"Crunch will emerge debt-free with a leaner, stronger portfolio of clubs in four markets."
Mark Mastrov, Chairman, Crunch
Transaction
After Bally Total Fitness divested Crunch, the Company experienced significant cash flow constraints and filed for bankruptcy protection on May 6, 2009. FocalPoint was hired as the independent financial advisor to Crunch and ultimately sold substantially all of the core assets of Crunch in a Section 363 sale to New Evolution Fitness Company and Angelo, Gordon & Co.
Deal Challenges
FocalPoint believed the best way to achieve maximum value for the Company was through an expedited sale pursuant to Section 363 of the Bankruptcy Code. With news of the bankruptcy in the press, the Company risked losing existing members and potential members who were concerned about Crunch's future.
Solution
FocalPoint helped run an efficient sale process that minimized the period of time in Chapter 11. Establishing a 'stalking horse' bid gave employees and stakeholders comfort that the business would successfully emerge from bankruptcy. Eventually the stalking horse bidder, CH Fitness, Inc., an entity controlled by New Evolution Ventures and Angelo, Gordon & Co., acquired substantially all of the core assets of Crunch. FocalPoint helped sell some of the non-core assets that were not included in CH Fitness' bid to other suitors, including LA Fitness. Crunch then emerged from the bankruptcy under the leadership of a highly qualified management team with numerous years of experience in the health club industry, including Mark Mastrov, founder of 24 Hour Fitness and founder of New Evolution Ventures.