24 Hour Fitness Worldwide Inc. said yesterday that it is negotiating with Cerberus Capital Management LP, Sculptor Capital Management Inc. and other investors funding the company’s bankruptcy on potential transactions that would cut debt and get the ailing gym chain out of chapter 11, WSJ Pro Bankruptcy reported. The San Ramon, Calif., company outlined steps it intends to take to adjust its operations to withstand the fallout from the coronavirus pandemic, which has upended the business and the fitness industry generally. Gold’s Gym International Inc., a competitor, filed for chapter 11 protection last month and the parent company of New York Sports Clubs warned this week that it may also seek bankruptcy. During a telephone hearing yesterday, Judge Karen Owens of the U.S. Bankruptcy Court in Wilmington, Del., said that she would grant 24 Hour permission to begin drawing from a $250 million chapter 11 loan, backstopped by investors that own the majority of the company’s senior loans and unsecured bonds. Lawyers for 24 Hour said that the funding is a crucial first step to stabilizing the business, which has generated virtually no revenue since mid-April because of pandemic-related closures. Investors backing the loan include Sculptor, Cerberus, Cyrus Capital Partners LP and Franklin Advisers Inc., court papers said. The group owns more than 60 percent of the company’s $930 million in senior debt and more than 70 percent of $500 million in unsecured bond debt.
