West Seattle Blog... » Allstar Fitness bankruptcy http://westseattleblog.com West Seattle news, 24/7 Sun, 26 Oct 2014 04:25:12 +0000 en-US hourly 1 http://wordpress.org/?v=3.4.2 Eviction hearing next month for West Seattle Athletic Club, which also has filed a separate lawsuit of its own http://westseattleblog.com/2014/01/eviction-hearing-next-month-for-west-seattle-athletic-club-which-also-has-filed-a-separate-lawsuit-of-its-own/ http://westseattleblog.com/2014/01/eviction-hearing-next-month-for-west-seattle-athletic-club-which-also-has-filed-a-separate-lawsuit-of-its-own/#comments Sat, 25 Jan 2014 00:06:48 +0000 WSB http://westseattleblog.com/?p=262752

By Tracy Record
West Seattle Blog editor

Routine checks of court files have turned up two new legal actions involving the West Seattle Athletic Club (which took over the former Allstar Fitness location in North Delridge last year) – one in which it’s the defendant, another in which it’s the plaintiff.

First: The club’s landlord H-P Properties has filed an “unlawful detainer” complaint, and what court documents describe as an “eviction hearing” is set for February 11th.

As explained here, this means basically refusal of an order to vacate. According to the court documents, the landlord is owed $386,000 in “back rent and other charges,” including this month; the documents include the lease, which says that after two rent-less months last spring, owner Sam Adams is supposed to be paying $100,000 rent per month right now. The complaint, filed a week and a half ago, includes a copy of a three-day “pay or vacate” notice that was originally dated December 20th.

The complaint is not only against Adams, his company Hollystone Holdings, and the West Seattle Athletic Club, but also names a company called Barratt Leasing. That company, in turn, is being sued by Adams, according to a separate action filed this month, which names Adams as a plaintiff as well as six athletic clubs, including the one in West Seattle. They are suing Barratt Leasing and Allstate Financial Group for breach of contract, accounting, and rescission.

The court documents say Allstate Financial “offers billing services to owners of athletic clubs” and that it was under contract with these clubs, but alleges that Allstate:

“… has failed to make timely and accurate periodic payments to Plaintiffs. On numerous occasions the periodic payments from Allstate Financial to Plaintiffs were late, less than called for under the terms of the agreements between the parties, not wire transferred, made on out-of-state checks that would not clear for several days, or drawn on accounts with insufficient funds. Many Allstate Financial checks to Plaintiffs would be cancelled by Allstate Financial after being deposited by Plaintiffs, which in turn would cause Plaintiffs’ checks to landlords, vendors, and employees to bounce. As a direct and proximate cause of Allstate Financial’s failure to make timely and accurate periodic payments, Plaintiffs were unable to pay required lease, payroll, insurance and utility expenses.

Other allegations made by Adams and his clubs are that Allstate “convinced (them) to enter into subleases for the inclusion of wellness clinics in four clubs” but has not been paying rent for those spaces and currently owes more than $120,000.

As for Barratt, which “is affiliated with and operates in connection with” Allstate, here’s another excerpt from the documents in the lawsuit filed by Adams’ company:

Barratt Leasing finances the purchase of athletic clubs, taking security in the assets of the athletic club, including athletic equipment owned by the clubs. Plaintiffs entered into Lease Agreements with Barratt Leasing to finance the purchase of the clubs.

Barratt Leasing has breached these Lease Agreements, acting in concert with the improper actions and breaches of Allstate Financial. For example, Allstate Financial, Barratt Leasing and Plaintiffs entered into two Memorandum of Agreements in December 2013 which were intended to resolve many of the legal disputes and issues between the parties. Allstate Financial and Barratt Leasing have failed to perform and have materially breached these Agreements. For example, under the first Memorandum of Agreement, Allstate Financial has failed to “continue to provide advances on collected member dues” to assist meeting the obligations of West Seattle Athletic Club and Bethany Village Athletic Club. Rather than advancing these payments, Allstate Financial has taken control of the Bethany Village Athletic Club away from Plaintiffs. Under the second Memorandum of Agreement, Allstate Financial and Barratt Financial have either wholly failed to perform, partially performed, or not performed in a timely manner, the obligations set forth in paragraphs 5.1 through 5.6 of that Agreement.

