Followup: Bankruptcy trustee appointed for Allstar Fitness

January 14, 2013 at 10:33 pm | In Allstar Fitness bankruptcy, West Seattle businesses, West Seattle news | 39 Comments

We’ve been asked multiple times in the past few days about the status of popular North Delridge health club Allstar Fitness, three months after our report about its Chapter 11 bankruptcy-reorganization filing. Here’s an update: Court documents from last Friday say a federal bankruptcy judge has appointed a Chapter 11 trustee for the club’s parent business West Seattle Fitness. WSB’s Katie Meyer contacted the club today for comment and spoke with general manager Ramon Velasquez, who confirmed that a trustee would be coming in to operate the club, assess its finances, and prepare it for a potential sale. (The role of a trustee is explained on this federal-government webpage.) Velasquez says the emphasis is on keeping the club open and protecting its members during this process, but any other specifics are pending the arrival of the trustee. We plan to check back next week. The club’s ownership voluntarily filed for Chapter 11 almost five months ago, and summarized the reason in one document from the case file as wanting to reorganize and stay in business while resolving a “dispute” with their landlord. Photo credit: King County Assessor website

39 Comments

  1. I love that gym. It’s not perfect, but I’ve been a member with AllStar for over 16 years and have been attending the West Seattle location since it opened in 2001; I’m there 4-5 days a week. The parking lot’s packed with cars several times a day. The West Seattle gym has some of the best instructors and classes in town. The variety of classes the gym offers is the best in the city. It will be a shame if it shuts down.

    Comment by kate — 10:48 pm January 14, 2013 #

  2. I can’t really imagine it shutting down without someone else coming and taking over – continuing it as a Gym. It sure seems to me to have a lot of customers. Maybe (surely) I don’t understand the details of how the gym industry works – there may be a lot more to the economics of this than the packed parking lot would imply….
    I hope the gym doesn’t go away. I’ve generally been pretty happy working out there since 2002 when I joined. I wish they kept the pool a little cleaner – but compared to 24 hour fitness downtown, it’s pristine.

    Comment by vanceg — 11:29 pm January 14, 2013 #

  3. I’d be interested in the fate of the BGP LLC investors stakes that have been solicited over the last few years. There were substantial mailings in 2012 soliciting members to be LLC investors so that AllStar could buy a health club opportunity in the Issaquah area.

    Received the first interest payment late, with no explanation, and have received no additional communications.

    Comment by Eddie — 5:53 am January 15, 2013 #

  4. This is sad for the many West Seattlites (and others) who work here. Members too. Hope this is resolved soon for them as well as for our community! Don’t want a huge empty building!!

    Comment by credible witness — 6:57 am January 15, 2013 #

  5. I have been a member at Allstar for the last 5 years and over the last year the club has been going downhill. The machines are constanly broken, the women’s locker room is a mess, the pool area is dirty and the hot tube is often out of service. If this does not improve in the near future I will be looking to find a new gym.

    I sure hope that this bankruptcy improves the quality of the gym.

    Comment by KD — 7:32 am January 15, 2013 #

  6. I hope it manages to survive on a wing and a prayer, at least until LA Fitness opens. I believe many will jump ship to a club offering state of the art equipment and facilities well maintained and brand spanking new. Judging by the new LA Fitness in Bellevue, All Star will really need to raise their bar, many of their machines are dated and broken. There appears to be little concern in repairing machines that remain out of order for days if not weeks. I for one, will leave for a superior workout experience in a more efficient environment. This is not to discount the staff or excellent personal trainers, just the facility and equipment that is obviously showing wear, poor maintenance, and lack of attention.

    Comment by Amrakx — 7:50 am January 15, 2013 #

  7. I’m no gym expert but I think allstar or the new owners should try and capture a large missing fitness population of families looking for “game” style fitness (i.e. not weights or treadmills). Since we already have a couple standard gyms (24 hour, anytime, fitness together, snap fitness, LA fitnes “soon”)and trainer gyms (cross fit, x gym) and also a family gym (ymca). I think they can change it up a little and grab a different segment. What I see missing is indoor basketball, indoor tennis, indoor soccer, and maybe some master swim classes and kids swim teams. Keep a small section of free weights and aerobic machines for the occasional traditional workout.
    I’m not a gym member but that’s because they don’t offer what I want. An example of what would be an arbor heights club combined with a YMCA.

