CHICAGO, Aug. 21 Bally Total Fitness(Pink Sheets: BFTH) today announced that the U.S. Bankruptcy Court for theSouthern District of New York has granted the Company's previously announcedmotion to amend its Joint Prepackaged Chapter 11 Plan of Reorganization(the "Original Plan") to implement a superior alternative restructuringproposal from Harbinger Capital Partners Master Fund I, Ltd. and HarbingerCapital Partners Special Situations Fund L.P. (collectively, "Harbinger")without the need to resolicit approval from its creditors. The Court alsoapproved the Investment Agreement providing for Harbinger's commitment to makea $233.6 million equity investment in the Company, and Restructuring SupportAgreements among the parties, including holders of approximately 80% of theCompany's Senior Subordinated Notes and more than 55% of the Company's SeniorNotes, reflecting their commitment to implement the Harbinger-fundedrestructuring through the amended plan on the same timetable as the Company'soriginal plan. Under the amended plan, the Company can consummate therestructuring set forth in the Existing Plan under certain circumstances.
In addition, the Court approved the Company's debtor-in-possession (DIP)Financing and Exit Credit Facilities. The Company expects to close its DIPtomorrow, refinancing the existing senior secured facility. Morgan StanleySenior Funding, Inc. is sole lead arranger and sole bookrunner for the$292 million of super-priority secured DIP and the senior secured exit creditfacilities. The exit facilities provide financing under the amended plan foreither the Harbinger funded proposal or the noteholder proposal. The DIP andthe exit facilities provide for a $50 million revolving credit facility and a$242 million term loan.
"Obtaining the Court's authorization to amend our plan, without requiringresolicitation of plan acceptances, is a significant accomplishment and marksthe beginning of a new era for Bally Total Fitness," said Don R. Kornstein,Interim Chairman and Chief Restructuring Officer of Bally Total Fitness. "Welook forward to executing on this plan in partnership with Harbinger, andemerging promptly from chapter 11 protection as a stronger company, with thefinancial resources to continue investing in our clubs and facilities."
The confirmation hearing on the amended plan is scheduled for September17, 2007. If confirmed the Company expects to implement the amended plan andemerge from chapter 11 by the end of September 2007.
In re Bally Total Fitness of Greater New York, et al. Case No. 07-12395,is pending before the Honorable Burton R. Lifland in the United StatesBankruptcy Court for the Southern District of New York.
More detailed information on the treatment of claims under the amendedplan is available on Bally's website at http://www.ballyfitness.com and fromthe Company's chapter 11 website and hotline:
About Bally Total Fitness
Bally Total Fitness is among the largest commercial operators of fitnesscenters in the U.S., with over 375 facilities located in 26 states, Mexico,Korea, China and the Caribbean under the Bally Total Fitness(R) and BallySports Clubs(R) brands. Bally offers a unique platform for distribution of awide range of products and services targeted to active, fitness-consciousadult consumers.
Forward-looking statements in this release including, without limitation,statements relating to the proposed restructuring, are made pursuant to thesafe harbor provisions of Section 21E of the Securities Exchange Act of 1934.Statements that are not historical facts, including statements about theCompany's beliefs and expectations are forward-looking statements. Thesestatements are based on beliefs and assumptions by the Company's management,and on information currently available to management. Forward-lookingstatements speak only as of t