Allstar Fitness bankruptcy: What prospective owner Sam Adams says about contract cancellations and club renovations

March 10, 2013 at 8:30 pm | In Allstar Fitness bankruptcy, West Seattle businesses, West Seattle news | 62 Comments

By Tracy Record
West Seattle Blog editor

Allstar Fitness‘s prospective new owner Sam Adams says the court documents don’t tell the whole story.

After members of the club, which is in Chapter 11 bankruptcy, contacted WSB yesterday about court documents they’d received, we reported on those documents and other recent filings, which ask a judge to “reject and terminate the contracts” of “long term prepaid members” who bought their memberships before last August’s bankruptcy filing (reported here in October), without otherwise defining “long term prepaid,” but saying that would be about 2,100 contracts.

Even before that, we had messages out seeking a conversation with Adams, the former Seahawks (and other teams) pro football player turned health-club entrepreneur, to find out more about his plans for West Seattle’s biggest fitness club, which he says he will rename the West Seattle Athletic Club.

This morning, he called. He claims that while the court documents say about 2,100 membership contracts are proposed for termination, he intends to honor “99 percent of them.”

Adams’ prospective purchase was announced two weeks ago. Today, he told WSB he expects to take over the club on March 25th, if the sale is approved at a court hearing March 22nd – the hearing mentioned in the court documents received by members. “The first thing I plan on doing is honoring the legal prepaid memberships,” he insisted, while also noting that the court “legally cannot make me honor the prepaid memberships.”

What is considered an “illegal” prepaid membership? we asked.

“Some people gave (the current ownership) money to invest in Allstar, and he gave them lifetime memberships,” Adams said. “I’m sorry, but those are deals they cut with him – they have to talk to Bob (Padgett) about them.”

Adams also mentioned, however, that he believed – but wasn’t certain – two years was the limit of a “legal” membership. In general, though, especially for those who signed a contract “within the past year or so,” he said, “regardless of whether they paid me or not, they paid someone, and it’s the right thing to do” to honor the contracts.

He says he doesn’t know exactly how many people that involves, because “we haven’t fully dug in because we don’t own or operate the club … but I don’t anticipate more than a handful (of memberships will be cancelled).”

Adams had words of criticism for the bankruptcy-declaring ownership and investments he says they solicited; court documents say trustee Richard Hooper “continues to investigate the financial affairs of the Debtor and believes there may have been a number of preferences paid and fraudulent transfers made during the course of the Debtor’s operation of the Club, both pre and post-petition.” Adams said that he “took over several (of the ownership’s) clubs” and says that at those facilities he saw “advertisements for people to invest in (another proposed club), a $5,000, $10,000 membership … three years out, five years out, ten years out.”

He said he believes that in particular, people who “bought a membership within the last year (are) safe,” while reiterating that they won’t know for sure which memberships are “legal” and which are “illegal” until “we get into the system.”

He expected that would be around March 27th, and said that members would be contacted then.

Meantime, after some discussion of the membership-cancellation situation, he moved into his plans for the club. “We want people to come back,” Adams declared, saying that membership is down. “We are going to spend a significant amount of money remodeling the building. It’s not an investment in the building, it’s an investment in the community, (for) a topnotch place. We’re not a big franchise – we’re a locally owned health club for local people.” (Adams lives in Kirkland.) “It’s going to be more than an average health club, more than a 24-Hour or L.A. Fitness. People in West Seattle want ‘more than average’.”

He promised not only an upgraded facility but also “special classes” and new equipment – “going to replace the older equipment with some newer lines … some astroturf area for some more-modern … exercises. We’re going to add a ton of equipment, but not so much you can’t move; we’re going to strategically place it so you’ll be able to work out. You’ll come in and see a nice weight room; we’re going to pull out some of that old carpet …”

He also promised to clean up “all the wet areas … right now I feel like I have to take a tetanus shot to walk through there, and I don’t think that’s cool for the members.”

While he says the swimming pool – which was closed for a while recently under current management – might have to shut down for an unspecified time to be cleaned up, he does not anticipate having to close the club itself for any of the promised remodeling or upgrades. “It’ll be a little intrusive at times,” he allows, but he expects much of the work to be done at night, noting that he himself “doesn’t sleep very much.”

“I got into this business to give people a comfortable place to work out,” he added. “Our first line of business is to contact members and welcome them back, to let everyone know we want people to come back to the club.” He said he realizes “there are a lot of people who left and are unhappy.”