As a direct and proximate result of these breaches by Allstate Financial and Barratt Leasing, Plaintiffs have suffered several hundreds of thousands of dollars in damages including but not limited to lost membership fees and dues, lost profits, loss of value of the businesses, late fees, damage to business reputation, attorneys’ fees, and other costs.

Unlike the “unlawful detainer” case mentioned atop this story, this is a regular lawsuit and currently does not have a court date set until next year.

Last fall, as noted in this WSB report from November, there were numerous concerns voiced by members, who alleged deteriorating conditions, and some employees who said their checks had bounced, but the ownership posted a message promising improvements.

Less than a month ago, the Tacoma News-Tribune reported that Adams’ company had been evicted from its Lincoln Plaza Athletic Club near Tacoma Mall.

Last time we tried to contact owner Adams for comment about the West Seattle club, he asked that we do so by phone rather than e-mail; so we called his personal number this afternoon to seek comment, but reached only a message saying the mailbox is full, so we’re trying e-mail too, and will add any comment that we receive. (Added: He did call about 20 minutes after we published this, but did not wish to comment.)

Adams took over the former Allstar Fitness in West Seattle in March of last year, after its former owner’s bankruptcy case led to the sale of its assets for $75,000. (Our coverage of the bankruptcy case and what has followed is archived here.)

We are continuing to review the online court files for these cases and will add an update later with anything else we find that might be of note.

ADDED 5:51 PM: Per a request in comments for including documents from the case – for starters, here’s the document setting the February 11th “eviction hearing.” Here is the related “order to show cause.” And finally, the unlawful-detainer complaint.

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Ex-Allstar Fitness bankruptcy: Newly mailed notices NOT related to current ownership http://westseattleblog.com/2013/11/ex-allstar-fitness-bankruptcy-newly-mailed-notices-not-related-to-current-ownership/ http://westseattleblog.com/2013/11/ex-allstar-fitness-bankruptcy-newly-mailed-notices-not-related-to-current-ownership/#comments Sat, 30 Nov 2013 03:52:47 +0000 WSB http://westseattleblog.com/?p=257545 By Tracy Record
West Seattle Blog editor

Some confusion tonight regarding notices sent to past/present members of the former Allstar Fitness club at 2629 SW Andover in North Delridge.

We’ve heard from three people so far who received the notices in postal mail today and assumed they have something to do with current concerns at what has since last March been West Seattle Athletic Club.

The new notices do NOT have anything to do with current ownership.

They are part of the pre-existing bankruptcy proceedings for West Seattle Fitness, the official name of the ownership from the club was Allstar Fitness. You might recall that back before the club was sold to its current ownership, the previous ownership had been going through bankruptcy proceedings (here’s our coverage archive, newest to oldest) and there was some discussion of when members should get notices regarding those proceedings. According to images of the court documents in the new notices, they relate to a hearing December 20th on setting the amounts to be paid to people involved with those bankruptcy proceedings, including the trustee who for a time oversaw the former Allstar Fitness, and lawyers. The notices invite recipients to respond, and note that if no responses are received, the motions might be granted without a hearing.

We just checked the online file for that pre-existing bankruptcy case involving the prior owners, and that appears to be all that is going on (although we urge you to review anything you receive for you reading any legal-type notices you receive.

Separately, after a flurry of e-mails from members in recent days, we have been checking on the situation with the club under current ownership.

Members who e-mailed WSB have made multiple mentions of concerns, from instructors leaving amid claims of bouncing checks, to missing amenities such as towel-service interruption and soapless showers, to a lack of water service at the club for at least part of two days, most recently November 20th. One member who exhaustively detailed what she did and was told upon discovery of that problem that day says a staffer claimed it had something to do with locker-room repairs.

We have been continuing to check court records, watching for any evidence of filings involving the club’s current ownership; we found September and October warrants for unpaid state taxes, with no indication of whether the situations had been remedied. We took questions about that and the other aforementioned problems directly to the club’s current owner, Sam Adams, who answered promptly, but only to tell us that he would not comment on anything we asked about. (We have since filed a public-disclosure request with the city to find out more about the water-service interruption, as Seattle Public Utilities said otherwise it cannot comment on specific customers’ situations.)

Following what was described by multiple sources as an emergency meeting between club ownership and some club personnel/instructors last week, members told us a notice went up promising improvements, and one member has since sent us an image of the notice:

Adams’ company has been dealing with problems in two other areas where it operates – Tacoma (the News-Tribune reported last week that some employees there say their checks have bounced). Earlier this month, The Oregonian reported that one of the company’s clubs in Portland had been evicted.

