Town Sports International warned in a bankruptcy court filing that its gym operations “face a threat of substantial interruption” if a sale deadline wasn’t moved forward.
TSI, the parent company of Washington, Boston, Philadelphia and New York Sports Club chains, filed for bankruptcy protection on Sept. 14 as the pandemic created a financial strain for the gym industry. Gold’s Gym, 24 Hour Fitness and Flywheel are among the other chains that have sought bankruptcy protection in recent months.
Attorneys representing TSI requested a bid deadline of Oct. 26 with an auction date of Oct. 28 and a final sale hearing of Nov. 2, according to filings in U.S. Bankruptcy Court for the District of Delaware.
Chief Judge Christopher S. Sontchi set a hearing date for Oct. 9 to discuss the request for a truncated sale schedule.
TSI listed liabilities of between $500 million and $1 billion in its initial bankruptcy filing.
Bloomberg was the first outlet to report TSI’s request for an expedited sale calendar.
More than 40 potential bidders have expressed interest in acquiring TSI, according to a Oct. 2 court filing. Those bidders include “17 strategic companies in the fitness space and a range of distressed and private equity investors.”
Tacit Capital agreed to provide $32 million in debtor in possession financing, as part of an $80 million bid for TSI’s assets. That will serve as the minimum bid for the upcoming sale, according to court documents.
TSI faced lawsuits before it declared bankruptcy that centered around allegations charging members while gyms were shut down as a result of COVID-19 and failing to cancel accounts despite member requests to do so.