06.12.2005 01:00:00

Bally Total Fitness Files Lawsuit in Delaware Court Seeking to Declare Stockholder Proposal from Liberation Investments Illegal and Invalid

Company Also Files Federal Suit Alleging Liberation Fails To Disclose Material Facts, Including Past and Present Business Relationship with Former Bally CEO Lee Hillman

Bally Total Fitness Corporation (NYSE:BFT), the leading operatorand provider of health and fitness clubs, products and services, todayannounced that it has filed suit against Liberation Investments, L.P.,Liberation Investments, Ltd., Liberation Investment Group LLC andEmanuel R. Pearlman in Delaware Chancery Court requesting thatLiberation's recently announced stockholder proposal be declaredillegal and invalid. The stockholder proposal, which the group hasindicated it plans to introduce at the Company's annual shareholdermeeting scheduled for January 26, 2006, seeks to, among other things,amend the Company's bylaws to give stockholders the power to removethe Company's chief executive officer.

Bally's complaint alleges that the stockholder proposal, "which...purports to eliminate the ability of the Board of Directors... toappoint and remove management, violates the most fundamental conceptof Delaware corporate law - i.e., that boards of directors, notstockholders, manage the business and affairs of a corporation."

The suit argues that in addition to violating Section 141(a) ofthe General Corporation Law which provides that the "business andaffairs of the Corporation shall be managed by or under the directionof the Board of Directors," the stockholder proposal also conflictswith Bally Total Fitness' Certificate of Incorporation, whichexplicitly authorizes the Board to amend the bylaws.

Bally Total Fitness also announced it has filed a federal lawsuitin the U.S. District Court for the District of Delaware alleging thatLiberation has filed various disclosure documents with the Securitiesand Exchange Commission that "contain materially false statements andfail to disclose material facts regarding (their) motives, intentions,and conflicts of interest resulting from their undisclosedassociations" with prior management. As outlined in the complaint,"(t)hough Pearlman masquerades as a disinterested investor with theinterests of all stockholders at heart," the fact is that he has longbeen associated with Bally's former CEO, Lee Hillman, includingserving as a consultant to Bally's management during Mr. Hillman'stenure. It was during that tenure that Mr. Hillman has been deemed byBally's Audit Committee to have created a "culture that encouragedaggressive accounting," which ultimately led to the Company'sfinancial restatements issued on November 30, 2005. The Ballycomplaint contends that Mr. Pearlman and Mr. Hillman have remainedbusiness partners, with Mr. Hillman being part of an investment groupthat backed Liberation.

Moreover, the complaint contends that Liberation's disclosuredocuments, which include the group's stockholder proposal, also"misrepresent the true purpose and effect of the Stockholder Proposaland fail to disclose the fact that the Stockholder Proposal is illegalon its face and invalid under Delaware law and Bally's certificate ofincorporation."

As such, the federal lawsuit seeks to, among other things, enjoinLiberation from continuing to disseminate false and misleadinginformation in direct violation of federal securities laws, includingapplicable proxy laws. It also seeks to enjoin Liberation fromrepresenting to shareholders that the Liberation stockholder proposalis valid and from soliciting proxies for this proposal.

According to the federal complaint, "Over the course of the lasteighteen months, (Liberation) has engaged in a sustained operation tobadger the Company and its Board of Directors, employing aletter-writing and public relations campaign to disparage theCompany's management, structure, intentions, and business plans.(Liberation) has amended their Schedule 13D filings no less thanfourteen times during that period to update their ever-evolvingpositions regarding the Company, and have employed proxy campaigns(both real and threatened), demand letters, and lawsuits to attempt toget their way."

About Bally Total Fitness

Bally Total Fitness is the largest and only nationwide commercialoperator of fitness centers in the U.S., with nearly 440 facilitieslocated in 29 states, Mexico, Canada, Korea, China and the Caribbeanunder the Bally Total Fitness(R), Crunch Fitness(SM), GorillaSports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and SportsClubs of Canada (R) brands. Bally offers a unique platform fordistribution of a wide range of products and services targeted toactive, fitness-conscious adult consumers.

Forward-looking statements in this release including, withoutlimitation, statements relating to the Company's plans, strategies,objectives, expectations, intentions, and adequacy of resources, aremade pursuant to the safe harbor provisions of the Private SecuritiesLitigation Reform Act of 1995. These forward-looking statementsinvolve known and unknown risks, uncertainties, and other factors thatmay cause the actual results, performance or achievements of theCompany to be materially different from any future results,performance or achievements expressed or implied by suchforward-looking statements.

Important Additional Information Will be Filed with the SEC

Bally plans to file with the SEC and mail to its stockholders aProxy Statement. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THEPROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE BECAUSE IT WILLCONTAIN IMPORTANT INFORMATION ABOUT BALLY. Investors and stockholderswill be able to obtain free copies of the Proxy Statement and otherdocuments filed with the Securities and Exchange Commission (the "SEC") by Bally through the web site maintained by the SEC at www.sec.gov.In addition, investors and stockholders will be able to obtain freecopies of the Proxy Statement and other documents filed with the SECby Bally by directing a request to Bally Total Fitness HoldingCorporation, 8700 West Bryn Mawr Avenue, Chicago, Illinois 60631,Attention: Investor Relations: Proxy Request.

A LISTING OF PERSONS WHO MAY BE DEEMED "PARTICIPANTS" IN THESOLICITATION AND CERTAIN INFORMATION CONCERNING SUCH PERSONS IS SETFORTH IN THE COMPANY'S FILING ON SCHEDULE 14A WITH THE SEC ON OCTOBER28, 2005, WHICH MAY BE OBTAINED THROUGH THE WEB SITE MAINTAINED BY THESEC AT www.sec.gov.

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