SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO RULE 13d-2(a)
Amendment No. 2
Bally Total Fitness Holding Corporation
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
058 73K 10 8
---------------------------------
(CUSIP Number)
Dennis J. Block, Esq.
Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, NY 10038
(212) 504-5555
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
August 26, 2004
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 2 of 10
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1 NAME OF REPORTING PERSON
Liberation Investments, L.P.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a)[ ] (b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
WC
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,447,743
OWNED BY
EACH ----------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 0
WITH
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,447,743
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
1,447,743
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See
Instructions) [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.25%
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14 TYPE OF REPORTING PERSON (See Instructions)
PN
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 3 of 10
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1 NAME OF REPORTING PERSON
Liberation Investments Ltd.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a)[ ] (b)[X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
WC
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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7 SOLE VOTING POWER
0
----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 791,957
BENEFICIALLY
OWNED BY ----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH ----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
791,957
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
791,957
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See
Instructions) [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.32%
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14 TYPE OF REPORTING PERSON (See Instructions)
CO
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 4 of 10
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1 NAME OF REPORTING PERSON
Liberation Investment Group LLC
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a)[ ] (b)[X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
N/A
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 2,239,700
OWNED BY
EACH ----------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 0
WITH
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,239,700
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
2,239,700
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See
Instructions)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.57%
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14 TYPE OF REPORTING PERSON (See Instructions)
OO, IA
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 5 of 10
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1 NAME OF REPORTING PERSON
Emanuel R. Pearlman
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a)[ ] (b)[X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
N/A
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
or 2(e)[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
35,000
NUMBER OF
SHARES ----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,239,700
EACH
REPORTING ----------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 35,000
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,239,700
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
2,274,700
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See
Instructions) [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.68%
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14 TYPE OF REPORTING PERSON (See Instructions)
IN, HC
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 6 of 10
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INTRODUCTION
This Amendment No. 2 (this "Amendment") relates to the Schedule 13D filed
on behalf of (i) Liberation Investments, L.P., a Delaware limited partnership
("LILP"); (ii) Liberation Investments Ltd. ("LILtd"), a private offshore
investment corporation; (iii) Liberation Investment Group, LLC ("LIGLLC"), a
Delaware limited liability company and general partner of LILP and discretionary
investment adviser to LILtd; and (iv) Emanuel R. Pearlman, as General Manager,
Chief Investment Officer and majority member of LIGLLC (collectively, the
"Reporting Persons"), with the Securities and Exchange Commission on June 8,
2004, as amended by Amendment No. 1 filed on July 13, 2004 (the "Schedule 13D"),
relating to shares of common stock, $.01 par value per share ("Common Stock"),
of Bally Total Fitness Holding Corporation (the "Company").
Items 3, 4, 5 and 7 of the Schedule 13D are amended and supplemented as
follows:
Item 3. Source and Amount of Funds or Other Consideration.
The net investment cost (excluding commissions, if any) of the shares of
Common Stock beneficially owned by the Reporting Persons is $9,066,351. The
source of funds for this consideration was working capital of LILP and LILtd.
Item 4. Purpose of Transaction.
On August 26, 2004, LIGLLC, on behalf of the Reporting Persons, delivered
a letter to Paul Toback, President and Chief Executive Officer and Chairman of
the Board of Directors of the Company. The letter, among other things, expressed
concern over the Company's failure to timely file its Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 2004 and urged the Company to
consider and explore various business transactions that could enhance
shareholder value. LIGLLC also indicated that, if necessary, it would consider,
either alone or with other investors, making nominations to the Company's Board
of Directors or proposing one or more transactions designed to enhance
shareholder value. A copy of the letter is attached to this Amendment as Exhibit
6.
LIGLLC also issued a press release, dated August 26, 2004, announcing that
it had delivered the letter described above to Mr. Toback. A copy of the press
release is attached to this Amendment as Exhibit 7.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, the Reporting Persons have the following
interests in the Common Stock of the Company:
(i) LILP beneficially owns 1,447,743 shares of Common Stock and is
the beneficial owner of 4.25% of the Common Stock.
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 7 of 10
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(ii) LILtd beneficially owns 791,957 shares of Common Stock and is
the beneficial owner of 2.32% of the Common Stock.
(iii) LIGLLC, as the sole general partner of LILP and the sole
investment advisor to LILtd, beneficially owns 2,239,700
shares of Common Stock and is the beneficial owner of 6.57% of
the Common Stock.
(iv) Mr. Pearlman beneficially owns 35,000 shares of Common Stock
and, as the majority member and General Manager of LIGLLC,
beneficially owns 2,239,700 shares of Common Stock, and is the
beneficial owner of 6.68% of the Common Stock.