But again, the notices some have received in postal mail today are related to the longrunning bankruptcy proceedings involving the prior owners, under the business name West Seattle Fitness – not the current ownership, known as West Seattle Athletic Club/Oregon Athletic Clubs.

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Ex-Allstar Fitness, now West Seattle Athletic Club: Update from new ownership, including memberships’ status http://westseattleblog.com/2013/03/ex-allstar-fitness-now-west-seattle-athletic-club-update-from-new-ownership-including-memberships-status/ http://westseattleblog.com/2013/03/ex-allstar-fitness-now-west-seattle-athletic-club-update-from-new-ownership-including-memberships-status/#comments Wed, 27 Mar 2013 19:29:44 +0000 WSB http://westseattleblog.com/?p=146204

For the first time since the Friday hearing at which a federal bankruptcy judge approved the sale of the former Allstar Fitness, we’ve heard from its new ownership. Sam Adams‘ company Oregon Athletic Clubs is renaming the club West Seattle Athletic Club, as we had reported after speaking with him March 10th, and we now know that company’s president is a former West Seattleite named Don Pak. He has just sent us this notice – which he says will be e-mailed to members as well as posted at the club – with information including the latest on what they are doing about prepaid memberships:

It is with great pleasure that we announce the following:

West Seattle Athletic Club has acquired Allstar Fitness and we are honored to serve the West Seattle community. West Seattle Athletic club (formerly All-Star Fitness) is the newest addition to the Oregon Athletic Club Family, the fastest growing chain of premier destination health clubs in the Pacific Northwest.

What does this all mean to you as a former All Star member?

There will not be any interruptions with your current monthly membership or changes to your monthly rates! This means you can carry on using this great facility as you have always done while also taking advantage of the new upgrades to equipment and services that we have planned.

What do we have planned for your club?

In the near future we will be replacing equipment, increasing services, and refreshing/updating the building. As a part of our new Group exercise (GX) programs, we will be adding classes from the world renowned Les Mills programs! We’re not just focusing on the adults either. At the new OAC, we want to continue and expand our youth programs to provide more options for the entire family! We will be adding amenities to the kids club such as well. The new OAC will be implementing the kidcheck software program to help ensure a safe and easy check in process. Take a look… http://www.kidcheck.com. Our goal is to provide an outstanding member experience to all of our members.

What about pre-paid memberships?

Great News, as promised, The West Seattle Athletic Club will be honoring all prepaid membership that expires on or before December 31st 2014.

If you have a membership that expires after December 31st 2014, please contact us at memberservicesWSAC@oaclubs.com. If we do not hear from you, a representative will be in contact with you to discuss your membership on an individual basis.

What happens next?

To use your new West Seattle Athletic Club membership just come into the club, update your billing and contact information, and enjoy your local neighborhood club. You will be issued a new membership card and hopefully meet some of the new staff members that will be here to help you reach your fitness goals.

We are thrilled to personally welcome you to the new West Seattle Athletic Club and are excited to provide you with a world-class experience. If you have any questions regarding the transition, please contact your club general manager Ramon Vasquez. He is at the club or can be reached at ramon@oaclubs.com. We would like to thank you for being a member.

Yours in Health,
The Oregon Athletic Club team!

This is the latest chapter in what began when the former owners’ company West Seattle Fitness filed Chapter 10 bankruptcy, quietly, last August. After tips from members, we first reported on the situation in November. The club was put up for sale in February, and the sale was approved by U.S. District Court Judge Karen Overstreet last Friday (see the signed court document here). WSB ongoing coverage dating back to November is archived here (reverse chronological order).

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Allstar Fitness bankruptcy: What’s posted at the club http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-whats-posted-at-the-club/ http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-whats-posted-at-the-club/#comments Sun, 24 Mar 2013 02:51:00 +0000 WSB http://westseattleblog.com/?p=145872

(Click image for larger view)
As noted in our Friday coverage of the hearing in which U.S. District Court Judge Karen Overstreet approved the sale of West Seattle’s Allstar Fitness, the court-appointed trustee promised a notice would go up at the club ASAP with an update for members. Above is a photo of the resulting notice signed by trustee Richard Hooper, taken by a member and shared with us via e-mail. If for some reason you can’t read even the larger size of the photo, here is a key passage regarding the status of memberships:

If you are a member who signed and paid for a long-term, prepaid membership contract or prepaid personal training contract dated on or after August 27, 2012, that contract will be honored under its terms by the Buyer.

