Bally Total Fitness Holding Corporation

Company and Case Information

IMPORTANT INFORMATION | INDEX OF FILINGS | SEARCH

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright (c) 2001
Stanford Law School

Bally Total Fitness Holding Corporation Summary: The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements to the public which described the Company's increasing financial performance. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had violated Generally Accepted Accounting Principles ('GAAP') and its own internal policies by prematurely recognizing revenue on certain non-obligatory prepaid membership dues; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) that, as a result, the value of the Company's reported revenues during the Class Period was materially overstated.

Further, the complaint alleges that on April 28, 2004, the Company issued a press release announcing that its Chief Financial Officer and Director, John W. Dwyer, had resigned and that the Division of Enforcement of the Securities & Exchange Commission had commenced an investigation in connection with the Company's announced restatement regarding the timing of recognition of certain prepaid dues. The Company also stated that it had modified its existing internal controls structure, which it believes is now effective. In response to these disclosures, shares of the Company's stock fell approximately 17%, to close at $4.50 per share, on extremely heavy trading volume. On March 15, 2005, the Court appointed a lead plaintiff and on May 23, 2005 the Court appointed lead plaintiff’s counsel. By stipulation of the parties, the consolidated lawsuit was stayed pending restatement of the Company’s financial statements in November 2005. On December 30, 2005, plaintiffs filed an amended consolidated complaint, asserting claims on behalf of a putative class of persons who purchased Bally stock between August 3, 1999 and April 28, 2004, and adding the Company’s former outside audit firm, Ernst & Young LLP as an additional defendant.

According to a press release dated July 17, 2006, Bally Total Fitness Holding Corp. (BFT) said the U.S. District Court of the Northern District of Illinois dismissed the consolidated class action complaint alleging securities fraud by the Chicago-based company and certain of its current and former officers. The court had previously consolidated ten separate actions into the class action complaint, Bally said. The court dismissed the complaint without prejudice, allowing the plaintiffs until Aug. 14 to file an amended complaint.

On August 14, 2006, an Amended Consolidated Class Action Complaint was filed. On September 28, 2006, the defendants responded by filing motions to dismiss the Amended Consolidated Class Action Complaint.

On February 20, 2007, Judge John F. Grady issued an order dismissing the case against Bally's, its individual defendants and Ernst & Young. Appeals were then filed by lead plaintiffs in March.

On July 31, 2007, appellee Bally Total Fitness Holding Corporation filed a petition for relief under Chapter 11 of the United States Bankruptcy Code, and on August 9, 2007, the Seventh Circuit stayed the proceedings against Bally Total Fitness Holding Corporation pursuant to the automatic stay provision of 11 U.S.C. Section 362.

On July 23, 2010, the case was remanded from the U. Court of Appeals back to the District Court for the purposes of conducting class action settlement approval proceedings.

On August 11, 2010, the plaintiff filed a motion for preliminary approval of the class action settlement. The motion was approved on August 23, 2010, by the Honorable John F. Grady.

According to a press release dated September 21, 2010, you are hereby notified that a hearing will be held before the Honorable John F. Grady on November 18, 2010 at 2:00 p.m. in Courtroom 2201 of the U.S. District Court for the Northern District of Illinois, 219 South Dearborn Street, Chicago, IL 60604, for the purpose of determining whether: (a) the proposed settlement of the claims in the above-captioned litigation for the sum of $2 million should be approved by the court as fair, reasonable, and adequate; (b) thereafter, this litigation should be dismissed with prejudice as set forth in the Stipulation of Settlement dated June 29, 2010; (c) the Plan of Allocation of the Net Settlement Fund is fair, reasonable, and adequate and should be approved; and (d) the application by Plaintiffs' Counsel for an award of attorneys' fees for their time devoted to this litigation and for reimbursement of expenses should be approved.

On November 24, 2010, the settlement hearing was held. The Lead Plaintiff's Unopposed Motion for Final Approval of Class Action Settlement 217 is granted. Lead Counsel's Unopposed Motion for Award of Attorneys' Fees and Reimbursement of Expenses 220 is granted. The Civil Case is terminated.

INDUSTRY CLASSIFICATION:
SIC Code: 7997
Sector: Services
Industry: Recreational Activities

COMPANY/ISSUER NAME:	Bally Total Fitness Holding Corporation
COMPANY/ISSUER TICKER:	BFT
COMPANY WEBSITE:	http://www.ballyfitness.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Gladys Petkun, et al. v. Bally Total Fitness Holding Corporation, et al.