The Reporting Persons in the aggregate may be deemed to own 6.68% of the
Common Stock of the Company.
(b) The table below sets forth for each Reporting Person the numbers of
shares of Common Stock for which there is sole or shared power to vote or to
direct the vote, or sole or shared power to dispose or to direct the
disposition, of the Common Stock:
Mr.
LILP LILtd LIGLLC Pearlman
---- ----- ------ --------
Sole Power to 0 0 0 35,000
Vote/ Direct Vote
Shared Power to 1,447,743 791,957 2,239,700 2,239,700
Vote/ Direct Vote
Sole Power to 0 0 0 35,000
Dispose/ Direct
Disposition
Shared Power to 1,447,743 791,957 2,239,700 2,239,700
Dispose/ Direct
Disposition
(c) The following is a list of all purchases or sales of the Company's
Common Stock by the Reporting Persons within the past 60 days:
(i) On July 20, 2004, (i) LILP purchased 1,105 shares of Common
Stock on the open market, at a price of $5.1500 per share, and
(ii) LILtd purchased 595 shares of Common Stock on the open
market, at a price of $5.1500 per share.
(ii) On July 28, 2004, LILtd purchased 5,900 shares of Common Stock
on the open market, at a price of $5.0500 per share.
(iii) On August 3, 2004, LILtd purchased 10,000 shares of Common
Stock on the open market, at a price of $5.0000 per share.
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 8 of 10
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(iv) On August 4, 2004, (i) LILP purchased 19,520 shares of Common
Stock on the open market, at a price of $4.9865 per share, and
(ii) LILtd purchased 20,980 shares of Common Stock on the open
market, at a price of $4.9865 per share.
(v) On August 11, 2004, (i) LILP purchased 3,102 shares of Common
Stock on the open market, at a price of $4.2500 per share, and
(ii) LILtd purchased 1,598 shares of Common Stock on the open
market, at a price of $4.2500 per share.
(vi) On August 12, 2004, (i) LILP purchased 16,500 shares of Common
Stock on the open market, at a price of $4.2000 per share, and
(ii) LILtd purchased 8,500 shares of Common Stock on the open
market, at a price of $4.2000 per share.
(vii) On August 13, 2004, (i) LILP purchased 16,500 shares of Common
Stock on the open market, at a price of $4.1685 per share, and
(ii) LILtd purchased 8,500 shares of Common Stock on the open
market, at a price of $4.1685 per share.
(viii) On August 20, 2004, (i) LILP purchased 9,636 shares of Common
Stock on the open market, at a price of $4.0337 per share, and
(ii) LILtd purchased 4,964 shares of Common Stock on the open
market, at a price of $4.0337 per share.
(ix) On August 23, 2004, (i) LILP purchased 23,100 shares of Common
Stock on the open market, at a price of $4.0000 per share, and
(ii) LILtd purchased 11,900 shares of Common Stock on the open
market, at a price of $4.0000 per share.
(x) On August 24, 2004, (i) LILP purchased 13,200 shares of Common
Stock on the open market, at a price of $3.9755 per share, and
(ii) LILtd purchased 6,800 shares of Common Stock on the open
market, at a price of $3.9755 per share.
(xi) On August 26, 2004, (i) LILP purchased 73,326 shares of Common
Stock on the open market, at a price of $3.8884 per share, and
(ii) LILtd purchased 37,774 shares of Common Stock on the open
market, at a price of $3.8884 per share.
(d) No person other than each respective owner of Common Stock referred to
in this Amendment is known to have the right to receive or the power to direct
the receipt of dividends from or the proceeds from the sale of such Common
Stock.
(e) Not applicable.
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 9 of 10
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Item 7. Materials to be Filed as Exhibits.
The following exhibits are filed with this Amendment:
EXHIBIT 6 Letter, dated August 26, 2004, from Liberation Investment Group, LLC
to Paul Toback, President and Chief Executive Officer and Chairman of
the Board of Directors of Bally Total Fitness Holding Corporation.
EXHIBIT 7 Press Release, dated August 26, 2004.
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CUSIP No. 058 73K 10 8 SCHEDULE 13D Page 10 of 10
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 27, 2004
LIBERATION INVESTMENTS, L.P.
By: Liberation Investment Group, LLC, general partner
By: /s/ Emanuel R. Pearlman
-------------------------------
Emanuel R. Pearlman
General Manager
LIBERATION INVESTMENTS LTD.
