Cyc Holdings LLC, which had hoped to salvage its spin-class business through a chapter 11 reorganization, has switched instead to a chapter 7 liquidation, WSJ Pro Bankruptcy reported. The operator of Cycle House, Zengo Fitness and Cyc Fitness centers had entered bankruptcy in October with roughly eight locations in Washington D.C., New York and California, and planned to reduce the number of studios to three or four during its bankruptcy. But last month the company said that a feasible reorganization was looking increasingly unlikely as the coronavirus pandemic continued to severely curtail its business. To buy itself time, Cyc said it wanted to dismiss the bankruptcy, saying chapter 11 proceedings were costly and that a conversion to chapter 7 would be a “death knell.” Cyc said a dismissal was preferable, as it would allow the company to determine whether salvaging the business was possible. The company entered bankruptcy with about $1.8 million in debt, according to a court filing. Heading into a virtual hearing Thursday in U.S. Bankruptcy Court in Wilmington, Del., a landlord objected to the bankruptcy being dismissed, instead preferring chapter 7 as one of the options. Cyc said at the hearing that its prospects had worsened due to a rise in COVID-19 cases in the wake of the holidays, along with worries about a new coronavirus variant. According to statements made in court, the company’s sole remaining employee is President Marc Caputo.
