đź’Ş New Chapter 11 Bankruptcy Filing - GGI Holdings LLC (Gold's Gym) đź’Ş

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GGI Holdings LLC

May 4, 2020

As many talking heads pontificate about whether J.Crew is the canary in the coal mine for post-COVID retail, we have our first fitness-related chapter 11 bankruptcy filing. Is Gold’s Gym the canary in the coal mine for post-COVID gym-based fitness? GGI Holdings LLC and 14 affiliates (the “debtors”) are “…seeking relief under the provisions of chapter 11 of the Bankruptcy Code to facilitate the closing of certain locations, the rejection of the related leases and contracts and the sale of the remaining business operations on the terms proposed by [non-debtor holding company] TRT Gym Asset Holdings, LLC and its assigns through a confirmed chapter 11 plan.” After recently (permanently) closing 30 locations, the debtors have ~700 remaining locations of which 63 are company-owned and operated. They are owned by TRT Holdings, a Texas-based private holding company that, in addition to Gold’s Gym, owns Omni Hotels. In turn, TRT Holdings is owned and run by Robert Rowling, an American billionaire who made his fortune by working for his father’s oil and gas company — a company that sold to Texaco in the late 80s for hundreds of millions of dollars. If only we could be so lucky.

This is as pure a COVID-19 story as we’ve seen yet. All of the debtors company-owned gyms are closed and a majority of its franchised gyms are too = no revenues and no franchising fees, respectively. The filing is meant to jam those 32 landlords who wouldn’t play ball by way of rent abatements/concessions. The debtors’ pre-petition lenders — big banks like JPMorgan Chase Bank NA, Bank of America NA, and Wells Fargo Bank NA — were unwilling to fund a DIP. The debtors’ pre-petition owner, however, wants to stay in the mix; TRT is offering a $20mm DIP and intends to purchase the company out of bankruptcy. The debtors indicate that they think TRT’s bid will satisfy the big banks, take care of admin expenses, cure defaults under leases the debtors intend to keep and “establish a settlement fund” for general unsecured creditors. The DIP requires a plan on file by mid-May and confirmation by August 1. The timing is predicated upon being ready to open up shop when COVID-exhausted Americans are just about ready to stream themselves back into fourth-tier gyms and take out their longing for “Freedom” on a deep stack of rusty weights. Get pumped b*tches.

  • Jurisdiction: N.D. of Texas (Judge )

  • Capital Structure: $51.3mm RCF

  • Professionals:

    • Legal: Dykema Gossett PLLC (Danielle Rushing, Aaron Kaufman, Ariel Snyder)

    • Financial Advisor:

    • Investment Banker:

    • Claims Agent: BMC Group (*click on the link above for free docket access)

  • Other Parties in Interest: