Flight Fit ‘n Fun initiates ABC liquidation process

Flight Fit ‘n Fun kicked off an assignment for the benefit of creditors (ABC) process to liquidate its remaining assets after the indoor trampoline park’s business was decimated by the coronavirus (COVID-19) pandemic, according to court documents filed in the Delaware Court of Chancery.

Prior to the filing of the ABC petition on 28 August, Flight Fit ‘n Fun defaulted its first-priority secured loans with Summit Partners Credit Advisors, owing more than USD 93m, the documents show.

Summit Partners subsequently conducted a public foreclosure sale, and use a credit bid to take control of the equity interests of several entities that are not part of the ABC proceedings as well as certain assets of the ABC-involved entities. After the auction, Flight Fit ‘n Fun still owed USD 28m to Summit. Summit also issued a USD 1.2m secured promissory note to the petitioner to help fund the ABC process.

Flight Fit ‘n Fun is seeking to use the proceedings to liquidate its remaining assets, which consist primarily of furniture, fixtures and equipment, according to court documents. These assets are of nominal value and are not expected to generate significant proceeds.

Flight Fit ‘n Fun is represented by Troutman Pepper as counsel in the proceedings, according to two sources familiar with the situation. Court documents show the company is also working with turnaround advisory firm Rock Creek Advisors as assignee. The assignee is represented by legal counsel from Thompson Hine, according to court filings.

Meanwhile, Ropes & Grey is representing Summit Partners, a representative of Ropes confirmed to Debtwire.

Founded in 2016, Sterling, Virginia-headquartered Flight Fit ‘n Fun was on a growth trajectory prior to the pandemic. The company acquired competitor Jumpstreet Indoor Trampoline Parks in January, adding 11 locations to its roster, and had previously made “a string of other” acquisitions including five-location Canadian chain iSaute, according to a press release.

But the stay-at-home orders precipitated by the pandemic dried up revenue. “As a result of the pandemic, the consistent stream of trampoline park visitors was marginalized to the point that the businesses were operating at significant deficits,” the petition reads.

Businesses can use the ABC process to cut down on the time and expenses of a Chapter 11 or a Chapter 7 process by transferring their liabilities to a firm specialized for the purpose. The process, similar to a Chapter 7 liquidation, is determined by state rather than federal laws. Coldwater Creek recently used the process to liquidate its assets, as reported.

Flight Fit ‘n Fun, Summit Partners and Troutman Pepper did not respond to requests for comment.

By Catherine Perloff