In fact, Adams said, he had been trying to “take over and buy” the West Seattle club for two years, adding “they didn’t have to go through this (bankruptcy).”

We asked him what happened with the downtown club that he no longer owns, mentioned by commenters in some of our previous coverage. He replied that he used to have a business partner with whom he split; that partner, he says, was more interested in “the downtown market” and Adams himself “wanted to do more of the community market,” so they parted ways.

Meantime, he believes that West Seattle Athletic Club will “be an integral part of the community … we’re excited about the community, and excited about being part of it.”

First comes the March 22nd hearing, at which Judge Karen Overstreet will be asked to approve the sale, 9:30 am at the federal courthouse downtown; responses to the proposed terms need to be sent in ASAP, according to the documents, which you can see here if you did not receive a copy. (They also mention an April 5th hearing asking permission to stop sending out en-masse notices about proceedings, such as the very notice received this weekend by members who contacted us about it, resulting in our reports; if no responses are received to that, the documents say, the motion may be granted without a hearing.)

62 Comments

  1. Mr. Adams,

    May we PLEASE have some working fans in the class rooms? It’s like being hotboxed with yoga farts and peri-mentopausal lady sweat in there. Members shouldn’t have to carry their own ventilation systems into the club.

    Thanks heaps,

    West Seattle Member #whatever

    Comment by Irukandji — 8:46 pm March 10, 2013 #

  2. Replacing some of the funkier exercise mats, and washing some of the yoga mats would be a huge improvement.

    Comment by Amy Thomson — 8:58 pm March 10, 2013 #

  3. I’m reassured greatly by this interview. Sam Adams seems quite sincere and shows every sign of subscribing to high ethical standards.

    Comment by Bill — 8:58 pm March 10, 2013 #

  4. This all sounds much more promising. I hope Sam has the resources to make it so!!

    Comment by Kim — 9:10 pm March 10, 2013 #

  5. Wow! This sounds very promising. I sure hope it can become nicer, cleaner and so on. My trainer is awesome and because of working with her I have my fitness health back! Fitness is very important to me. (And all of us members) as well. Good luck Mr. Adams, were pulling for you.

    Comment by Floraista — 9:54 pm March 10, 2013 #

  6. And please, please take out the carpet in the locker rooms! I can’t imagine the level of mold in it due to people in there dripping wet from the pool, hot tub, steam room, showers, etc.

    Comment by m — 11:52 pm March 10, 2013 #

  7. Glad that you guys have requests rather than blushing over the prospective new owner, as somebody who trail runs rather than owning a membership, I am impressed with the tone. Strike while the iron is hot, cheers.

    Comment by CertainlyContent — 12:20 am March 11, 2013 #

  8. What some do not know, is this is the third All Star gym Sam Adams has take in over on Bob Padgett behalf. I say Sam is not keeping very good company.
    It’s look like Bob Padgett (as in All Star fitness) will not be paying back about 50 members, that payed him $5,000.00 to keep things going.
    You can call it Harts, All Star, or that’s right it maybe now going to be called West Seattle Athletic What a Joke. Members beware somethings don’t change. Part of the payment back to investors was $3,000.00 going towards membership going up to year of 2018. Not Lifetime Membership

    Comment by SAD — 3:22 am March 11, 2013 #

  9. Looking forward to finding out about “special classes”. AllStar already has the best classes around town. Would love to see more mind/body/spirit classes like qi gong, tai chi, etc. Several years ago their Queen Anne location had a Zen Movement class that was FANtastic. It cured my chronic back pain/neck pain and that’s what a “health”club is all about, right?

    Comment by kate — 4:32 am March 11, 2013 #

  10. Great article.

    Sam, my one request, can you open a little earlier on Saturday and Sunday? For many of us with families, it would be great to get a workout in early. Not opening until 8:00 cuts out a large part of the weekend day to get a workout in.

    Even 6:00 or 7:00AM would make a big difference. Thanks

    Comment by Stu — 5:57 am March 11, 2013 #

  11. I belonged to Allstar when it was a small chain of clubs downtown, one in Portland and one in Tacoma. When Executive Fitness bought out the downtown Allstar clubs no one at the West Seattle branch (the one I went to far more than any of the others) were told of the change until it happened. It was extremely messy; it was clear those who participated in the buy-out had no idea what to do with memberships at both clubs. Some friends of mine who were Allstar members were told they needed to buy new memberships in order to continue using the West Seattle club. Since I had extended my last membership at the West Seattle branch I was allowed to continue using the club, but had no assurance of how long my membership was going to remain valid. I saw the quality of the club plummet, with new people at the front desk almost every time I went there. Things were more and more shoddily run. One night I went to the club and was told my membership had expired. That was it – no admittance unless I coughed up money. I went straight from there to CostCo to buy a 2-year membership at 24 Hour Fitness. Goodbye Allstar. I won’t be coming back, no matter what your new name is.