If you are a member who signed and paid for a long-term, prepaid membership contract or prepaid personal training contract dated before August 27, 2012, your contract will be rejected and terminated as of today. However, the Buyer is in the process of reviewing these contracts and is willing to discuss your continued membership with you. Please bring copies of your signed contract to the club for these discussions. You may have a claim in the bankruptcy proceeding and will receive notice of any deadlines related to the filing of claims.

If you are a member who signed and prepaid for a long-term, prepaid c membership contract dated before August 27, 2012, but the contract renewal date was not until after August 27, 2012, your contract will be rejected and terminated as of today. However, the Buyer is in the process of reviewing these contracts and is willing to discuss your continued membership with you. Please bring copies of your signed contract to the club for these discussions. You may have a claim in the bankruptcy proceeding and will receive notice of any deadlines related to the filing of same.

… West Seattle Athletic Club LLC has asked me to inform you that you are welcome to use the club, regardless of your status above until all of the contracts have been reviewed and it has had an opportunity to meet with you and discuss your individual situations.

West Seattle Athletic Club is what new owner Sam Adams told us, in a March 10th telephone interview, he would rename the club. He also spoke with WSB this past Thursday, and our report on that conversation is toward the end of this story. All of our coverage, dating back to our first report on the bankruptcy last fall, is archived here, in reverse chronological order.

SUNDAY MORNING NOTE: We received multiple messages this morning from people who said the club did not open at its usual 8 am Sunday time and that they waited for quite a while and finally left. We were about to start investigating this when commenter Kate posted just after 9 am that she called and the club IS open now. (Please let us know if at any point later in the day you find otherwise – we always welcome news tips by text or voice, regarding any West Seattle/White Center/South Park news, at 206-293-6302, 24/7, the fastest way to reach us.)

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Allstar Fitness bankruptcy hearing: Judge will approve sale, ask for Padgett investigation http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-hearing-judge-will-approve-sale/ http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-hearing-judge-will-approve-sale/#comments Fri, 22 Mar 2013 17:57:12 +0000 WSB http://westseattleblog.com/?p=145752 10:57 AM: We’re in the courtroom of federal bankruptcy judge Karen Overstreet downtown, where she has just announced she will approve the sale of West Seattle’s Allstar Fitness to Sam Adams – after a long and rambling hearing – in which she also said she will ask the US Attorney’s Office to investigate current club owner Bob Padgett for not notifying members of bankruptcy when filed last August, among other things. We’ve been tweeting live; details to come here.

11:19 AM: The hearing has ended. The judge expressed ongoing concern for members getting notice, from hereon out, about their rights, including those whose contracts don’t wind up being assumed by the new ownership, and their rights to file a claim in the Chapter 11 case. She asked the bankruptcy trustee to look into a way to point members to a court website where they could read documents and notices. Trustee Richard Hooper also promised the judge that he will be posting a notice at the club this afternoon to notify members of the sale. We will expand this coverage with play-by-play from the hearing as soon as we’re back at HQ.

ADDED 6:21 PM: The rest of today’s story – through the end of the court hearing, anyway (we’re interested in hearing from anyone who might have seen the new owner at the club today, and/or the promised notice to members – your comments and/or e-mail are appreciated):

Key players, on and facing the bench on the 7th floor of the federal courthouse downtown:

U.S. District Court Judge Karen Overstreet

Representing the court-appointed trustee, Yousef Arefi-Afshar
Representing the would-be buyer (she said she had “just been retained”)
Representing the club’s landlord

Trustee Richard Hooper

Those in the gallery, as mentioned from the bench, and/or as seen on the witness stand, included:
More than half a dozen people who raised their hands to identify themselves as club members
Sam Adams (mentioned as being there somewhere – though we didn’t see him)

*Note that cameras are not allowed in federal courtrooms; otherwise we would have shot video or at least photos.*

First item of discussion: Errors in documents, particularly the August 2013 date listed as the cutoff for certain contracts being honored – “We don’t believe anyone’s due process has been violated,” says the trustee’s lawyer – and the apparent errors in listing who was supposed to be on the “rejected contracts” list. The lawyer says “lemonade” resulted because it led them to realize the debtor’s records (debtor refers to Allstar ownership) “contained further errors.”