    Comment by wsea — 9:27 am January 15, 2013 #

  8. I agree with above comments. The wear and tear on the gym has not been properly addressed. I, too, hope a new owner will take advantage of the potential of that space. It has great light and windows. It’s near Longfellow Creek which is huge bonus. It’s fun to go for a hike outside near the gym and then hit the pool/sauna. There’s tons of parking. The other great thing about AllStar is that they don’t have your average gym yoga. There’s great attention spent on the spiritual aspects of a working out. Lights are dim during classes, proper music is played, different levels offered with different flavors of teaching. They also offer NIA and Zumba taught by really talented people. I’m keeping my fingers crossed and looking forward to a brighter future for the gym, members, and employees.

    Comment by kate — 9:33 am January 15, 2013 #

  9. I still have 1 yr on my prepaid contract. What happens if they close?

    Comment by adam — 9:57 am January 15, 2013 #

  10. Agree with some of the comments, but certainly hope it does not become an LA Fitness. Ugh. Those chains are loud and seem to just offer “in” classes.

    I love All Star and am there several times a week, but they do need to fix the machines and it would be great if they could buy new mats. Hope this proceeding goes smoothly and they can bring things back up to standards – without going to a national chain.

    Comment by SuitsAreNotBoring — 10:03 am January 15, 2013 #

  11. SANB – If you missed previous coverage, the LA Fitness allusion is because that’s now the retail tenant for Spruce West Seattle, the project that will be built at “The Hole” (Fauntleroy/Alaska/39th). – TR

    Comment by WSB — 10:08 am January 15, 2013 #

  12. I joined AllStar because they were the only game in town with lots of kickboxing classes–and they are FANTASTIC. The small women’s gym is awesome, too. I hope that stays but, honestly, it’s the quality of the instructors who matter and if AllStar closes for some reason, the instructors can still teach at other locations.

    Comment by Kelly — 10:50 am January 15, 2013 #

  13. Curious why my comment from 5:53am this morning didn’t “stick” in this list of comments?

    “I’d be interested in the fate of the BGP LLC investors stakes that have been solicited over the last few years. There were substantial mailings in 2012 soliciting members to be LLC investors so that AllStar could buy a health club opportunity in the Issaquah area.

    Received the first interest payment late, with no explanation, and have received no additional communications.”

    Comment by Eddie — 1:16 pm January 15, 2013 #

  14. I don’t have a 5:53 am comment in this thread, sorry. This is the first one I’ve seen from your e-mail address (visible only in the admin end) in a long time.

    Comment by WSB — 2:44 pm January 15, 2013 #

  15. Like Kate, I have been a member of Allstar for a very long time. While the downtown clubs were good, I switched to the West Seattle Club once it opened. Over time this club has started to degrade and has been rapidly been going down this past year.

    I noticed yesterday that most of the equipment in the personal training area has disappeared. And that equipment belonged to one of the trainers,apparently, who had loaned the equipment to the Club and the other trainers to use. Taking it out, tells volumes about how the employees feel about the club and its management.

    The best that could happen would be if a new owner came in, honored the membership agreement that all prepaid members have, brought the club up to its former standard — even better updated the equipment!

    Comment by cal — 2:45 pm January 15, 2013 #

  16. My membership is up in June and I can tell you I won’t be renewing unless some serious changes are made. I’ve been going there since 2007, and the quality of the club this last year has left me very frustrated. I am sick of machines being out of order and the locker rooms being in complete disarray.

    Comment by Big G — 3:32 pm January 15, 2013 #

  17. regarding the missing personal training equipment, if it does close, his equipment could be stuck inside. He still works there so it sounds like he is protecting his investment, which is smart. In talking with a few of the trainers, they are staying on and are still training and trying to stay positive. I too have recently prepaid for a year and do not want to see it close.

    Comment by Anna Eileen — 6:18 pm January 15, 2013 #

  18. LA Fitness ? Don’t “holed” your breath. The last time I looked, there was still nothing but a big hole in the ground there. Even if they started construction tomorrow, I expect it would be a couple of years before the project is finished.