    Comment by ELB — 6:56 am March 11, 2013 #

  12. WHO OWNS THE PROPERTY THAT ALLSTAR SITS ON???

    Comment by SS5 — 7:31 am March 11, 2013 #

  13. HP Prop-Allstar LLC, which checks in Washington corporation files to:
    .
    http://www.sos.wa.gov/corps/search_detail.aspx?ubi=602830192

    Comment by WSB — 7:37 am March 11, 2013 #

  14. SS5, according King County Parcel Viewer, the property owner is; H-P PROPERTIES/ALLSTAR LLC.

    http://info.kingcounty.gov/Assessor/eRealProperty/Detail.aspx?ParcelNbr=9358000300

    .

    Mike

    Comment by miws — 7:53 am March 11, 2013 #

  15. My wife loves that club, and reading this is encouraging.

    Comment by Mr.Fitness — 8:12 am March 11, 2013 #

  16. Bottom line question: I’ve had a membership thee for 13 years, is it still valid?

    Comment by sara — 8:26 am March 11, 2013 #

  17. You’re going to have to either ask or wait to see if they indeed start contacting members, assuming the sale is approved.

    Comment by WSB — 8:36 am March 11, 2013 #

  18. I doubt if the membership would care if you close 7-10 days to fix all the problems.
    Many clubs do so; and would be great to come back to a clean, working facility!!

    Comment by workout madness — 8:43 am March 11, 2013 #

  19. For those who loaned $5,000-

    Anyone want to join up and share costs on an attorney?

    The $5,000 Promissory Note (appears about 50 of us signed) really has very little to do with AllStar. It’s an agreement between you and BGP III, LLC. BGP III, LLC is a separate LLC registered in the State of Washington whose registration expired in January 2013.

    It’s a loan to Bob Padgett’s LLC, not an investment in the club. The Chapter 11 of Allstar is not related to these promissory notes, other than a commitment from Bob to give us a $3,000 credit at his club.

    Anyone else interested in pursuing?

    Comment by AJ — 8:44 am March 11, 2013 #

  20. Well this is certainly more encouraging than the letter we received this weekend. I hope that Sam Adams is watching the blog and listening to his customers. I hope he keeps his word on this, not only with honoring the memberships but also the much needed improvements that have been promised.

    Comment by kvk — 9:00 am March 11, 2013 #

  21. Allstar investors are indeed talking about joining together to hire an attorney. We have contacts for about 25 people so far. If you’re not yet connected to our group please email us at
    wsallstarinvestor@gmail.com

    Comment by WS All Star Investor — 10:00 am March 11, 2013 #

  22. Overall this sounds encouraging about the future of the club. Its classes and instructors are the best around. I too am hoping that members who purchased new or renewed membership in 2012 will have those honored. As for the bonus months, it would be great, but as a business I understand that is an unfunded liability. I would rather the money go to fixing the club and improving the housekeeping. Here’s hoping.

    Comment by BarbaraH — 11:57 am March 11, 2013 #

  23. My bar for an improved gym is very low-if all that happens is we get class teachers who are reliable and don’t constantly no-show, that will be the biggie for me.

    I used to regularly walk to All-Star, only to find that the class I wanted to attend was cancelled-no calendar update, often I would even call and verify the class was happening before i left the house and it would STILL be cancelled when I got there. The front desk had no idea what was going on.

    Other than that, I hope there are a lot of dance classes: Zumba, Nia, bellydancing, etc, and that they vet their teachers harder for quality and reliability.

    24 hour fitness has much more amazing classes with more reliable, professional staff, but obviously the facilities are really run down.

    I would love to have a closer gym, but great classes are the key: well qualified teachers who are not just in good shape, but actually good with people, who are on time, and who show up. That’s pretty much it!

    Comment by lolabelle — 12:12 pm March 11, 2013 #

  24. As a 7+year member who primarily laps swims in the pool, I appreciate Sam’s attention to correcting maintenance issues with the pool & dressing room areas. The condition of the pool over the years (lack of chlorine, ceiling paint chips in the pool, etc) has been borderline hazardous. Thank you for putting it on the fix-list!

