The Company was a premier health club in a large metropolitan area.  With over 350,000 SF of space, the Club offered various amenities, state-of-the-art exercise facilities and equipment, and dining options delivered with unparalleled personalized service.

The Company had significant real estate loans and a line of credit syndicated to four lending institutions.

The Company experienced significant revenue decline due to COVID-19 forced shutdowns and severely restricted on-site capacity, resulting in revenues dropping approximately 50%.  Membership declined by 10% during this period.  While the Company has adapted its service offerings to provide on-demand and virtual programs, the reduced revenue and in-person attendance have caused negative cash flow, liquidity constraints, and covenant violations under its bank agreement.

The Club completed a multi-million dollar capital call to fund negative cash flow.

FDP was initially engaged to review management's 13-week cash flow forecast model to determine a range of expected negative cash flow and any short-term capital needs.

FDP also prepared and reviewed the annual forecast for the lenders, assuring them the Company had adequate liquidity to operate during the following fiscal year.

Through work on the cash flow and financial forecast, a significant multi-year, multi-million dollar fraud was detected and ended, with litigation brought against the employee who perpetrated the fraud.

The health club survived COVID-19 and improved its financial performance after an employee's fraud was discovered.

The Company also was able to change how it operated the Club and the value it provided to members.