COURT: N.D. Illinois	DOCKET NUMBER: 04-CV-3530
JUDGE NAME: Hon. John F. Grady
DATE FILED: 05/20/2004	SOURCE: Business Wires
CLASS PERIOD START: 05/17/1999	CLASS PERIOD END: 04/28/2004
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Bernstein Liebhard & Lifshitz, LLP (New York) 10 E. 40th Street, 22nd Floor, New York, NY, 10016 (voice) 800.217.1522, (fax) , info@bernlieb.com Geller Rudman, PLLC. 197 South Federal Highway, Suite 200, Boca Raton, FL, 33432 (voice) 561.750.3000, (fax) 888.262.3131, info@geller-rudman.com Robinson, Curley & Clayton 300 S Wacker Dr # 1700, Chicago, IL, 60601 (voice) 312.663.3100, (fax) , Squitieri & Fearon LLP (New York) 420 5th Avenue, 18th Floor, New York, NY, 10018 (voice) 212.575.2092, (fax) 212.575.2184, lee@sfclasslaw.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 4

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint - Jury Trial Demanded
Type: Complaint		Date on the document: 05/20/2004
Order
Type: Order of Consolidation		Date on the document: 09/08/2004
U.S. District Court Civil Docket
Type: Docket		Date on the document: 10/14/2004

REFERENCE COMPLAINT

In Re: Bally Total Fitness Holding Corporation Securities Litigation

COURT: N.D. Illinois	DOCKET NUMBER: 04-CV-3530
JUDGE NAME: Hon. John F. Grady
DATE FILED: 08/14/2006	SOURCE: Business Wires
CLASS PERIOD START: 08/03/1999	CLASS PERIOD END: 04/28/2004
TYPE OF COMPLAINT: First Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Berger & Montague PC 1622 Locust Street, Philadelphia, PA, 19103 (voice) 800.424.6690, (fax) 215.875.4604, investorprotect@bm.net _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Class Action Complaint
Type: Complaint		Date on the document: 01/03/2006
Memorandum Opinion
Type: Memorandum		Date on the document: 07/12/2006
Amended Consolidated Class Action Complaint
Type: Complaint		Date on the document: 08/14/2006
Judgment In A Civil Case
Type: Other		Date on the document: 02/20/2007
Memorandum Opinion
Type: Memorandum		Date on the document: 02/20/2007
Notice Of Appeal
Type: Notice of Appeal		Date on the document: 03/22/2007
U.S. District Court Civil Docket
Type: Docket		Date on the document: 06/25/2007
Stipulation Of Settlement
Type: Settlement		Date on the document: 07/01/2010
Lead Plaintiff's Unopposed Motion To File Memorandum Of Law In Excess Of 15 Pages
Type: Motion		Date on the document: 08/11/2010
Order Preliminarily Approving Settlement And Form And Manner Of Notice
Type: Order		Date on the document: 08/23/2010
Notice Of: (1) Pendency And Settlement Of Class Action; (2) Motion For Attorneys' Fees And Expenses; And (3) Court Hearing
Type: Notice		Date on the document: 09/08/2010
Proof Of Claim And Release
Type: Other		Date on the document: 09/08/2010
Notification Of Docket Entry
Type: Other		Date on the document: 11/24/2010
Final Judgment And Order Of Dismissal With Prejudice
Type: Order		Date on the document: 12/01/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 12/01/2010

OTHER DOCUMENTS
Order
Case Name and/or Number: Cosmos Investment Company, Llc., et al. v. Bally Total Fitness Holding Corporation, et al.
Type: Order		Date on the document: 08/06/2007
Order
Case Name and/or Number: Cosmos Investment v. Bally Total Fitness Holding Corporation, et al.
Type: Order		Date on the document: 07/23/2010

WARNING AND DISCLAIMER OF LIABILITY:
The information included on this Web site, whether provided by personnel employed by Stanford Law School or by third parties, is provided for research and teaching purposes only. Neither Stanford University, Stanford Law School, nor any of their employees, agents, contractors, or affiliates warrant the accuracy or completeness of the information or analyses displayed herein, and we caution all readers that inclusion of any information on this site does not constitute an endorsement of the truthfulness or accuracy of that information. In particular, this Web site contains complaints and other documents filed in federal and state courts, which make allegations that may or may not be accurate. No reader should, on the basis of information contained in or referenced by this Web site, assume that any of these allegations are truthful.

Go to Search page | Go to Case Index page | Back to Top

