Shareholder Protests Bally's Reorganization Plan

Law360, New York (June 7, 2007, 12:00 AM EDT) -- As Bally Total Fitness Holding Corp. readies for a stint in bankruptcy, a key shareholder is already threatening to sue the fitness giant over its proposed restructuring plan.

On Wednesday, Liberation Investment Group LLC circulated a letter that voiced its strong opposition to Bally's reorganization strategy, calling the pre-packaged proposal “draconian.”

The investment fund, which holds 11% of Bally's stock, accused the board and management of ditching their fiduciary duties to shareholders by signing off on a plan that would erase all existing equity.

"The board...
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