    Comment by Lisa — 12:23 pm March 11, 2013 #

  25. Any chance of joining forces with Seattle Executive Fitness so us West Seattle folks working downtown have more options? I’d pay extra for the perk, but I’m definitely not going to maintain two gym memberships.

    Seattle Executive Fitness got my renewed membership in the divorce, but if it’s owned by a former business partner I can hope.

    Comment by SunnyBee — 12:59 pm March 11, 2013 #

  26. Just over a year ago my husband and I bought a house in West Seattle, and we were so excited to get a membership at All Star. It is just a five minute drive/twenty minute walk from our new house.

    Because All Star was offering a year and a half at a better price than a month-to-month at the time, we prepaid over $1200 for a dual membership, which expires on Aug.28 of this year.

    My husband is more of a gym rat than I am, but I really enjoy the ‘girls only’ workout room as well as the pool (especially in the summer).

    We are sincerely hoping that Mr. Adams is true to his word in intending to honor 99% of the existing long-term contracts.

    I know we did the math carefully when we decided to shell out so much money at one time for our contract, and I would like to note that (most probably like others who bought around the same time) we would have been much better off financially with a month-to-month if it does turn out that our contract is terminated early as a result of fiscal mis-management of the club.

    Mr. Adams, if you are reading, I am personally looking forward to swimming at your West Seattle Athletic Club this coming summer, as it will be the only form of exercise I will be able to manage while recuperating from an operation I have scheduled for this May.

    We know that, legally, you will probably not have to honor the legitimate long-term contracts made before late last summer, but we do consider it the right thing for you to do by us and others like us.

    It also seems like just good business in such a small community.

    With all this in mind, my husband and I are not going to respond in any way to the letters we received so that the proceedings can go as smoothly and cost-effectively as possible, which will hopefully result in a fully running club this summer or earlier.

    That said, our many thanks go out to the All Star employees we have worked with over this past year, and we hope that their employment remains as stable as possible.

    Best regards,

    M.J.

    Comment by MJ — 1:04 pm March 11, 2013 #

  27. P.S. To the members who tried to save the club in what sounds like good faith (if bad paperwork), I hope you take that guy to the mat.

    Comment by MJ — 1:12 pm March 11, 2013 #

  28. How about a set of kettlebells and more crossfit-type equipment?

    Comment by Peeb — 2:45 pm March 11, 2013 #

  29. B_10_Proof-of-Claim-12-2012-fillable.pdf
    This form is from US Bankruptcy Court
    West District of Washington
    Use this if you oppose the notice of hearings. motion 1 and 2 mail to Allstar members
    Judge Karen Overstreet

    Comment by SAD — 3:00 pm March 11, 2013 #

  30. The club offers a decent class schedule, so maintaining/expanding it would be key. Also hope new owner will make repairing the many, many (did I say many?) broken cario machines on the 3rd floor.

    Comment by Hopeful... — 3:13 pm March 11, 2013 #

  31. I have been a member for 10 years at ALLSTAR. I love the kids club because the sitters there are quality and wonderful with the children, so that you can actually get a work out in as a single mom. I love the fact that the kids club is spacious and educational. My biggest request is that kids club is open longer hours on the weekends so that we can take advantage of the afternoon classes. it currently is open 9 – 1 pm. I would even rather pay for the kids club so that it stays open longer, it currently is free. I don’t use the locker room because it is so wet and seems really germ ridden. I drive home first & change before going, because the locker room smells bad and seems really grungy. Also when you take yoga class the weight room is above you and people drop the weights so it is super loud with the crashing of the weights while you do yoga. I would like to see more YOGA classes offered. In addition, I am hoping the monthly fees don’t go up, I have had the same plan over the entire last decade and its very reasonable which keeps me coming back and not switching health clubs. We also love the climbing wall and that the main areas is family and kid friendly with the fruit smoothie bar etc. I am hoping they don’t begin charging for classes, because then it is not worth it. Thank you for listening!!

    Comment by SERA — 7:23 pm March 11, 2013 #

  32. Is anyone concerned about the monthly rate rising? If the current owner didn’t have enough money to keep the club from declaring bankruptcy and the new owner has lots of improvements in mind, it seems likely that the rates will increase. My husband and I go to classes twice a week which is already pretty expensive when you look at cost per class. If rates go up, it might not make sense for us to remain members.

    Perhaps Mr Adams will consider tiered membersip or buying a punchcard.

