Dallas-based Gold’s Gym International is the latest business to file for Chapter 11 reorganization as companies continue to struggle amid the COVID-19 crisis.
Gold’s holding company, GGI Holdings, as well as other Gold’s Gym affiliates filed their voluntary bankruptcy petition Monday in Dallas federal court. U.S. Bankruptcy Judge Harlin DeWayne Hale has been assigned to the case.
Other bankruptcy matters Kaufman has handled include negotiating $75 million in distressed asset sales on behalf of Texas midstream energy company Connect Transport, the reorganization of retail uniform and apparel distribution company IQ Apparel, as well as the contested sale of Camp Arrowhead, a legacy Central Texas girl’s summer camp that closed its doors after a feud erupted among the owning family after land values started outstripping camp revenues.
In a company statement, Gold’s acknowledged that the coronavirus pandemic “spurred us to take immediate action,” including the company’s decision to permanently close about 30 company-owned gyms. But it clarified that the bankruptcy filing “should not impact our licensing division, is not associated with any of our locally-owned franchise gyms, nor will it prevent us from continuing to support our system of nearly 700 gyms around the world.”
In its voluntary petition, Gold’s listed its assets between $50 million and $100 million and its liabilities in the same range. Its largest creditors are companies who have contingent lease-related claims against Gold’s, but for undisclosed amounts. Universal Music Publishing is also listed as a creditor for a royalty dispute claim.
Gyms are currently among the nonessential businesses in Texas whose doors remain closed by Gov. Greg Abbott’s order, but could re-open by mid-May.
Gold’s is owned by Irving-based TRT Holdings, a privately-held company founded by Texas billionnaire Robert Rowling that also owns the Omni Hotels and Tana Exploration Company.
TRT’s general counsel is Jeremy Williams, a Texas Tech University-trained lawyer who started his career in the corporate group of the firm formerly known as Gardere Wynne Sewell. By the time he left Gardere in 2014 for TRT, Williams was a partner in the firm’s trial section. At TRT, Willams oversees litigation and operational issues for all three companies TRT owns.
On Thursday, another Dallas company, custom men’s clothier J. Hilburn, filed for chapter 11 reorganization in Judge Hale’s court. Its lawyers are Patrick Neligan, Jr. and John Gaither of Dallas bankruptcy firm Neligan LLP.
Previous companies Neligan has represented in reorganization include Bag N’ Baggage, National Energy Group and Bayou Steel Corporation. He has also represented creditors in the Enron and Global Crossing bankruptcies. Gaither has represented the federally appointed receiver to the Stanford Financial Group.
J. Hilman’s largest unsecured creditor is Hong Kong-based TAL Global Alliances Limited, a supplier that lists an unsecured claim for $6.5 million. The company lists its assets as between $1 million and $10 million but its liabilities between $10 million and $50 million.