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Employees Try to Keep Weight-Loss Centers Open After Bank Action

April 30, 1993

BLUE BELL, Pa. (AP) _ Hundreds of Nutri-System Inc. employees reported for work as usual Thursday at company-owned weight-loss centers even though they were not getting paid while restructuring talks continued.

″I’ll do it as long as I’m able to do it,″ said Angela Welborn, a center manager in Willow Grove.

Nutri-System said Wednesday that it was closing its 283 company-owned centers in the United States, affecting about 1,800 employees. Its 857 franchised centers and its Canadian operations were unaffected.

The company said Fidelity Bank, the agent for a seven-member consortium of banks, ″had seized all of the company’s cash and had taken control of all of the company’s bank accounts.″

No further statement had been issued by Thursday afternoon.

Paul Levine, spokesman for First Fidelity Bancorporation, the parent of Fidelity Bank, declined comment.

A Nutri-System spokeswoman, who spoke on condition of anonymity, said most employees had shown up Thursday and between 220 and 260 of the company-owned centers were open. But some employees could be seen leaving company headquarters in Blue Bell carrying plants and boxes.

Nutri-System, under former owner Harold Katz, became a large, national weight-loss chain providing pre-packaged, pre-measured meals to dieters.

Katz, the owner of the Philadelphia 76ers, sold his interest in 1986 after 14 years in the business.

Ed Richey, chairman of the Association of Nutri-System Franchises, said in a statement from Phoenix that arrangements had been made for franchised centers to continue receiving food products and other necessary supplies.

The group’s statement said the company’s financial problems resulted from ″corporate overexpansion in the 1980s.″

Regional managers for company-owned centers in the Philadelphia, Pittsburgh and New York areas said Thursday that all their centers were open.

″The people who want to lose weight need us,″ said Terry O’Halloran, in charge of 31 centers in New York City and Long Island. ″We fully, fully believe in our clients’ success. We want to stand by our clients.″

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