NEW YORK -- Court documents were filed Monday detailing a bankruptcy judge’s approval of the sale of Crunch, New York, to CH Fitness, which consists of Mark Mastrov’s New Evolution Fitness Co. (NEFC) and affiliates of the private equity firm Angelo, Gordon & Co. The sale is expected to be completed by Aug. 31.
U.S. Bankruptcy Judge Robert Gerber signed the sale order, which was filed in U.S. Bankruptcy Court, Southern District of New York, in Manhattan. The purchase price for Crunch is approximately $40 million.
CH Fitness will take control of 18 Crunch clubs in four U.S. cities: New York (10), San Francisco (five), Miami (two) and Los Angeles (one). Crunch, which had 73,000 members when it filed for bankruptcy in May, will have approximately 55,000 members once the sale is complete. Ten other clubs owned by Crunch have either been sold, are in the process of being sold or have closed.
Crunch will essentially exit two major markets: Atlanta and Chicago. Crunch has accepted a stalking-horse bid from LA Fitness, Irvine, CA, for $200,000 for Crunch’s Buckhead club in Atlanta. It is expected that LA Fitness intends to transfer the memberships at the Buckhead club to a nearby LA Fitness. Crunch closed its Parkway Pointe location in the Atlanta area in April.
Fitness Formula, Chicago, had made a stalking-horse bid of $50,000 for Crunch’s Grand Avenue club in Chicago. The purchase would be for memberships and other assets at that club. No stalking-horse bid has yet been made for Crunch’s other Chicago club on North Avenue, which also is for sale.
“We are currently in negotiations for the Buckhead location in Atlanta as well as the locations on Grand Avenue and North Avenue in Chicago,” Crunch said in a statement. “Our primary concern is to make sure our members are taken care of, and as soon as the deal terms are finalized, we’ll let our members and the public know. We expect to have these negotiations resolved shortly."
The deadline for bids for the Buckhead and the Chicago Grand Avenue clubs is Sept. 2. Crunch is continuing to take bids for the Chicago North Avenue club. Interested parties can contact Duane Stullich, FocalPoint Partners LLC, Los Angeles, at (310) 405-7070 or at [email protected].
Two non-Crunch branded clubs were recently sold. The Hauppauge Sports Club in Smithtown, NY, was sold to ALGLASS Ltd, owned by Stephen Stern, Gary Goldstein and Allen Marquart. The purchase price was $225,000 plus more than $50,000 for debt considerations.
The Crunch-owned Rock Creek Sports Club in Silver Spring, MD, was sold in July to a company owned by Marc Tascher and Paul London. LA Fitness had made a bid of $300,000 for the club, but several members of the club opposed the deal. Tascher, ironically, and Angelo, Gordon & Co. bought Crunch from Bally Total Fitness, Chicago, in 2005. Tascher is the co-founder and former chairman and CEO of Town Sports International, New York, and operated another club company, Sports and Fitness Ventures LLC.
NEFC was formed by Mastrov, the founder of 24 Hour Fitness, and Jim Rowley, a former 24 Hour co-president. Upon completion of the Crunch sale, Mastrov and Rowley will serve as Crunch’s chairman and vice chairman of the board of directors, respectively.