AMERICA — 24 Hour Fitness has officially filed for bankruptcy. The company announced Monday, June 15 that it will permanently close about 130 gyms, including 18 different locations around the greater Los Angeles area and Orange County.
24 Hour Fitness Worldwide Inc. is now seeking court protection from its creditors, as the company is unable to keep up with debt payments due to COVID-19. Like many other businesses, the pandemic forced 24 Hour to close its gyms nationwide. The fitness company filed its Chapter 11 petition in Delaware, according to court papers.
Chapter 11 bankruptcy will allow the company to restructure and continue operating while it works on a plan to pay back its creditors. The fitness chain is facing a $1.4 billion debt load, not including lease obligations. 24 Hour has lined up approximately $250 million in debtor financing to allow the company to continue to operate as stores are able to reopen across the country. The store previously announced that members would not be charged during the shutdown.
“If it were not for COVID-19 and its devastating effects, we would not be filing for Chapter 11,” Chief Executive Tony Ueber said in a statement.
The company has also requested court permission to end an additional 135 club leases to help cut costs. Real Estate advisory firm Hilco has been assisting the fitness chain with identifying the proper clubs to close based on close proximity to other locations and/or being out of date.