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Bally's Waiver Expires; Chain Closes Club in Akron

CHICAGO--Bally Total Fitness, the nation's largest operator of commercial health clubs, extended its due date for Letters of Consent from its lenders for the third time. The chain recently announced that it planned to miss the July 31 deadline for filing audited financials, and requested a 90-day extension from its lenders. The company had until July 26 to receive letters from the bondholders, however, when it didn't receive consent on that date, the company extended the due date to July 28, then again to July 29, and then to Aug. 5. Bally must receive consent from 50 percent of its bondholders in order to extend the filing deadline to Oct. 31, 2005. Bally announced on Aug. 1 that the July 31 waiver had expired. While it had received consent from 95.02% of its senior notes, 41.83% of its senior subordinated notes were still outstanding. The company plans to work with these lenders to reach approval of the consent.

Bally, which is in the process of selling Crunch and plans to close some underperforming clubs, has already shut one facility down. The Bally in Akron, Ohio, shut its doors after being in business for 20 years. After the lease on the building expired, the company decided not to renew the lease and posted a sign in the club about the closing date. Members can terminate their membership after the club closes, but they must ask for a refund. They can also keep their Bally's membership, but they'll have to travel to another Bally club in Jackson Township.

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