    Comment by DMS — 6:24 pm January 15, 2013 #

  19. It would likely be about a year and a half. And there is reason to believe, from our most recent encounter from the project team as well as sightings around the site, that it won’t be long. Actually they might be closer to a year-long project given that the excavation for the underground parking is already done. – TR

    Comment by WSB — 6:34 pm January 15, 2013 #

  20. I’ve been a member of AllStar for 10+ years, going 4-5 times a week for aerobics and weight machines. There is the occasional broken machine (both aerobic and weight), but I think it has been more or less the same for many years. I haven’t noticed any big decline in quality or cleanliness. When I joined, it beat the sh** out of the facility I was then using, and still does. Where are you going to go in WS that’s better? It’s sure not the Y.

    Comment by detaildevil — 6:45 pm January 15, 2013 #

  21. The personal training equipment was removed last weekend by the personal trainer who owns it because he retired and no longer works there.

    Comment by m — 11:58 pm January 15, 2013 #

  22. Reposting my comment from 1/14 around 11:30pm since it is no longer here:

    I for one am happy to see them go. They swindled me out of an extra payment even though the month they were charging me for hadn’t started and my contract was up. This was three years ago, and I will never go back to to them.

    Comment by avrian — 12:45 am January 16, 2013 #

  23. I hope that things can be worked out, the pool classes and the fit and fabulous over 50 classes are excellent. The upkeep needs to improve, but the trainers are excellent. Keeping fingers crossed that this can be resolved and the club stays open.

    Comment by carol — 7:12 am January 16, 2013 #

  24. I still haven’t received the first interest payment on my ‘investment’. After reviewing the bankruptcy documents, I truly believe that Bob Padgett used the funds he raised from us to bail the club out of hock in the spring so he wouldn’t lose everything – he was in pretty deep for back rent and had a $400,000 court bond to pay to keep the club open. I have given him until Feb. 1 to pay me, at which time I plan to file a claim against him for the full amount in small claims court. I also plan to file a securities fraud alert for soliciting investors under false pretenses, and have sent the note we signed to the investigator who is handling the Allstar bankruptcy. I would urge everyone who got burned in this scam to take similar action. I’d like to see Bob’s shady business practices exposed so that he cannot continue defrauding our community or other communities.

    Comment by burned — 5:55 pm January 16, 2013 #

  25. Burned – Me too. I did get my first payment in Oct (had been due in Sept), but only after sending a certified letter to him at the business location and his home. I received a check in the mail with no explanation. I sent a follow up letter acknowledging that I had received the check, and that he both owed me the agreed to late fee, and some explanation. Received nothing in return.

    I’ve received no communication from anyone on this subject – it sounded like some members had received notices when this first came out.

    How did you get access to the bankruptcy documents? Did you have to sign up for a “viewer service” via the court website? How did you find the investigator? Can you share that contact info please.

    Comment by Eddie — 7:24 pm January 16, 2013 #

  26. I hope the trustee will make the needed repairs to this gym. I have been a member for many years and have brought numerous issues to management from non-working outlets in the locker room, items needing cleaning and repairs to issues of members not following rules. Especially those around the pool including children in the pool w/o parents, in the pool during lap swim times and under aged kids in the hot tub. If All Star cannot address the many maint. issues, I’ll be ready to jump ship when my membership comes due.

    While I appreciate that parents want to workout, not all of us adults and seniors want to have your children in the pool when we are there during adult time. That’s why we do not belong to the Y. LA Fitness would give us a much needed additional pool in the area and hopefully a cleaner one.

    Comment by jm — 8:52 pm January 16, 2013 #

  27. Eddie

    Bankruptcy docs are online and public – my bro who is a lawyer (unfortunately not in WA) downloaded them for me. I have asked him for the link and will post the link here when I get it.

    As for the bankruptcy investigator, only a hard copy address was provided on the BBB site – there was an alert there that the business was going through a bankruptcy so I just wrote a letter and attached a copy of the note. It’s mainly an FYI for the investigator that Bob Padgett is shady. Our investment was with another LLC that Bob probably created for the sole purpose of raising the money. Unfortunately that protects his other assets. Not sure there’s any recourse for us at this point, but I’d like to see him investigated for securities fraud at the very least. The more people who file complaints with the securities commission, the more likely they are to investigate this scam.

    Here’s a link to the website to file the complaint. This would constitute a ‘Fraudulent investment scheme, such as a Ponzi scheme or the promise of high-yield returns’

    https://denebleo.sec.gov/TCRExternal/index.xhtml

    Comment by burned — 1:33 pm January 19, 2013 #

  28. Thanks Burned – looking forward to the link. From what I can see, I have to sign up and pay to see the docs online via the court.

