TRX Holdco LLC
, a Newport Beach, Calif.-based fitness company, filed for chapter 11 protection today in the Bankruptcy Court for the Central District of California, along with Fitness Anywhere LLC
dba TRX and TRX Training. The company reports $10 million to $50 million in both assets and liabilities. The debtors are represented by Levene, Neale, Bender, Yoo & Golubchik in Newport Beach and Kroll Securities LLC as investment banker and financial advisor. The jointly administered case number is 22-10948 (TRX Holdco LLC). The case has been assigned to Judge Scott C. Clarkson. Continue reading for more analysis on TRX's chapter 11 filing, and request a trial to access all of Reorg's products.
The company issued a press release today saying that it “has initiated a process to identify a new strategic partner to support the Company in executing its growth strategy.” The release adds that though the company “achieved a record-breaking year in 2020 because of the rapid growth experienced with the COVID-19 home fitness boom, today's action addresses the headwinds facing the business such as increased competition and macroeconomic challenges being faced by many other companies. This process will allow TRX to substantially reduce its debt and more rapidly adjust to post-pandemic consumer demands.”
According to the debtors’ joint administration motion
, TRX is a “digitally-enabled, vertically integrated, omni-channel fitness lifestyle brand with global reach powered by a large community of consumer and trainer enthusiasts,” with its flagship and patented product the Suspension Trainer™, which is a portable fitness and training device/workout tool. In support of their joint administration request, the debtors say that “any efforts to negotiate and seek Court approval of a sale transaction, to formulate a plan of reorganization, and/or to pursue an exit strategy in the Related Debtors’ bankruptcy cases will be undertaken in a joint manner by the Related Debtors.”
“From 2014 to 2018, the TRX business matured after receiving a growth capital investment,” the joint administration motion continues, saying that in late 2018, “an investor group led by Equity 38, LLC acquired the business in a highly structured transaction which included a credit facility with Woodforest National Bank (the ‘Bank’) alongside an equity investment and rollover investment from the previous investors, and, in 2019, various operational improvement initiatives were implemented to restructure the business.” In March 2020, additional equity capital was invested by existing and new investors in a further recapitalization of TRX.
Fitness Anywhere’s top unsecured creditors consist entirely of trade debt, other than a $640,421 claim for professional services held by Duane Morris. Fitness Anywhere’s largest unsecured creditor is Exemplar Design with a $7 million claim, followed by Core Health & Fitness with a $1.9 million claim and Flexport Inc. with a $1.3 million claim. TRX Holdco’s unsecured claims consist solely of trade debt or professional services claims, with the largest trade claim of $41,668 held by Creative Artist Agency, followed by professional services claims held by Cole Schotz, Baker Tilly, Morrison & Morrison, Sterling Legal Solutions Inc. and JMBM LLP.
Reorg First Day will provide a full summary once the first day briefing is complete.