    Comment by Robin — 7:48 pm March 11, 2013 #

  33. I’m pleased to read this article. I left the YMCA for a membership at AllStar and have loved the instructors, classes and spaciousness (compared to the overcrowded Y). But, the place needs a deep cleaning, more towels and equipment upgrades. It’s been going steadily downhill in those areas since I joined in 2010. Welcome, Mr. Adams. I hope you buy this club. I’m willing to pay a little more to have a great exercise and social experience.

    Comment by Christine — 8:04 pm March 11, 2013 #

  34. Aj, I’ll join in on attorneys fees if there is enough interest. Rockthedeuce@gmail.com.

    Comment by Alex — 9:06 pm March 11, 2013 #

  35. Make sure that you treat Ed well- our best spin cycle instructor. He is the only reason that many of us belong to the club. I think the monthly rate is pretty reasonable as it is now, but obviously you need to compare it to other choices out there, like the YMCA, Cycle U, CrossFit, etc. Maybe there could be a tiered system- a gold card if you will which provides additional benefits or a special work out room, towel service, one free smoothie per month, etc. There is a reason that the place went out of business folks. And now if service and amenities are to increase (which everyone seems to support), revenue will have to increase to finance it!

    Comment by NR — 9:07 pm March 11, 2013 #

  36. I am hoping that all issues get fairly resolved. All Star has some fantastic trainers, I hope that they will be offered fair benefits to encourage them to stay.

    Comment by carol — 9:18 pm March 11, 2013 #

  37. I LOVE the kids club. It’s the reason I’m still a member of allstarfitness. The cair providers during the week are amazing! I have had my children there since they were infants and I would be devastated to see them go. I Would hope that the new ownership realizes how important good child care is to allstarfitness and all the parents who feel safe leaving there children in the kids club. I agree about the yoga studio, the weights need to be moved. It is like an earthquake when people drop the weights down onto the ceiling of the yoga class.

    Comment by Britney — 9:50 pm March 11, 2013 #

  38. Is there a reason why 2,100 members aren’t voicing their dismay over having their memberships canceled without a refund? Did you not read or understand the Bankruptcy Notice you received in the mail? Do you honestly believe that Sam’s “good intent” will override a ruling by the bankrupcty court that you are SOL?

    It would be nice to read comments about what you intend to do about getting screwed (ie, the topic of the WSB article), rather than a litany of suggestions or comments on club uncleanliness.

    Comment by Eileen — 10:34 am March 12, 2013 #

  39. I hope that 24hour fitness in Westwood Center follows the lead that Sam Adams has set in cleaning up and updating the equiptment. I am sure that many 24hr. members will gladley leave to avail themselfs of a better club.

    Comment by John McCloskey — 12:08 pm March 12, 2013 #

  40. I spoke with the administrative assistant for Yousef Arefi-Afshar today about the evident difference between the postions of the Trustee and Sam Adams regarding older prepaid contracts. She indicated the Trustee does want the court to grant him permission to reject those contracts and that whatever Sam Adams chooses to do about them subsequently is up to him. So it seems he would have to re-instate those contracts or something along those lines if he wishes to honor them. So in response to Eileen, I think it seems prudent to make a case to the court against granting the Trustee the right to reject the older prepaid contracts. BTW, I asked one of the All Star sales people if memberships sold after the August filing contained any cautionary information about that fact and he said there was not. So I see the Trustee’s position as somewhat arbitrary on honoring some contracts and not others. That’s apart from whether or not it was proper to sell multi-year contracts or offer lifetime membership in exchange for investments.

    Comment by JTB — 5:23 pm March 12, 2013 #

  41. We chose AllStar Fitness over the YMCA even though we could have free membership through the Y with Silver Sneakers. We have been with AllStar for over 12 years and have been happy with the facility. If however, the fees start to increase we will probably go over to the Y.

    Comment by Christine — 10:18 pm March 12, 2013 #

  42. Please keep all the wonderful yoga teachers! Agreed, carpets in the locker room have got to go. I’ve been a member since 2005, really hoping membership dues don’t increase and the new club is all that it has the potential to be.

    Comment by Liesha — 8:50 am March 13, 2013 #

  43. I have been a member of this club for almost 5 years and will continue to support it IF all the things mentioned go through. I am an avid indoor cyclist at All-Star and would really like to see the bikes maintained better. Rusty flywheels, torn seats and broken adjustment knobs are all issues with the bikes. The instructors are AWESOME – Ed and Stacy especially – and I would hate to lose them in my program. Let’s keep POSITIVE people!