Judge Overstreet got the lawyer to acknowledge that the “rejected contracts” list would be vetted ultimately by date, not necessarily by names on what is now acknowledged to be a list contianing errors.

One hangup, though: The debtor reportedly solicited renewals before filing for Chapter 11, even though the contracts didn’t expire until afterward. One person on this list is in the courtroom. Those are on the rejected contract list, even though they wouldn’t have been if they had waited to pay until the actual expiration date.

Once that was all somewhat straightened out, it came to the matter of the terms of the sale, and the judge being convinced whether to approve it or not.

This is where dollar-sign specifics started coming in.

The landlord’s lawyer said his client was owed about half a million dollars by current club ownership – including three months without rent being paid, at $135,000 a month. The lawyer reiterated their interest in a “viable tenant.” To a suggestion that the sale would benefit no one but the landlord, he countered that the remaining members would benefit by “having a facility they can go to, with the buyer upgrading it … I presume the membership lives in West Seattle – there’s apparently a major fitness club going in, but it’s going to be a while.” (That was presumably a reference to LA Fitness, the health-club chain that will be the anchor tenant for Spruce, the development set for “The Hole,” expected to start construction sometime soon – its developer hasn’t answered our recent queries.)

Judge Overstreet, who presided snappily throughout with occasional wit, said, “And the alternative is, I say no, and we close the club.”

That was reiterated throughout – this deal may not be great for all the current members, but, the contention was, it beat closing the club and leaving all members with nowhere to go. Also reiterated by the judge – she had asked Allstar owner Bob Padgett at the time of the filing last summer to “give notice to all members of this club that bankruptcy had been filed – he did not.”

(The case was filed on August 27th. We didn’t learn about it until October, at which time we published this story, quoting club management as saying a letter would be sent to members.)

The lack of notice was cited as a reason why GRE 509 Olive LLC, a downtown interest with some involvement with both the debtor and Adams, in separate transactions, weighed in at the last minute before the hearing on the prospective sale. Their lawyer said that some issues mattered more to them than others, but overall, “I don’t want it said in two months that we hid in the weeds and didn’t say anything.” The trustee’s lawyer Arefi-Afshar said he considered that company’s claims a “red herring.” At that point, the 509 Olive also brought up another issue from their filing, whether Adams can live up to his promises regarding renovating and operating the West Seattle club.

“He’s here and he can testify,” offered the trustee’s side.

The judge did not take them up on that offer. She did grill Hooper on how the $75,000 purchase price for club assets “squares with the valuation.” Hooper said it was the best they could do, and that they needed to do something fast – “we barely have the cash to keep the doors open and pay the salaries.”

That’s when several members took the opportunity to testify. The first took issue with Arefi-Afshar’s characterization of the erroneous list/date turning “lemons into lemonade” – in her view, the notice and its errors “cut off further interest” for too many people who didn’t “believe their rights are affected.”

“But more (contracts) will be honored” than originally believed, the judge countered, subsequently saying again that she is not pleased outgoing owner Padgett didn’t notify members, describing herself even as being in “a snit.”

The testifying member said she had belonged to the club since the start and thinks it’s undervalued with a $75,000 sale price, suggesting there were members who might have offered at least that much, but hadn’t heard about a search for a buyer. She quoted Adams’s March 10th WSB interview in which he said he expected to honor 99 percent of even the contracts listed as “rejected” in the court documents, and she thought the documents should be revised to explicitly say that.

The next member to speak was one of the “investors” from whom the debtor had allegedly solicited “investments,” with part of the sum ostensibly to go toward lifetime/long-term memberships. His contract, he said, is supposed to go through September 2018, and he considers it “disgraceful” that he didn’t get much notice. “I want him to honor the people who have supported the club.”

The next person to speak also described herself as upset about the lack of notice: “If I knew they were in bankruptcy, I would never have signed a long-term contract.” She said she hadn’t heard about it until late February. She thought a folder of documents about the case at the club’s front desk would have been helpful. Would an accurate list of affected members be available? she wondered. Trustee Hooper said “the accuracy of the records at the club is questionable,” and noted that the 7,000-plus people described as members are actually “everybody on the register of the club,” including some “inactive.”

He next had to answer some pointed questions about how the search for a buyer was conducted and how he wound up with this proposal. Six people toured the facility, four dealing directly with the landlord, Hooper said, and Adams’ offer was best. But time was short, he said, and they did not “advertise.”

