Town Sports International (CLUB) - Get Report, the owner of New York Sports Clubs, filed for protection from creditors under Chapter 11 of U.S. bankruptcy law.
The Jupiter, Fla., company filed its petition on Monday in U.S. Bankruptcy Court for the District of Delaware.
Gym operators nationwide have grappled with the effects of the coronavirus lockdown. They have largely been closed under government orders designed to prevent the disease from spreading.
"Restructuring is the best way to properly respond to the covid-19 pandemic, with the long-term goal to emerge as a thriving powerhouse in the fitness industry," the company said in a statement.
Town Sports said on its website that it is not going out of business and that it facilities will operate as usual. Members should not notice any changes to their gym experience, it said.
The company listed liabilities and assets between $500 million and $1 billion.
The company, which started in 1973, has 185 fitness centers across the country with about 580,000 members.
News that the company was considering filing for bankruptcy protection first emerged in April as the company was facing a November deadline by which a $200 million loan would mature.
Earlier this year, the company's annual report said the U.S. health club industry's revenue grew to $32.3 billion in 2018 from $30 billion in 2017. But it also warned of the risk posed by covid-19.
"Mandatory closures and other related effects of the covid-19 pandemic may cause a material adverse effect to our business," the Securities and Exchange Commission Form 10-K stated.
Earlier in the pandemic, the company was required to close about 95% of its global locations.
Town Sports shares at last check dropped 18% to 22 cents.