On December 16, 2020, In-Shape Holdings, LLC and two affiliated debtors (together, the “Debtors” or “In-Shape”) filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code.  In-Shape Holdings, LLC is a health club operator in Stockton, CA.

The company reports $50 to $100 million in assets and more than $100 million in liabilities, including a first-lien revolving credit agreement of up to $17 million and $53 million in term loans.

In-Shape entered into an asset purchase agreement to sell substantially all of the Debtors’ assets with an existing lender and co-investors as the stalking horse, for a purchase price of a $45.3 million credit bid. The stalking horse would assume leases for up to 45 clubs.  In-Shape also entered into a deal to receive up to $30.3M in DIP financing, and asked the court to approve using those funds.

In-Shape had operated 65 clubs prior to the covid-19 pandemic, but has since terminated leases at 21 locations and plans to reject leases for another four clubs.  Top Five Tips for Commercial Landlords Dealing with a Tenant in Bankruptcy is an important read for commercial landlords dealing with a debtor in bankruptcy.

FisherBroyles does not represent the Debtors in this case.  If you have received a notice and have any questions, you should contact Debtors’ counsel.  This blog post is for informational purposes only.

In-Shape’s bankruptcy case was assigned case no. 20-13130 and is being jointly administered before the Honorable Laurie Selber Silverstein in the United States Bankruptcy Court for the District of Delaware.

Carl D. Neff is a partner with the law firm of Pierson Ferdinand LLP, and practices in Delaware. You can reach Carl at (302) 482-4244 or at carl.neff@pierferd.com.