NewsBlink Fitness, an Equinox-owned chain with more than 100 locations, said Monday that it was filing for bankruptcy to help facilitate a sale of the business and will be closing 10% of its locations. Patrick Collins shared his insight with Newsday on the gym operator’s recent filing.
Patrick Collins, partner at Uniondale-based Farrell Fritz and a specialist in bankruptcy and creditor rights, said debt can often be behind a company’s decision to file for bankruptcy, even if a business is growing its sales and customer base.
In 2020, due to regional lockdowns, Blink said it had to close operations for nine months, relying on loans and landlord concessions to keep the business afloat, according to bankruptcy court documents.
“Even though COVID is a couple years in the past, it’s possible that the leveraging is coming home to roost,” said Collins, who is not involved in Blink’s bankruptcy case.
“What they did during that time to keep the business alive was obtaining additional liquidity by borrowing money,” Collins said. “In the words of the company, those efforts left the company overleveraged.”
Read the full article on Newsday here:
Blink Fitness files for Chapter 11 bankruptcy, to close 10% of locations – Newsday
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