Bankrupt fitness club Gold’s Gym International Inc. is looking to sell itself via auction, with a stalking-horse bid of more than $80 million, Bloomberg Law reported. Judge Harlin D. Hale of the U.S. Bankruptcy Court for the Northern District of Texas yesterday approved bidding procedures for a July 13 auction that will lead to a sale as part of the GGI’s reorganization plan. TRT Gym Asset Holdings LLC, GGI’s majority shareholder as well as an affiliate of the debtor’s post-bankruptcy debtor-in-possession lender, is the lead bidder for the company. Its offer, subject to overbid at auction, will provide $51.3 million to pay off pre-bankruptcy lenders, $20 million for estimated outstanding DIP loans, and between $7 million and $10 million for curing defaults of any contracts or leases that the purchaser may assume as part of the sale. TRT will also pay $225,000 for distribution to unsecured creditors. If another buyer prevails at the auction, TRT will be entitled to receive a break-up fee equal to 3 percent of the purchase price.
