Liberation Investments Launches Legal Action to Compel Inspection of the Books and Records of Bally Total Fitness Holding Corporation

LOS ANGELES, Nov. 11 /PRNewswire/ -- Investment funds Liberation Investments, L.P. and Liberation Investments Ltd. (the "Liberation Funds") announced today that they filed a complaint (the "Complaint") with the Court of Chancery of the State of Delaware in and for New Castle County (the "Court") on November 10, 2005 pursuant to Section 220 of the Delaware General Corporation Law seeking to compel Bally Total Fitness Holding Corporation ("Bally") to permit them to inspect Bally's stockholder list and certain of its books and records relating to, among other things, the (i) adoption by Bally's Board of Directors (the "Board") on October 18, 2005 of a Stockholder Rights Plan (the "Poison Pill"), (ii) independence of certain directors and the circumstances of their appointment to the Board and (iii) Bally's retention of Russell Reynolds Associates ("RRA") to find independent directors and the relationship between RRA and existing directors of Bally.

The Liberation Funds also filed a Motion for Expedited Proceedings in connection with the Complaint as well as certain customary materials.

The filing of the Complaint and related materials follows the October 31, 2005 submission by the Liberation Funds of a letter (the "Demand Letter") to Bally pursuant to Section 220 of the Delaware General Corporation Law demanding the right to inspect Bally's stockholder list and certain of its books and records. The Liberation Funds believe that under Delaware law Bally was required to make the requested materials available for inspection by November 7, 2005. However, Bally has as yet refused to provide the information requested in the Demand Letter and the parties have been unable to reach agreement about the scope of information that Bally will voluntarily provide. As a result, the Liberation Funds filed the Complaint to enforce their legal rights under Section 220 of the Delaware General Corporation Law.

The Liberation Funds have launched this action in order to further their investigation of the adoption of a management protection provision in the Poison Pill. In addition, the Liberation Funds seek to investigate whether all of the "independent" members of the Board are in fact independent of the influence of Bally's management and whether their connections with Bally's management were properly disclosed before they were appointed. The Liberation Funds intend to examine any documentary materials and other information made available to them by Bally pursuant to the Complaint and, if appropriate, use such materials in a legal action against Bally. Moreover, the Liberation Funds are weighing the possibility of running a proxy contest to, among other possibilities, elect directors or change Bally's by-laws to permit the stockholders to vote to remove Mr. Paul Toback as its Chief Executive Officer.

Liberation Investments, L.P. and Liberation Investments Ltd. are private investment funds managed by Liberation Investment Group LLC. Emanuel R. Pearlman is the majority member and general manager of Liberation Investment Group LLC, and as such may be deemed to be the beneficial owner of the shares of Bally owned by the Liberation Funds.