    Comment by Mark G — 9:27 am March 13, 2013 #

  44. Let it be known that it was AT THE REQUEST of Mr. Adams that the “pre-petition” contracts (i.e., contracts signed before August 27th, 2012) be REJECTED as one of the conditions upon which he would agree to PURCHASE the club. For him to now say that he “intends to honor 99%” of those contract is pure public relations B.S., meant to placate you as you sit on your rights to contest a sale which will kick you out as a current member. If you are one of the 2,100 members (who constitute one-third of the club), you need to OBJECT to the proposed sale IN WRITING, by MARCH 20TH, and attend the hearing on the 22nd if you are able. If Mr. Adams wants to buy the club, he can buy it on terms that will HONOR YOUR CONTRACT and what you have already paid to All Star – -versus giving sheer public relations lip-service which directly contradicts the terms of the sale (i.e., rejecting your contracts) which HE MADE. If you can persuade the Judge to REJECT the proposed terms of the sale, even if that results in a temporary club closure, it CREATES the opportunity for a legitimate and honorable club buyer who will HONOR YOUR CONTRACT.

    Comment by Eileen — 1:46 pm March 13, 2013 #

  45. My husband & I were/ are charter members of All-star; having a membership when in was located at Alaska/Calif. in the Junction before the bldg. was completed. During, at least 12 years, I have had a personal trainer. My current contract has approximately 60 sessions remaining. I understand the financial aspects of Mr. Adams transactions so an increase in our monthly fees would be expected for a facility that is well maintained with workable equipment. But to see the unused portion of my trainer contact not be honored, considering the dollars lost, would be a tough one for us to reconcile. Considering the money we have spent over the years we may be one of those exceptions worth Mr. Adams consideration for the future.
    Finally you have a great group of people that work at All Star. I hope you recognize they are your most important asset as you go forward.

    Comment by Keith Clark/Reah DePriest — 2:54 pm March 13, 2013 #

  46. Sam-

    When you get new equipment can you consider getting a hack squat machine and a T-Bar Row?

    Bodybuilder

    Comment by Bodybuilder — 3:23 pm March 13, 2013 #

  47. I seriously hope Sam keeps the current TOP NOTCH INSTRUCTORS. I have been taking classes for 30 + years and the instructors are phenomenal at Allstar. Allyson’s Hardbody Classes are incredible and Allan’s classes too! They both have years of experience and surpass most instuctors elsewhere. Their classes are packed-out …proof of their exceptional quality of teaching .

    Comment by Diane — 8:43 pm March 13, 2013 #

  48. I am a former employee of allstar and I’m wondering why they were not reporting my wages to the IRS. Big no no. Very crooked operation. Hope the new owner wont be so sneaky. Allstar in trouble.

    Comment by wn — 9:53 pm March 13, 2013 #

  49. Reposting here. This is an excerpt from my letter to the judge and the attorneys for the Trustee:

    “My present contract, for which I have already paid both my dues and the yearly maintenance fee, is not set to expire until March 9, 2014. I understand that when it is once again up for renewal, assuming the Club is sold, those terms may not be offered to me again. My next renewal window would be the appropriate time to end or modify the terms of my membership. Therefore, I am opposed to any sale that would terminate legal membership agreements like mine.

    Mr. Sam Adams, who has been identified as the party interested in buying the club, has been quoted in the local media as stating he intends to honor “99 percent of them” in reference to the approximately 2100 contracts that include terms like mine. He has also been quoted as saying he “thinks” membership terms of two years or more are illegal.

    The terms being requested by the Trustee in the notice I received does nothing to allay my concern that a membership agreement of more than 12 months and equal or less than 24 months will be honored. Therefore, I ask that you require the Trustee to stipulate in greater detail exactly which agreements are to be nullified before you approve this sale.”

    Comment by Jenny — 1:51 pm March 14, 2013 #

  50. While is does suck some memberships will likely be voided due to the sale, I can understand why Sam would do this. He’s buying a business and the last time I checked, a business needs to make money. How’s he going to pay the rent and possibly ungrade with a large percentage of the membership still riding out their old contracts that he makes no money on? Sam did not sell us the memberships and he has no olbigation to honor them. No buyer in their right mind would agree to honor all of them. Sam would be doomed from the start if he did. I’m suprised he’s even trying to honor some of them. Complain all you want about it, any potential buyer would have done the same thing Sam is doing and probably less.

