Tru Grit Fitness details events leading to Chapter 11 filing

By Sarah Lizee

Olympia, Wash., Dec. 16 – Tru Grit Fitness LLC detailed the events that led up to its Chapter 11 filing in court documents filed Thursday with the U.S. Bankruptcy Court for the District of Nevada.

The company was formed in 2020 as a provider of professional grade fitness equipment to capitalize on the demand for home-gym equipment following the onset of the Covid pandemic.

Tru Grit sells fitness equipment to both large retailers, like Target and Best Buy, and directly to consumers.

Sales slowed significantly as big-box retailers started procuring their own private label in-home fitness equipment and the pandemic waned, allowing public gyms to reopen.

By June 2021, many of the debtor’s major retail consumers slowed production requests and canceled pending orders. As a result, the debtor was left with $20 million in fitness inventory selling much slower than projected, leading to increased storage costs.

Also, the shortage of shipping containers at the height of the pandemic led to higher shipping costs.

The Chapter 11 case was also precipitated by the company’s “oppressive financing arrangement” with EFP Funding Solutions, LLC, the company said.

Tru Grit said it has repaid over $23 million of the roughly $28 million in principal funded by EFP or its predecessors, but EFP claims that as of Oct. 1, the total amount due is at least $52.44 million, plus interest accruing at the default rate, costs, disbursements and attorneys’ fees.

On Dec. 6, the lender filed a complaint for breach of contract, breach of guarantees, appointment of a receiver and other causes of action in the California Superior Court, San Diego County.

As previously reported, though the company is seeking court approval to use the cash collateral of EFP, the lender gave notice that it does not consent to the cash collateral use.

The lender said it has a properly perfected security interest in the collateral, and no other entity has a debt secured by the collateral at this time.

Tru Grit is a Las Vegas-based professional fitness equipment company. The company filed bankruptcy on Dec. 7 under Chapter 11 case number 22-14320.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.