By: /s/ Emanuel R. Pearlman
-------------------------------
Emanuel R. Pearlman
Director
LIBERATION INVESTMENT GROUP, LLC
By: /s/ Emanuel R. Pearlman
-------------------------------
Emanuel R. Pearlman
General Manager
Emanuel R. Pearlman
/s/ Emanuel R. Pearlman
----------------------------------
EXHIBIT 6
Liberation Investment Group, LLC
11766 Wilshire Boulevard, Suite 870
Los Angeles, CA 90025
Tel: 310.479.3434
Fax: 310.479.3363
August 26, 2004
Mr. Paul Toback
Chairman and CEO
Bally Total Fitness Holding Corp.
8700 West Bryn Mawr - 2nd Floor
Chicago, IL 60631
Dear Paul:
As we discussed over the last week or so, I am gravely concerned that the
Company missed its 10Q filing deadline. I am further concerned that the Audit
Committee had not sooner addressed the issues that delayed the filing. The
financial implication of such a delay in filing a 10Q can be devastating. At
this point, I suggest that at the very least it would be essential to candidly
update the capital markets on a regular basis as to the progress of the filing.
Furthermore, as we have discussed I strongly urge you to engage in good faith
negotiations with the several investor groups who have expressed interest in
either refinancing some of your current outstanding indebtedness and/or entering
into value-enhancing transactions for your shareholders. I believe that the
Company should be exploring all transactions in any form that would enhance
shareholder value and, therefore, suggest that the Company form a special
committee of independent directors with the appropriate background to review any
and all expressions of interest in value-enhancing transactions.
Liberation believes in the value of your Company and its franchise but feels
that the current inertia on the part of the Company in exploring value-enhancing
transactions is detrimental to the Company and its constituencies including
employees, creditors, and equity holders. Maintaining the status quo is simply
not in the best interest of shareholders and, if necessary, we may attempt,
alone or with other investors, to make board nominations or propose
transactions.
I would be more than happy to assist in any way, and it is my goal to work with
the Company, if at all possible, to create value for all shareholders. If you
have any questions please feel free to call me at the above-listed contact
information.
Very truly yours,
/s/ Emanuel R. Pearlman
Emanuel R. Pearlman
Manager
cc: Board of Directors
EXHIBIT 7
Contact:
Emanuel R. Pearlman
Liberation Investment Group, LLC
11766 Wilshire Boulevard, Suite 870
Los Angeles, CA 90025
310.479.3434
LIBERATION INVESTMENT GROUP DELIVERS LETTER TO BALLY TOTAL FITNESS
Los Angeles, CA - August 26, 2004 - Liberation Investment Group, LLC
announced today that the following letter was sent to Paul Toback, President and
Chief Executive Officer and Chairman of the Board of Directors of Bally Total
Fitness Holding Corporation (NYSE: BFT), on August 26, 2004:
Liberation Investment Group, LLC
11766 Wilshire Boulevard, Suite 870
Los Angeles, CA 90025
Tel: 310.479.3434
Fax: 310.479.3363
August 26, 2004
Mr. Paul Toback
Chairman and CEO
Bally Total Fitness Holding Corp.
8700 West Bryn Mawr - 2nd Floor
Chicago, IL 60631
Dear Paul:
As we discussed over the last week or so, I am gravely concerned that the
Company missed its 10Q filing deadline. I am further concerned that the Audit
Committee had not sooner addressed the issues that delayed the filing. The
financial implication of such a delay in filing a 10Q can be devastating. At
this point, I suggest that at the very least it would be essential to candidly
update the capital markets on a regular basis as to the progress of the filing.
Furthermore, as we have discussed I strongly urge you to engage in good faith
negotiations with the several investor groups who have expressed interest in
either refinancing some of your current outstanding indebtedness and/or entering
into value-enhancing transactions for your shareholders. I believe that the
Company should be exploring all transactions in any form that would enhance
shareholder value and, therefore, suggest that the Company form a special
committee of independent directors with the appropriate background to review any
and all expressions of interest in value-enhancing transactions.
Liberation believes in the value of your Company and its franchise but feels
that the current inertia on the part of the Company in exploring value-enhancing
transactions is detrimental to the Company and its constituencies including
employees, creditors, and equity holders. Maintaining the status quo is simply
not in the best interest of shareholders and, if necessary, we may attempt,
alone or with other investors, to make board nominations or propose
transactions.
I would be more than happy to assist in any way, and it is my goal to work with
the Company, if at all possible, to create value for all shareholders. If you
have any questions please feel free to call me at the above-listed contact
information.
Very truly yours,
/s/ Emanuel R. Pearlman
Emanuel R. Pearlman
Manager
cc: Board of Directors
-2-