Subsequently explaining the “investor” members whose contracts would not be honored, Hooper went into a quick summary of how, he said, owner Bob Padgett – “I’ve got my eye on Mr. Padgett,” the judge interjected at that point – had requested $5,000 investments that supposedly would include $3,000 in membership credits. But those, Hooper contended, were deals that were made directly with Padgett, not with West Seattle Fitness, the entity that is now going through Chapter 11.

Adams’ lawyer said he needed time to look at the pre-existing contracts “so he can’t really speak to what the obligations are,” but he will make it “a priority. … He’s a businessman, he needs to have dues coming in,” she said, “he can’t afford to alienate 2,100 people.”

Observed the judge, “They seem a little alienated at this point already.”

The 503 Olive lawyer asked whether the landlord had rejected other potentially qualified buyers. The landlord’s lawyer, accusing the other lawyer of coming into the case “at the midnight hour,” suggested the “members don’t appreciate this because they don’t know – the landlord is owed $2.5 million .. until the trustee was appointed, he hadn’t been paid since October, and still has seen nothing for January through March … what the landlord is trying to do is get a viable tenant that pays a fair-market value. What Adams is going to pay is less than what the original lease called for – with two months of free rent to get up and running. If this doesn’t go through, the place goes dark, and we get the place back in two months in bad condition. Mr. Adams is committed to renovating the facility, and that’s important to the West Seattle area as well.”

At that point, Judge Overstreet had heard enough: “I’ll be approving the sale, and here’s why.” Before going too deeply into “why,” though, she said, “I have heard enough already about activities by Mr. Padgett that I will personally prepare a letter and ask the US Attorney’s Office to investigate what has been done … When we have a (Chapter 11 filing) we expect the (filers) to honor commitments” (to what they are supposed to do to make notifications, etc.).

“What concerns me the most is that the membership has the opportunity to continue to go to a club in their neighborhood.”

She warned Adams directly, “You have heard what people (testifying) had to say – they are not happy. I can’t order you to honor (pre-existing) contracts. … I think the trustee has provided sufficient evidence that this is in the best interest of the estate.”

This is nowhere near the end of the Chapter 11 case itself, but regarding the club, it was time to move on, and the remainder of the discussion had to do mostly with paperwork and timelines. First the judge said she would sign the order of sale Monday; the trustee said the bill of sale was prepared and ready to go, so then she said that if it got to her in time, she could sign it today.

(Here’s the order as entered into the online record at 3:30 pm today – not described as having been signed by the judge yet, though.)

Adams would be going to the club today “to talk to the staff,” the judge was told, and then a discussion ensued about improving communication to members – even if it meant getting relevant documents onto the court’s website and directing members there. There was a promise in the short run that a notice to members would be posted at the club this afternoon.

One last loose end was tied up – instead of the April 5th hearing on a motion to limit the need for sending future notices to all members, each motion that comes to the court can be discussed individually regarding what kind of notice is appropriate.

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Allstar Fitness bankruptcy: Hearing tomorrow; new court filings – and a warning http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-hearing-tomorrow-new-court-filings-and-a-warning/ http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-hearing-tomorrow-new-court-filings-and-a-warning/#comments Thu, 21 Mar 2013 21:27:05 +0000 WSB http://westseattleblog.com/?p=145653 (UPDATED THURSDAY EVENING with new comments from prospective club buyer Sam Adams, and another “response” document – both updates added at end of story)
By Tracy Record
West Seattle Blog editor

Continuing our coverage of Allstar Fitness‘s Chapter 11 bankruptcy case, there are new developments as the proposed sale of the club’s assets goes before a federal judge downtown tomorrow morning:

More than 50 responses and/or objections to the sale motion have been filed, according to our most recent check of the online docket. We haven’t read all of them yet; most appear to be from individuals, with one exception: GRE 509 Olive LLC.

Its objection involves both the sale and the purchase. You can read it in its entirety here; while we’ve been working on this story, a response has been filed as well – a response saying that if the sale is not approved, the bankruptcy will go to Chapter 7 and the club will close, and had already been on the brink of closing in January.

