Town Sports, the bankrupt owner of New York Sports Clubs, has secured $ 20 million in funding from its lenders to keep it afloat while it searches for a buyer.
The tentative deal comes just two days after Town Sports filed for Chapter 11 bankruptcy in Delaware and gives the company time to reopen and maintain most of its 190 gyms – which also include the locations of Lucille Roberts – as she tries to reorganize in court.
A group of lenders and private equity firm Tacit Capital have agreed to give the company $ 20 million to fund its bankruptcy operations and the group will be the so-called stalker bidder, forgiving $ 85 million. dollars in debt to buy Town Sports, according to reports from a virtual court hearing Wednesday.
Other bidders are expected to beat the $ 85 million bid to buy Town Sports at an auction.
Town Sports, which has 600,000 members in New York, Philadelphia, Boston and Washington, DC – many of whom have complained that they continued to charge dues while its gyms were closed for the past six months – recently reopened about 95 gyms, the company said on Monday.
The company filed for bankruptcy shortly before a debt payment was due this fall and amid a cash shortage because its gyms have been closed for months.