Court continues hearing on FHI motions to close 19 stores, hold store closing sales, use cash collateral

In other court actions taken Oct. 23 in the Ch. 11 bankruptcy reorganization filed by Fitness Holdings International, a date for a continued hearing was set on four additional emergency motions filed by the company.

The hearing, to be held Nov. 5, at 2 p.m., will allow the U.S. Bankruptcy Court, Central District of California, judge in the Los Angeles court to decide on several matters still pending. Matters already approved on Oct. 23 include the court extending filing deadlines for financial papers for the parent of Omni Fitness and Busy Body Home Fitness, paying employees and honoring customer programs. Click here to see that SNEWS® story.

The matters set for a decision in early November include asking for court approval to close 19 locations that Fitness Holdings International (FHI) has told the court are unprofitable. “The debtor’s estate will realize the greatest value for the inventory at the stores designated for closure if the inventory is sold through store closure, liquidation or going out of business sales (or, in some instances, if the inventory is moved to other locations),” the filing stated.

Those stores on the list include eight in California: Los Angeles, South La Cienega Boulevard; Torrance, Hawthorne Boulevard; Mission Valley, Camino de la Reina; Valencia, The Old Road; Thousands Oaks, Thousand Oaks Boulevard; Fremont, Fremont Hub; Antioch, Lone Tree Way; and San Diego, Clairemont Mesa Boulevard.

Two others on the list are in the West including Colorado Springs, Colo.; and the Centennial store, Las Vegas, Nev.

In the East, nine stores in Connecticut, New York, New Jersey and Pennsylvania are affected, including: Orange, Conn., on Boston Post Road; White Plains, N.Y., Maple Avenue; Bedford Hills, N.Y.; Princeton, N.J., Harrison Street; Bedford Road; and in Pennsylvania, York, Loucks Road; Harrisburg, Carlisle Pike; Lancaster, Manheim Pike; Newtown Square, West Chester Pike; and King of Prussia, Allendale Road.

Store closing sales are suggested by FHI to be held in the next 30 days and to be completed no later than the end of November. Court documents filed note the closing sales are “the best and most orderly and efficient manner to wind up operations at those stores while maximizing the debtor’s estate.”

In addition, FHI has asked the court to approve motions requesting it be allowed to:

>> honor the prepetition claims of common carriers so it can continue to receive goods,

>> use cash collateral to pay ordinary operating expenses, and

>> reject unexpired leases as of Nov. 30, 2008, or earlier if the property is returned before that date. 

—Therese Iknoian