First, excerpts from the objection:

GRE is scheduled as a secured creditor of West Seattle Fitness, LLC (the “Debtor”) as being owed approximately $2.5 million. As the Trustee acknowledges in the Motion, GRE filed a UCC financing statement in November 2009, which covers virtually all assets of the Debtor. …

West Seattle Fitness, it should be noted, is the official corporate name for Allstar’s current ownership, which has declared Chapter 11 bankruptcy. GRE 509 Olive LLC goes on to list three points of objection, excerpted:

1. The Sale Generates No Value to the Estate. The Trustee proposes to sell all of the fitness equipment, fixtures, furniture, inventory and certain intangible personal property that includes customer lists for a mere $75,000. GRE has a security interest in all of these assets. Unless the Trustee can avoid GRE’s lien or obtain a section 506(c) surcharge, none of the proceeds will go to the estate. …

2. No Evidence the Buyer Can Perform. According to the Motion, an important aspect of the proposed sale is the Buyer’s assumption of month-to-month memberships in good standing and all post-petition prepaid Club memberships (the “Assigned Contracts”). But no information about this Buyer is presented, and there is no evidence that the Buyer will be able to successfully operate and perform in the future. The Court should be aware that the principal of the Buyer is subject to a non-compete agreement with GRE, and it appears that his acquisition and operation of the Club will violate that agreement.

This appears to refer to a clause of a lease for the former Allstar Fitness space into which Sam Adams and a former business partner moved another club two years ago; they are listed as “guarantors” of an agreement that includes a clause saying that guarantors (among others) cannot have any kind of financial or ownership in a club in the state of Washington until.

Point #3 notes that Adams must sign a lease with the Allstar site’s landlord in order to operate the club, and says nothing has been presented to say he has or will. When we spoke with Adams, he said the lease would not be a problem, but didn’t offer specifics.

Since we started working on this story, a response to that motion has been filed – by the landlord; read it in its entirety here. The Allstar property owner’s response contends that GRE 509 Olive LLC did not file a claim in time; even if they did, the claim is “undersecured,” the response contends, saying, “Indeed, the Court was on the verge of converting this Chapter 11 proceeding to a Chapter 7 proceeding and having the club go dark in January 2013. … If this sale is not approved, then the Court will be compelled to convert to a Chapter 7, the Landlord will take the premises back (the Debtor has already rejected the lease and is only operating on a month-to-month term), and the Estate will lose everything.”

The response also says the Allstar property owner believes that Sam Adams considers the non-compete clause unenforceable. It also makes statements about the memberships that are at issue. And it repeats the warning that rejection of the sale to Adams will lead to Chapter 7 and club shutdown. The document is not allowing cut-and-paste so far, so while we work on transcribing those passages, here again is the link at which you can read the document for yourself.

Next step in all this is up to Judge Karen Overstreet, in whose federal courtroom the sale motion will be heard tomorrow morning at 9:30 am.

P.S. We have just tagged all our Allstar Chapter 11 stories so you can browse past coverage – reverse chronological order, here (or click the “Allstar Fitness bankruptcy” link under the headline of this or any of those stories).

ADDED 9:13 PM: As noted in comments, though we did not have a new message out to him, Sam Adams called WSB researcher/reporter Katie Meyer this evening (she had left messages for him while we were trying multiple ways to reach him for comment after he emerged as the prospective purchaser, but not since March 10th, when he called your editor here via the WSB business line). What he told her regarding issues mentioned in the GRE 509 Olive LLC objection to the sale:

*Regarding the club lease: “The lease is ready to be signed as soon as the judge approves the sale.”

*Regarding the non-compete clause: He believes it is not enforceable.

*In general, he believes GRE’s objections are not about him but about the money they say Allstar’s current ownership owes them. “This (GRE) is another person who was burned [by Allstar ownership] and I have nothing to do with that.”

Speaking of which – he reiterated what he told us a week and a half ago, that he will “honor 99% of those pre-paid memberships. I’m sorry, there will be some people who invested in the business, those who have lifetime, or 3, 4, 5-year memberships – those are not memberships, those are investments/partners in the business which no longer exists, they are not MY partners, but I want them to be members of the club. … I am looking to honor the majority of prepaid memberships – the buy a year, get one year free, buy 6 months get 6 months, I want to honor THOSE. I’m coming to fix up the club, I want to be a positive business in West Seattle, it’s a great community and a great club that needs improvements. (But) If people paid $3k, or $100k, those are investments in a business that is no longer there, and I’m sorry. … It’s a great community, and I want to be a part of it. The club is a ship that needs to be righted, and the members deserve to have it righted. I want to do my best to right the ship, to clean up the club, and we will do right by as many people as we can. … Out of the 2100 people listed as having/being an issue, it’s probably closer to like 50 to 100 that are real problems, that were investments [with the current ownership]. The rest, we plan on honoring those. We are going to honor prepaid memberships. It’s a handful, it’s not thousands, it’s not hundreds, it’s a handful that are investments not prepaid memberships.”

