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December 14, 2006

LOS ANGELES, CA — FocalPoint represented Bodies in Motion as financial advisor in its bankruptcy proceedings.  The Southern California-based health club operator filed for Chapter 11 protection following its unsuccessful expansion into Orange County after a long period of successful growth in the Los Angeles area.
  
Following the Chapter 11 filing, FocalPoint worked with the parties-in-interest to determine that closing the company’s Irvine location was necessary in order to conserve cash flow and maximize remaining asset value.  While a plan of reorganization was considered, the Debtor, in conjunction with the other stakeholders, determined that an expedited sale process pursuant to Section 363 of the Bankruptcy Code was the best way to maximize recovery for its creditors.  

In this regard, FocalPoint identified several parties, including a national chain and a private equity firm, and articulated the benefits of the potential acquisition to bankruptcy-wary buyers resulting in a successful auction.  Ultimately, Meridian Sports Clubs, an independent operator of health clubs in Southern and Northern California, submitted the winning bid, exceeding its stalking horse bid by approximately 50 percent.  FocalPoint is also currently serving as the Liquidating Advisor post-closing by assisting in the wind-down of the Estate.

“Given the ‘service’ nature and high level of operating leverage in the business, a bankruptcy filing has the potential to cause a dramatic negative impact on the financial performance of a health club operator.  Understanding the trade-off between time and value, FocalPoint utilized its experience and resources to move quickly in order to preserve going-concern value for the creditors,” noted Duane Stullich, Managing Director at FocalPoint.  

“FocalPoint supported our efforts in the administration of the case and is continuing to do so in the wind-down of the Estate.  Moreover, FocalPoint conducted a competitive auction that included bidding with complex, non-cash instruments that needed to be valued real-time in order to declare a winning bidder,” added Ron Bender of Levene, Neale, Bender, Rankin & Brill L.L.P., which served as bankruptcy counsel to Bodies in Motion

About FocalPoint

FocalPoint is an independent investment bank, specializing in mergers and acquisitions, private placements (both debt and equity), and financial restructurings/distressed M&A. The firm’s primary focus is on middle-market companies with revenues between $10 million and $250 million in a diverse range of industries.  In distressed situations, FocalPoint works with companies inside or outside of bankruptcy to formulate and 
execute creative strategies that address complex issues by combining its M&A and capital raising expertise.

Please contact Duane Stullich at (310) 405-7070 with any questions about this transaction.