Bally’s Continues High-Impact Regimen of Bankruptcy Exercises

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Bally Total Fitness is feeling the burn when it comes to soliciting creditor approval for a prepackaged reorganization plan before filing for bankruptcy. Two activist hedge funds, Liberation Investments and Harbinger Capital Partners (and the award for the two hedge funds most likely to be activist by their name alone goes to…), have proposed an alternate restructuring plan, one that conveniently eschews bankruptcy and gives the two hedge funds majority control of the company.
The activist consortium currently owns 11% of Bally’s common shares, and sent its alternate restructuring plan in a letter to the board on July 4, for effect. The new plan would give sub debt holders $60mm and new notes, and Harbinger 80% of the equity.
Bally’s will continue to solicit approval for its other plan, which has approval from the majority of current debt holders (63% of senior and 80% of senior sub). The company has until July 27 to solicit support from 2/3 of senior noteholders.
We're still getting a kick out of the consequences of letting a fund called Harbinger and a fund called Liberation accumulate 11% of your company. Is it possible for a fund to have a more ominous "I guarantee these guys will be activists" name? We've tried coming up with a list (don't let these guys near your common shares):
- David’s Slingshot Partners
- CBC (Cockblock Capital)
- La Resistance Capitale Fraternite
- TAMCO (Thermopylae Asset Management Company)
- Icahn’t Believe It’s Not Better Partners
- BYOB (Bring Your Own Board) Capital Management
- Defenestration Investments
- The Black Panthers
- One Man's Perk Is Another Man's Indiscretion Group
BALLY DISSENTERS STEP UP TO BLOCK BANKRUPTCY [New York Post]

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