Fitness Chain 24 Hour Fitness Files for Bankruptcy
Permanently Closing 9 Locations in Nevada
The coronavirus has wreaked havoc on the Nevada economy, causing businesses like restaurants, entertainment venues, salons, and gyms to close. Some of these businesses were closed months ago, and are either still not allowed to reopen, or can only reopen under strict restrictions. Employees have been furloughed or laid off entirely, and there is no telling if and when profitability will return to normal. This has not just impacted casinos and tourism in Nevada. The fitness industry is also struggling to maintain. 24 Hour Fitness Gyms are facing having to face filing Chapter 11 Bankruptcy and a restructuring through closing 130+ locations including 11 in Nevada.
The Company’s Decline Towards Bankruptcy
The gym chain is known for its widespread locations and affordable membership prices. 24 Hour Fitness has more than 430 locations across the country. The gym will close approximately 100 locations across the country as a result of the bankruptcy filing.
The fitness industry has been one of the hardest hit by the pandemic because of how hard it is to maintain social distancing and sanitation in gyms. The company wasn’t reporting financial struggles before the pandemic, but months of being closed can force even the most profitable businesses into bankruptcy. Gold’s Gym, another large fitness chain, also filed bankruptcy due to the pandemic.
24 Hour Fitness Choosing Chapter 11 Bankruptcy
Like Gold’s Gym, 24 Hour Fitness opted for Chapter 11 bankruptcy as opposed to Chapter 7 bankruptcy. Chapter 11 can be used by individuals and businesses. When businesses file Chapter 11, they typically are relatively large and have significant amounts of assets and liabilities. The company’s top creditors will form a panel to oversee major business decisions. Smaller decisions can be left in the hands of ordinary management. Major business decisions include starting or ending a lease, selling assets and inventory, entering contracts, and taking out new loans. The bankruptcy filer may propose a repayment plan, or the panel will come up with one.
Large companies opt for Chapter 11 because it allows them to continue operating. This shows 24 Hour Fitness has confidence that it can return to profitability once the pandemic has ended. Chapter 7 Bankruptcy would liquidate most debts, but would require the business to be shut down permanently. Some companies that have successfully recovered from Chapter 11 Bankruptcy include General Motors, Chrysler, Six Flags, Best Buy, Marvel Entertainment, and Sbarro Pizza.
According to Business Insider, here is a list of 24 Hour Fitness Locations that will be closing in Las Vegas, Henderson, and Reno, Nevada.
Nevada 24 Hour Fitness Locations to be Permanently Closed:
- 4480 E. Charleston Blvd., Las Vegas, NV 89104
- 2893 North Green Valley Parkway, Henderson, NV 89014
- 4440 E. Tropicana Avenue, Las Vegas, NV 89121
- 100 City Parkway, Las Vegas, NV 89106
- 2106 W. Craig Road, North Las Vegas, NV 89032
- 601 S. Rainbow Blvd., Las Vegas, NV 89145
- 9875 S. Maryland Parkway, Las Vegas, NV 89183
- 5035 W. Tropicana Avenue, Las Vegas, NV 89103
- 6155 Neil Road, Reno, NV 89511
What’s Next for 24 Hour Fitness?
The company’s CEO, Tony Ueber, made an accompanying statement when the bankruptcy was filed on June 15, 2020. He stated that because of closing 100 locations in the bankruptcy, 24 Hour Fitness will be able to renovate and upgrade its other 300+ locations. The gym’s customers will have access to all locations until the end of the year once the locations reopen. Despite mass closures, Ueber also told customers to look out in the future for new gym locations opening, as the company now has a better idea of where the most demand is. 24 Hour Fitness has been able to secure $250 million in financing to assist the company through the restructuring process of Chapter 11 bankruptcy. Ueber entirely blamed the coronavirus pandemic for the company’s bankruptcy filing. Overall, 24 Hour Fitness remains optimistic about its future after the coronavirus pandemic and a Chapter 11 Bankruptcy.
If you or your family is in the same situation as 24 Hour Fitness. Whereas, you are struggling to make ends meet or have been impacted by the COVID-19 Pandemic, please do not hesitate to call our experienced Henderson bankruptcy lawyers. Call us at (702) 370-0155 for a FREE CONSULTATION. Plus, our Nevada debt relief team can discuss debt relief options such as: Chapter 7 bankruptcy, Chapter 13 bankruptcy, Vegas Zero Down Bankruptcy, Bankruptcy by Phone, $0 Down BK, Medical Bankruptcy, and Life After Bankruptcy.