In re Chi. Invs., LLC
| Decision Date | 24 April 2012 |
| Docket Number | No. 10–23809–WCH.,10–23809–WCH. |
| Citation | 470 B.R. 32 |
| Parties | In re CHICAGO INVESTMENTS, LLC, et al., Debtors. |
| Court | U.S. Bankruptcy Court — District of Massachusetts |
OPINION TEXT STARTS HERE
Charles R. Bennett, Jr., Andrew G. Lizotte, Christopher M. Condon, John C. Elstad, Murphy & King, P.C., Boston, MA, for the Debtors.
Richard C. Pedone, Arthur L. Pressman, Nixon Peabody LLP, Boston, MA, for Pla–Fit Franchise, LLC.
John J. Monaghan, Lynne B. Xerras, Diane Rallis, Nicole Prairie, Holland & Knight, LLP, Boston, MA, for Haymarket Capital, LLC.
Jennifer L. Hertz, Office of the United States Trustee, Boston, MA, for the United States Trustee.
The matters before the Court are the “Motion by Debtors to Assume Executory Contracts (Franchise Agreements) with Pla–Fit, LLC” (the “Motion to Assume”), the Debtors' “Motion to Estimate Claim of Pla–Fit Franchise, LLC” (the “Motion to Estimate”), the “Franchisor's Objection to Haymarket Claims” filed by Pla–Fit Franchise, LLC (the “Franchisor”), “Pla–Fit Franchise, LLC's (i) Objection to Second Plan of Debtors Chicago Investments, LLC et al.; (ii) Objection to Debtors' Motion to Estimate Claim of Pla–Fit Franchise, LLC; (iii) Objection to Debtors' Motion to Assume Franchise Agreements and (iv) Withdrawal of Support for Debtors' First Plan” (the “Omnibus Objection”), the “Response of Haymarket Capital, LLC to Franchisor's Objection to Haymarket Claims” (the “Response to Objection”) and the “Motion by Debtors to Strike Objection to Claim by Pla–Fit Franchise, LLC” (the “Motion to Strike”), all of which were heard in conjunction with an evidentiary hearing on the “Fourth Amended Joint Plan of Reorganization of Chicago Investments, LLC, PF Group, LLC, PF Bost LLC, PF Chel LLC, PF Mald LLC, PF Matt LLC, PF Port LLC and PF Wobu LLC as Modified” (the “Fourth Amended Plan”) and the “Franchisor's Objection to the Debtors' Fourth Amended Joint Plan of Reorganization” (the “Objection to Confirmation”). The present matter, which is essentially a three party dispute marked by frequent position changes and shifting alliances, is an acrimonious battle to determine the future ownership of six fitness centers currently operating under the Planet Fitness name. In sum, the Debtors plan to assume certain franchise agreements, allowing the fitness centers to remain open under the Planet Fitness name, transfer the equity ownership of four of the fitness centers to designated affiliates of Haymarket Capital, LLC (“Haymarket”), the Debtors' largest secured creditor, who will then assume the Debtors' obligation to Haymarket. As part of a global settlement with the Debtors, Haymarket, in turn, will release the non-transferred Debtors and will subordinate its claim to those of other creditors, who will be paid in full with interest through the plan. The Franchisor opposes confirmation on the basis that the franchise agreements in question are not assumable and, without them, the plan is unconfirmable. For the...
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