Dentons, Dykema Steer Gold's Gym $100M Bankruptcy Sale

By Elise Hansen
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our daily newsletters. Signing up for any of our section newsletters will opt you in to the daily Coronavirus briefing.

Sign up for our Bankruptcy newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!



Law360 (July 14, 2020, 2:43 PM EDT) -- European fitness company RSG Group, led by Dentons, said Tuesday it is buying Dykema-steered Gold's Gym out of pandemic-induced bankruptcy for roughly $100 million, a move that RSG Group expects will expand its footprint in the U.S. and overseas.

Berlin-headquartered RSG Group GmbH was the winning bidder in Monday's court-approved auction, beating out TRT Holdings Inc., the former majority owner of Gold's Gym and the stalking horse bidder in the Chapter 11 auction. RSG owns brands such as fitness club chains McFIT and John Reed Fitness Music Club, online workouts company Cyberobics, and sports nutrition brand Qi².

The acquisition is subject to final court approval July 24. If approved, RSG will own Gold's 61 company-owned gyms and over 600 franchise-owned gyms. Gold's said in its May bankruptcy filings it was permanently closing roughly 30 of its 95 U.S. gyms, mainly in the St. Louis, Alabama and Colorado Springs markets.

RSG recently entered the Turkish, French and U.S. markets, and the purchase of Gold's Gym will expand its reach in the U.S. and overseas, the announcement said. RSG founder and CEO Rainer Schaller said the acquisition also opens up new opportunities in the franchising realm.

"With the acquisition of Gold's Gym, we are taking on a legacy that I have the utmost respect for," Schaller said in a statement. "Instead of my original idea of slowly approaching franchising in the fitness sector, we are now diving in headfirst. This is the start of a new era for the RSG Group, and I'm really looking forward to its success."

Gold's has focused on four business segments in recent years ⁠— managing company-owned gyms, franchising, licensing and its digital personal training app, the announcement said. Gold's Gym International filed for Chapter 11 protection in early May, saying pandemic-related closures had pushed it toward restructuring.

At the time, the company listed between $50 million and $100 million in both assets and liabilities.

Adam Zeitsiff, Gold's president and CEO, praised RSG's experience in the fitness industry.

"The RSG Group, with nearly 25 years of owner-managed expertise in the fitness sector, lives and breathes fitness," Zeitsiff said in a statement. "For us, this acquisition will open up brand-new opportunities to lead Gold's Gym into a strong future together."

Gold's Gym isn't the only fitness company with pandemic-induced financial woes. Gym chain 24 Hour Fitness filed for Chapter 11 mid-June, saying at the time it had no choice but to seek bankruptcy protection after going two months without revenues because of the COVID-19 pandemic.

Representatives for Gold's Gym and RSG Group did not comment beyond the press release. 

RSG is represented by Casey Doherty and Samuel R. Maizel of Dentons.

Gold's Gym is represented by Danielle N. Rushing, Aaron M. Kaufman, Ariel J. Snyder, Patrick Ryan and Ryan Yergensen of Dykema Gossett PLLC. The company's financial adviser is GlassRatner Advisory & Capital Group LLC, a B. Riley Financial affiliate.

--Additional reporting by Rick Archer. Editing by Gemma Horowitz.

Update: this story has been updated to reflect a responses from Gold's Gym and RSG Group and with additional counsel and adviser information.

For a reprint of this article, please contact reprints@law360.com.

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Beta
Ask a question!