    Comment by Eddie — 8:03 pm January 19, 2013 #

  29. What’s your email Eddie? I can send you the docs. There are 3 pdf files – should go via email easily.

    Comment by burned — 4:52 pm January 20, 2013 #

  30. One change I’ve seen already is the funky equipment in the training area is gone…like poof gone. Like those stand up electronic machines that were intended to melt the pounds away : )

    All funded my “Dom” I’m told. So all the stuff that said “don’t use this equipment…it’s owned by Dom” is now gone.

    Thought that was weird anyway having some stuff you could use and some stuff you could not…even a foam roller that he owned.

    Hoping this gym keeps it’s operations going. The classes are great and even tho the equipment is getting a bit long in the tooth, it’s still a good gym for the $$ (especially if you pay in annually and get extra months). Cheers.

    Comment by supernova72 — 6:23 pm January 20, 2013 #

  31. Burned:

    eddie xlongo “at” hotmail com

    you should be able to “fix” that addess by removing the spaces, replacing the “at” and adding the “dot”

    Thanks!

    Comment by Eddie — 10:35 am January 21, 2013 #

  32. Thanks to the WSB for keeping us West Seattlites up to speed on what’s going on with the gym – very helpful!

    Comment by Amy — 12:49 pm January 21, 2013 #

  33. Burned – thanks for the documents. Very interesting saga, going on for much longer than I thought. Although the BGP III LLC isn’t mentioned in the documents, he went about advertising it and gathering funds – at least from me – well after he was in deep doo-doo. I find it amusing that his pitch for the “new mega-health club in Issaquah” that he was seeking investors for last year (ending in May 2012) is still on the All Starr website today – under investor relations http://allstarfitness.com/investor.html

    Also, interesting to note that he took a $199k salary draw in 2010 or 2011 – all the while the enterprise was sinking like a rock.

    I guess I need to figure out my next step.

    Comment by Eddie — 8:42 pm January 21, 2013 #

  34. I’m also a duped investor and agree, as it turns out, that BP appears to have sought the funds under false pretenses. I sent BP an email recently about the missed interest payment and failure to provide promised followup info and advised I wanted a response by Jan 31. Assuming no response, I am prepared to seek legal involvement to see if anything is possible, and I will file information with County Prosecutor and State AG offices regarding fraud. “Burned”– can you provide me a copy of the pdf’s re the B/R of the West Seattle Fitnesses’s parent org? Send as attachments to rpr20071@gmail.com. Anyone interested in “pooling” for a legal consultation?

    Comment by RPR — 11:46 am January 22, 2013 #

  35. Has anyone been able to confirm that a club in Issaquah that Padgett was legitimately trying to purchase even exists?

    Comment by RPR — 12:11 pm January 22, 2013 #

  36. Eddie. Yes, from what I recall there was trouble with the club starting in 2010. As Bob was drawing his $199k / year, the club wasn’t paying rent. RPR – I’ll send these out to you tomorrow, and anyone else who wants them just say the word.

    I’m definitely interested in joining forces for legal advice, and to develop a strategy for moving forward. We need to figure out a way to reach out to other folks who may have been victims of this scam. $5k is small change, but if we can show that Bob was on his way to meeting his ‘fundraising’ goal of $500k w/ 100 investors, we may be able to get a lawyer interested in taking our case.

    Will send docs. Stay tuned…

    Comment by burned — 2:14 pm January 22, 2013 #

  37. The club is for sale, Bob is a lame duck by true definition. Also the pool was shut down for the time being. They are loosing more and more money. It looks like they might have to close the doors permantly. They said they arent allowed to sell me a pre-paid membership, which is how they make most of there money. Do the math folks

    Comment by John — 2:40 pm January 28, 2013 #

  38. Any word on when the pool will reopen? I heard on Saturday that the health dept shut them down due to rust falling from the ceiling into the pool. The front desk person said she thought the pool would reopen “in a couple of days”. However when we looked inside, it was hard to tell if any work had been done.

    Comment by Roscoe66 — 10:56 pm January 28, 2013 #

  39. If you are a pre-paid customer you should be more worried about the fact if the gym goes out of business which it looks like it might, you wont get any money back. It is that bad from what I can see. And anybody thinking about joining needs to think twice because of that fact. Sign up one day, show up to workout the next and find a closed sign on the gym.

    Comment by John — 10:03 pm January 29, 2013 #

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