    So, instead of being angry at Sam, direct your anger at the former owner who created this whole mess. I’m just glad somebody had the balls to buy the club and keep it open. I can’t stand the Y and 24 hour is a mess as well. Be glad someone stepped in and saved the gym. If it closed, you would be out the money anyway.

    I applaud Sam for buying the gym and hopefully keeping in open for a long time to come. The Gym business is diffcult and high risk to say the least.

    And yes, T-Bar and Hack Squat systems would be a welcomed addition. Just sayin……

    Comment by Brewmeister — 3:29 pm March 14, 2013 #

  51. I 100 percent agree with Brewmaster.. Think of the entire situation before you get all wrapped up in angry. Sam Adams can not run a business or even put money into it if the majority people have like 5 year existing contracts. This mess is not his fault… It is what it is.. Big lesson- you should NEVER prepay for more than a year ito ANY gym- if they ask for more… Its a sign of desperation.. I actually learned that in a finance book and that is exactly what All Star did… Not Sam Adams.. So give him some slake.

    Comment by Bothsides — 7:49 pm March 14, 2013 #

  52. Brewmeister and Bothsides, remind me never to do business with you! From the way you so casually dismiss the money that would be lost from those who have longer-term contracts (we’re talking 1 to 3 years, not 5), it’s obvious you didn’t sign one. I bet you’d feel differently if you had.

    The fact is that honoring the contracts is not only the right thing to do but good business. Sam Adams, based on the interview, knows that. There’s a fallacy inherent to the argument that he’s losing cash flow by honoring them. If the contracts were canceled, I doubt a single one of the affected individuals would return to this gym. I sure wouldn’t.

    The choice for Adams is clear: Start his new business on a highly negative note or earn future customer loyalty and generate positive word of mouth. He’s making the right choice.

    Comment by Bill — 8:37 am March 15, 2013 #

  53. @ Bill

    Actually I do have a 1 year contract that I renewed back in September so I will be losing money if it’s voided. That sucks. No doubt about it and I’m angry with the former owner about it. However, Sam bought a business out of Bankruptcy that failed in every aspect due to what is starting to sound like a crook of a former owner. Sam had nothing to do with that. I understand your anger but I think it’s misdirected.

    Also, it’s not a fallacy that Sam would lose cash flow by honoring long term contracts. How would you like to buy a business and 1/2 your customers didn’t have to pay you for 1,2 or even 3 years? Good luck making it past your first 6 months. Memberships are how they make money, pure and simple. I’m also pretty certain that most people will still be angry an having contract voided, if that happens, but I’m guessing most will sign up again. What other “real” choices are there right now in West Seattle?

    The bottom line is you had a contract with the former owner, period. You did not sign a contract with Sam. Sam bought s failed bankrupt business and really has no obligation to honor the contracts. But it sounds like he will try and honor some while still giving himself a fighting chance at ensuring the club can remain a viable business. I can tell you NO owner that would have bought the gym would have honored all the contracts. It sucks but a fact of life and not Sam’s fault.

    On a side note, I remember getting the invitation from the West Seattle Fitness Owner about investing $5K. Within the first few seconds on reading the proposal, HUGE RED FLAGS WENT OFF IN MY HEAD and no more than 5 minutes of doing some simple Google searches made it clear this was a very high risk and bad investment. I feel sorry for those who were dupped but they either went in knowing how high risk it was or simply did not truly research the investment. I hope all these people can get at the prior owner and get some money back. However, I highly doubt that will happen.

    I understand all the anger in general about the situation. Hell, I’m angry. But, I’m just glad the club did not shut it’s doors and Sam stepped in and saved it. It’s probably time for some people to cut their loses financially and emotionally about the preivous club and it’s owner and give the new owner Sam a chance. Or, just keep beating your head against a wall that will not give.

    Comment by Brewmeister — 10:37 am March 15, 2013 #

  54. I second your position, Bill.
    Brewmeister, if you re-signed in September you have nothing to lose, so you really have no standing to speak; you’re wholly unaffected. The terms of this sale were negotiated by Sam himself with the Trustee, so saying “don’t blame poor Sam” is a fallacy. It’s a shrewd business deal to cut off a full one-third of the current membership (and liabilities)– and that means one-year (or more) contracts that were paid before August 27th, 2013. This buy-out is NOT limited to cutting off the rights of $5k investors. It’s a sweet deal to get a club for $75k and wipe out long-term liabilities and get in new revenue through new members and/or “inviting” the terminated ones back “for a small fee”. I’m sure Sam knows exactly how much more money he plans on extracting cancelled members for “reinstating” them.
    WSB, if would be nice if you would provide a link to SCHEDULE B, doc 95-2, filed 3/5/13, the Schindler’s List of all of us who will have our memberships terminated as of Friday, March 22nd, 2013, should the Court grant the Order to sell the club to Sam. That way the cancelled members would know WHO THEY ARE so they can timely voice their objections to a sale on these arbitrary terms, if they so desire.

