Comments on: Allstar Fitness bankruptcy: Sale/’rejected contracts’ hearing Friday; member response deadline Wednesday

By: Cal

Cal — Fri, 22 Mar 2013 01:09:35 +0000

While on the treadmill today, I saw that Connie Thompson, Komo Problem Solvers, did a story on the banktruptcy and the prepaid contracts. I did not actually hear what was said but this could be picked up by watching the news later tonight or checking on the Komo TV website.

By: WSB

WSB — Thu, 21 Mar 2013 19:53:13 +0000

That’s what I’m writing about. Almost done.

By: Cal

Cal — Thu, 21 Mar 2013 19:38:31 +0000

Based on the notice of appearance and request by the attorneys representing GRE 509 Olive, LLC (an investment group), I suspect that the sale might not go through on Friday. I just read the document posted in pacer.gov.

By: JTB

JTB — Thu, 21 Mar 2013 18:13:47 +0000

Eileen,
I know what the Motion states. Left alone, that would have indicated Sam Adams made a business decision not to honor those prepaid contracts. Why he would honor some and not others isn’t clear. But he is the one who reached out to WSB and represented his intention to honor most of the contracts. I’m willing to give him the benefit of the doubt and see if he follows through on that or not. I can see why it might be legally necessary to selectively reinstate some memberships if the object is to get out from multiple year contracts. But if the WSB blog interview was only intended to dampen opposition to the sale, I believe it will prove to have been a big mistake. I look forward to the WSB update from the latest court filings.

By: Eileen

Eileen — Thu, 21 Mar 2013 17:52:39 +0000

JTB- The Trustee’s Motion states as follows: “The Buyer does not wish to assume the obligations under the remaining long-term, pre-paid members contracts of the Debtor (the “Rejected Contracts”). The parties to these Rejected Contracts are identified on Exhibit B to the Hooper Declaration and represent over 2,100 members”. In other words, to blame the Trustee or anyone else but Mr. Adams for cutting this business deal and actively wiping out 1/3 of club “liabilities” (that is what you are, now that they have your money and owe you services), would be a big mistake.

If the Trustee’s statement does not answer your curiousity concerning Mr. Adams “integrity”, I don’t know what will. Oh — but he did state in another public interview that his favorite book is “The Bible”, so that should make everyone happy about getting screwed with a smile.

By: WSB

WSB — Thu, 21 Mar 2013 17:47:56 +0000

Some interesting docs in the court file this morning … watch for a new story before too long (I hate to promise timeframe because breaking news can throw us topsy-turvy, but it’s a priority) – TR

By: JTB

JTB — Thu, 21 Mar 2013 17:37:57 +0000

I wrote a letter not opposing the sale but opposing the request to reject the prepaid memberships. I believe the selected date is arbitrary and favors one group of Club members over another without a clear basis. BTW, the administrative assistant for the Trustee said the August 2013 date was indeed a typo and should be 2012.

If Sam Adams’ strategy is to honor “99 percent” of the prepaid memberships by reinstating those members after their contracts are rejected, it would seem responsible for him to indicate that now. If that’s not it and his interview with WSB was simply an attempt to reduce active opposition to the sale, shame on him. There is a tremendous amount of Good Will attached to All Star Fitness, the Club, and how Sam Adams handles this membership issue will determine how much he capitalizes on or sqaunders it. My wife and I have five months to go on our bonus period, are on the reject list and will not sign up for the new club if it turns out Sam Adams was lying in the WSB interview. If he had said he couldn’t afford to honor those bonus periods, that would have been an entirely different matter and we would have been more accepting about losing out on the bonus (we feel we earned). But that’s not what he said, so it’s become a matter of his integrity.

By: Jackie

Jackie — Thu, 21 Mar 2013 02:12:30 +0000

Like everyone else, I did not respond because my renewal date is after August 27. I was just told about the list being posted on the blog today.

Guess they were not worried about losing members that pay hundreds of dollars a month for personal trainers. Many of us are on the list and won’t be around.

By: Rarejem

Rarejem — Wed, 20 Mar 2013 15:32:31 +0000

I had the same thing happen as VideoGal. I too changed to month to month. Glad I dodged that bullet. I hope Sam fixes up the club as his ex-partner is doing downtown.

By: Amy

Amy — Wed, 20 Mar 2013 15:28:53 +0000

Does anyone know if there is a way to fax in a response letter?

By: Brewmeister

Brewmeister — Wed, 20 Mar 2013 15:19:01 +0000

JT is exactly right. It sucks that some of us may lose money on the deal but that’s how it works. The court and the trustee’s job is to make sure whoever (Sam) buys the failed business is going to have a fighting chance at success. I can’t imagine the judge allowing a sale WITHOUT a provision to void some contract. I’m guessing Sam really has no say in this provision. However, once the sale in finalized, there is no reason he can’t make good on his words to honor many of the contracts.

In the end, it’s going to come down to Sam on whether he honors contracts. I’m hoping he makes the right decision and honors a lot of them. But, I also understand if he does not. It’s a business that makes money by selling memberships. There is no way the business can survive if there is a large number of long term contracts sitting on the books that bring in no money to the new business. Sucks, but it’s reality. Either way, I will renew. I need heavy free weights and my options are limited.

Members can write all the letters they want to the court but I can assure you, the Judge will probably not even consider them based on the reasons JT mentioned.

By: SAD

SAD — Wed, 20 Mar 2013 10:56:38 +0000

B_10_Proof-of-Claim-12-2012-fillable.pdf This is the form we need to oppose the notice of hearing 1 and 2 Judge Overstreet, From the US Bankruptcy Court West District of Washington (website)

By: Cal

Cal — Wed, 20 Mar 2013 02:30:20 +0000

Thanks to TR and WSB for keeping the community updated on the bankruptcy of Allstar. Though I filed an objection, it is essentially proforma as I doubt that the judge will hold up the sale. In my experience, prepaid contracts are usually voided to give the new owner a clean start.

I think though that perhaps the list of 2100 may not have been compiled accurately, especially if Mr. Adams is considering honoring/reinstating some of the contracts.

I doubt that Mr. Adams wants to tick off 2100 current members — currently stats indicate that for every person receiving bad service, minimally 10-15 people are contacted — often more. Allstar’s reputation is somewhat damaged due to this bankruptcy and the disrepair; the voiding of 2100 contracts would be much worse.

By: VideoGal

VideoGal — Tue, 19 Mar 2013 23:48:25 +0000

You know – I was contacted several times in December by the club wanting me to renew my annual contract. When I said “but aren’t you in Bankruptcy?”, the fellow said – “come in and I’ll have you speak to my General Manager, I’m sure the new owner will honor your contract.”
In the end, I let my membership expire (12 + 6 months free) and now am month-to-month. Whew – thought it sounded too good to be true.

By: JT

JT — Tue, 19 Mar 2013 23:26:14 +0000

I am not aware of any basis TO object. Bankruptcy courts have the authority to void unsecured pre-filing contracts, and usually do, to give the new owner a “fresh start”. It’s harsh, but it’s the way it works. If I am wrong, someone give me a valid reason to object other than “it’s not fair” or “I paid in advance”, neither of which are proper grounds. I hate to lose all that money I paid.