Restructure | Around the Clock Fitness

PUSHING FORWARD

 

To our valued members,

On September 14, 2020, Town Sports International LLC announced that it and a number of its affiliates have filed voluntary Chapter 11 petitions to restructure under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.  To learn more, please visit https://dm.epiq11.com/case/townsports.

Town Sports intends to use the Chapter 11 process to engage in further discussions with their landlords and other creditors to successfully restructure their debts to best position the Company for long-term success in the current fitness industry environment. This includes our New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs, Lucille Roberts, Total Woman, and Around the Clock Fitness brands. With Chapter 11, companies generally seek a seamless transition in operations upon a filing, so our members will not recognize a break in service. Town Sports International is not going out of business. Restructuring is the best way to properly respond to the COVID-19 pandemic, with the long-term goal to emerge as a thriving powerhouse in the fitness industry. The goal is to emerge from Chapter 11 as an even stronger company, better positioned to serve members into the future. Town Sports will continue to operate its facilities as usual throughout this process, and members should not notice any changes to their fitness journeys. To ensure we operate in a safe and calculated manner, we will continue to reopen clubs as well as certain amenities in a 'phased' approach as we evaluate the best time and locations. We are committed to making Town Sports International success and rewarding the trust our members and employees have in us to deliver excellence focused on safety and service. We are deeply grateful for your continued loyalty and we are excited to continue supporting you along your fitness journey well into the future.

FREQUENTLY ASKED QUESTIONS

  • CHAPTER 11 FILING  
      • When did Town Sports announce its Chapter 11 filing?
      • On September 14, 2020, Town Sports International LLC announced that it and a number of its affiliates have filed voluntary Chapter 11 petitions to restructure under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Town Sports intends to use the Chapter 11 process to engage in further discussions with their landlords and other creditors to successfully restructure their debts to best position the Company for long-term success in the current fitness industry environment.
      • What is Chapter 11
      • A Chapter 11 filing is a voluntary action a company takes to implement a financial and/or operational restructuring while it continues to operate its business in the normal course without interruption.  Chapter 11 is a court-supervised process during which the company’s goal is to work consensually with its creditors and other stakeholders to agree on the terms of a financial restructuring and optimize its long-term business plan to the benefit of all of its stakeholders.
      • Does this mean Town Sports is going out of business?
      • No. Our fitness clubs throughout the country that can open under local COVID-19 guidelines will remain open for business on regular schedules.
      • What safety and hygiene protocols do you have in place to protect members and employees?
      • We are continuing to closely follow the guidance and recommendations from the Centers for Disease Control and Prevention (CDC), as well as from local and federal governments and public agencies. We remain focused on protecting the safety of our employees and members, while fulfilling our commitment to serve the communities where our fitness clubs are located.
      • Where can I get more information about the Chapter 11 case?
      • Information about the Chapter 11 case, including legal documents that are filed with the Court, will be available on https://dm.epiq11.com/case/townsports.
      • Who can I speak with to get more information?
      • Town Sports International has a claims agent to help provide more information and answer any questions about this announcement. They can be reached at 888-490-0677 in the U.S. or 503-520-4484 internationally. For more information on claims, please visit the website at: https://dm.epiq11.com/case/townsports.
  • EMPLOYEES 

    • Will I continue to receive my pay and benefits in the immediate term?

    • Yes. Employees will continue to receive pay and benefits as usual.

    • Will there be any changes in how the clubs operate in the immediate term as a result of this news? 

    • No. All facilities will continue to operate on normal terms and day-to-day responsibilities will not change.

    • Will compensation/ benefits be altered?  

    • None is expected as of now.

    • Will PTO remain on the same schedule?  

    • Yes, no changes are expected.

  • MEMBERS  

    • Is Town Sports going out of business?

    • No. The facilities throughout the country that can open under local COVID-19 guidelines will remain open for business on regular schedules. 

    • Will this affect the products and services your facilities offer members?

    • You shouldn’t notice any change as a result of this news. We continue to be focused on providing state of the art fitness facilities and the best in class training staff. The service and attention you receive from us will be better and positive as a result.

    • Is there any incentive to keep my membership? 

    • Absolutely. This move is to strengthen our brand, and for the clubs we have and can re-open, we will continue to invest in upgrades and new equipment as needed. Keep in mind, all open clubs are prepared to receive members, regardless of home club, for great workouts!  We have gone above and beyond with our COVID-19 preparedness and are ready to safely service you.  

    • What if I want to change my membership? 
      Our standard operating procedures are still in place and you can visit the clubs to make any changes as needed.

  • VENDORS 

    • Will vendors be paid for amounts due to them from goods or services provided prior to the filing date? When will I receive payment for an invoice, I submitted prior to the Chapter 11 filing?  How much am I going to be paid for what I am owed for goods provided pre-petition? 

    • Under Chapter 11, Town Sports is not allowed to pay any pre-petition obligations, except those that are specifically authorized by the Court.

    • The Company expects that any pre-petition claims will be addressed under the Plan of Reorganization and paid at the end of the case after we emerge, according to the terms of the Plan.  We regret the impact this may have on some of our vendors.

    • Will I have the same contact person going forward? 

    • Yes. Town Sports is continuing to operate as usual, and your contact will not change.