"Hot Yoga" Chain Twisted Up in Bankruptcy

I have to confess that, upon beginning this blog, I had no idea what “hot yoga” was.  At first I thought it might be reference to Paris Hilton attending a yoga class.  “That’s hot,” y’all.  Apparently it is a yoga class where the heat is cranked up to over 100 degrees while the yoga enthusiasts practice their calling.

"Hot Yoga" and Its Founder

The appropriate name is Bikram yoga, which was created by yoga instructor Bikram Choudhury. Bikram yoga has grown into a multi-million dollar yoga chain. However, Bikram Yoga has recently been under fire for its controversial training methods conducted by its namesake. HBO’s Real Sports recently reported on sexual abuse allegedly conducted by Bikram.

As a result of these allegations, Bikram Yoga filed for Chapter 11 bankruptcy relief on November 9, 2017 in an apparent effort to address the $16.7 million dollars in judgments imposed upon the chain for Bikram’s sexual abuse and harassment against employees and adherents.  Sexual abuse/harassment and predatory behavior by powerful men has dominated the airwaves in recent weeks. Alabama has its own version playing out currently in recent allegations raised against US Senate Republican candidate, Roy Moore.

What Bikram Yoga Can Do Now

Will a Chapter 11 bankruptcy filing allow Bikram Yoga to shed itself of $16.7 million in judgments against it with a bankruptcy discharge?  The answer is likely no.  First, corporations cannot receive a discharge from debts in a Chapter 7 bankruptcy proceeding. This is probably the reason Bikram Yoga filed for Chapter 11 bankruptcy relief. Chapter 11 will allow Bikram Yoga to reorganize its debts through negotiations for debt repayment. It will also allow Bikram Yoga to continue operating its business while doing so.

It is unclear from the news reporting whether the guru himself was jointly liable on the multi-million dollar judgments.  But, if so, he is also unlikely to be able to shed himself of this debt with a bankruptcy discharge.  Section 523 of the Bankruptcy Code excludes from discharge any debt arising from a willful or malicious injury caused by a debtor against another person or the property of another person.  Sexual assault or harassment should certainly constitute willful or malicious conduct.

 

If you are considering a filing for bankruptcy relief and wish to consult with a qualified bankruptcy attorney about your options, please contact one of our locations nearest you in Alabama, Mississippi or Tennessee for a free, confidential consultation.