    Comment by Eileen — 4:13 pm March 15, 2013 #

  55. Hi – while those documents are publicly available online – they are not available only to media, lawyers, etc. – we do not as general policy buy and link documents that have private citizens’ names and addresses. I am not a lawyer and this is not legal advice, but I would find it difficult to understand why anyone who received that notice would not take advantage of the invitation to send an letter to the court, as I believe was included in those documents that thousands of members received last weekend, sparking this round of reportage. And also I would hope that everyone who was concerned would have inquired at the club in this past week – they supposedly had been making documents and letters available at the front desk. I am continuing to check the online files daily for any new documents but that’s no substitution for everyone doing what they can to protect their own interests – TR

    Comment by WSB — 5:29 pm March 15, 2013 #

  56. Does anyone know if there is a fee to oppose the sale?

    Comment by MK — 11:53 am March 17, 2013 #

  57. No – anyone can send a letter to the court. I am writing a story later today, in fact, about what’s in the file so far- a handful of letters about the proposed termination of memberships, and one opposing the motion to stop requiring mass notifications of future actions in the case – TR

    Comment by WSB — 12:25 pm March 17, 2013 #

  58. Thank-you for your response, WSB-

    I am a gym member (at least for five more days)and I can tell you that “the front desk” is not “making documents and letters” available at the front desk. If anything, they are rubber-stamping the PR stint by Mr. Adams posted in this blog and his “intent to honor 99%” of the contracts he himself has put on the chopping block. If you wonder why there has not been more of a negative response to the proposed termination of 2,100 memberships, based on numerous conversations with fellow club members, it is largely due to: (1) members not knowing THEIR memberships are being cancelled this Friday; and/or (2) reliance on the self-serving “goodness” espoused by Sam Adams in this very blog, resulting in members sleeping on their rights. (Incidentally, the referenced Exhibit B which lists the 2,100 terminated members does NOT include their addresses.)

    Comment by Eileen — 7:51 am March 18, 2013 #

  59. Geez! Sam Adams is getting a ton of bad press for a handful of memberships affected. If I was him, I would have honored them as a gift to the community. Especially if I want to show that I am working to build a community. Sending membership cancelation notices to 2100 members is a million times more damaging than honoring a small amount of life time memberships. I take classes there and most people are talking of leaving the club because they don’t trust him to honor his word. Bad business decision, dude.

    Comment by AEL — 9:55 am March 18, 2013 #

  60. The Allstar rumor mill is driving me nuts. I hope Sam Adams will communicate directly with Allstar members as soon as possible. We need straight factual communication. One trainer told me the club is turning over on the 25th. Other trainers don’t even know about that. If it is, what will the turnover entail?

    My membership expired a few days ago. I hesitate to go even month to month when I have no idea which company will get my initial first month payment and whether it will be honored by Sam Adams. (I paid for a whole year in advance last year.)

    Comment by Christine — 10:03 am March 18, 2013 #

  61. I already know what Mr. Adams is saying is a load of crap. My husband and my name is on the cancellation list and we didn’t get lifetime membership or any special sweetheart deals from Bob neither did we invest any money in the gym. We didn’t even know who Bob is until this whole fiasco. Our membership was up for renewal and we renewed it with whatever offer was going on at the time. Also he will be “honoring 99% of the contracts”?? Really I doubt 2100 contracts is 1% of the total # of clients coming there. At this point we just want our money back and there are plenty of other gyms who will gladly take our money. Also we will never go back.

    Comment by KEM — 10:10 am March 20, 2013 #

  62. Hi,

    I was trying to respond to someone else, but I wanted to address KEM. Now that you have found out that Sam did just what he said he would do, please let me know if you have any other questions. I understand this was a difficult process, but I hope members know they are welcome and can reach out to us with questions at any time. We’ll see you at the club!

    Ramon

    Comment by Ramon — 6:08 pm March 29, 2013 #

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