creditors; estimated assets between $50.0mn and $100.mn; and estimated liabilities between $50.0mn and $100.0mn. Documents filed with the Court list the Debtors’ largest unsecured creditors as having indeterminate lease-based claims.
In a company statement announcing the filing, the Debtors advised that “The global COVID-19 pandemic spurred us to take immediate action, including the difficult but necessary decision to permanently close about 30 company-owned gyms, to maintain the strength and growth of the potential of the brand as well as ensure the continued viability of the company for decades to come. We have been working with our landlords to ensure that the remaining company-owned gyms reopen stronger than ever coming out of this pandemic."
A message on the Debtors website added: "Our focus is and always will be on our members around the world, and we look forward to welcoming them back as soon as it is safe for our members, team members and communities. Gold’s Gym has been the world’s trusted fitness authority for more than 50 years, and we’re absolutely not going anywhere.
On May 4, 2020, GGI Holdings, LLC and its affiliates ('Gold’s Gym') filed voluntary petitions for relief under Chapter 11 in an effort to facilitate the financial restructuring of the company. This pre-negotiated filing will enable us to emerge stronger and ready to grow, and it is our intent to be on the other side of Chapter 11 by August 1, 2020, if not sooner."
Events Leading to the Chapter 11 Filing
The Debtors' website notes: "2019 was our strongest year of worldwide growth in company 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. Filing for Chapter 11 was the best option to maintain the strength and growth potential of the brand as well as ensure the continued viability of the company for decades to come."
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The post GGI Holdings, LLC (Gold’s Gym) – Iconic Fitness Brand Files Chapter 11 Citing COVID-19 and Closes 30 Gyms; Promises to Emerge Stronger, Fitter appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.