A GYM chain with 101 locations across the country has filed for bankruptcy.
Blink Fitness, a budget brand owned by luxury fitness chain Equinox, has plunged into Chapter 11 bankruptcy, citing hundreds of millions of dollars in liabilities.
2
2
The voluntary filing occurred under the U.S. Bankruptcy Code in the District of Delaware, according to Bloomberg.
Blink Fitness said it made this decision in an effort to position itself for long-term success.
Chapter 11 bankruptcy would allow the company to come up with a plan to pay its creditors while operating.
Blink Fitness has not announced plans to close any of its gyms.
The company listed its assets and liabilities at $100 million and $500 million each.
This comes after the chain’s recent announcement that it would improve its most popular locations and elevate its members’ experience, according to a Press release.
Blink Fitness has 101 locations in seven states: California, Illinois, Massachusetts, New Jersey, New York, Pennsylvania and Texas.
The company announced that it hopes to sell the business.
Blink Fitness President and CEO Guy Harkless said the company’s board and management team decided that selling the company would be the best step forward.
“Over the past few months, we have been focused on strengthening Blink’s financial foundation and positioning the business for long-term success,” said Harkless.
“We thank our entire corporate and gym team for their continued dedication to our members, as well as our suppliers and partners for their continued support,” he added.
“We look forward to emerging from this process as an even stronger business.”
Blink Fitness is an offshoot of the luxury gym chain Equinox.
Equinox has reportedly faced financial difficulties since the pandemic.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps businesses eliminate debts they cannot pay.
The process allows businesses to start from scratch and gain access to new credit.
Overseen by federal courts, bankruptcies allow a company to more easily sell its assets to pay creditors, according to Investopedia.
Chapter 11, a common process for businesses, is used to restructure a business with the goal of staying open — even if it means selling most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows collaboration between U.S. and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” according to the United States Courts.
The network received US$1.8 billion to refinance its debt maturity this year, according to Bloomberg.
Despite this, Blink Fitness has reported sales improvements in recent years.
The company’s revenue has increased by almost 40% in the last two years.
COMMITMENTS
Blink Fitness made several promises when announcing its big update.
First, the company said it would pay salaries and benefits to its employees without interruption during this period.
The chain also promised that it would continue to offer its members “the high-quality fitness experience they have come to expect,” according to the company’s press release.
BUSINESS BUST
Other companies facing bankruptcy have also had to deal with location closures, US Sun previously reported.
Restaurant chain World of Beer announced it would close some of its 34 branches.
This story originally appeared on The-sun.com read the full story