And there’s yet ANOTHER new document in the case file, added late today – a response to the dozens of objections, filed on behalf of the Chapter 11 bankruptcy trustee Richard Hooper, who has been in charge of club operations for an interim period while pursuing a sale. This response addresses one known error in previous documents and also says some names are on the “Rejected Contract” list because of inaccurate information. See the document in full here; here’s an excerpt:

1. Many of the Responses filed appear to have been filed based on a typographical error in the Notice of Hearings sent to the creditors and members of the fitness club located at 2629 SW Andover Street, Seattle, WA 98126 operated by the Debtor and commonly known as ALLSTAR FITNESS (the “Club”). The Notice of Hearings stated in part:

The Trustee also seeks Court approval to (1) assume and assign to the buyer the contracts of those members on month-to-month contracts and those members on prepaid long term memberships who purchased those membership AFTER the start of this bankruptcy case on August 27, 2013, and (2) to reject and terminate the contracts of the remaining long term prepaid members upon the sale of the Club to the buyer.
(emphasis added)

Accordingly, a number of members believed their contracts would not be assumed and assigned to the Buyer when in fact the underlying motion and purchase and sale agreement made clear that it is the intention of the proposed purchaser of the Club, West Seattle Fitness Club, LLC (the “Buyer”), to assume all membership contracts entered into by the Debtor on or after August 27, 2012, as this bankruptcy case did not commence until August 27, 2012,

2. This typographical error was further compounded by what the Trustee discovered to be partially inaccurate records kept by the Debtor with respect to the date of entry of many of the long-term prepaid contracts in its system. In preparing Exhibit B to the Trustee’s Declaration filed in support of the Motion (Dkt. No. 95), the Trustee relied on Club data to prepare a list of those members with contracts dated prior to August 27, 2012. Unfortunately, the data provided by the Club proved inaccurate, as a number of members who entered contracts dated after August 27, 2012 appeared on the list of pre-petition long-term prepaid contracts being rejected.

3. In order to further clarify the intentions of the Buyer and the Trustee with respect to which contracts and agreements will be assumed by the estate and assigned to the Buyer, and those rejected, the Trustee and Buyer have entered into a First Amendment (the “Amendment”) to the Asset Purchase Agreement dated March 1, 2013 (the “APA”) attached as Exhibit A hereto. The Trustee would further propose that any order approving the Sale Motion reflect similar language.

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Allstar Fitness bankruptcy: Sale/’rejected contracts’ hearing Friday; member response deadline Wednesday http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-salerejected-contracts-hearing-friday-member-response-deadline-wednesday/ http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-salerejected-contracts-hearing-friday-member-response-deadline-wednesday/#comments Mon, 18 Mar 2013 18:31:33 +0000 WSB http://westseattleblog.com/?p=145204 Continuing our followups on the Chapter 11 bankruptcy and impending sale of West Seattle’s Allstar Fitness: This Friday is the day a federal judge will consider approving the proposed sale of the club to health-club entrepreneur and former Seahawks player Sam Adams. As first reported here on March 9, court documents say that Adams does not want to assume “long-term contracts” from before last August’s bankruptcy filing. He denied that in a conversation with WSB the next day (here’s our March 10th report), saying he expected to honor “99 percent” of them, but so far, the court filings have not changed. This Wednesday, March 20th, is the deadline for interested parties to file responses with the court. As of this morning, the online file includes only a handful of responses to the sale motion, and one response to a separate motion that is scheduled to be heard April 5th – a request that the judge give permission for court proceedings NOT to result in further mass notices.

One WSB’er suggested that in case members missed the mail notification and/or still don’t know whether they are on the list of contracts proposed as “rejected” contracts, we upload the publicly available court documents here. Here’s the one with the “prepaid contracts to be rejected” list – 17 pages holding more than 2,000 names. If you want to file a response to be considered before this Friday morning’s hearing on the sale motion – which includes the “rejected contracts” list – this court document originally included in our March 9th report explains how to do so by the Wednesday deadline.

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Allstar Fitness bankruptcy: What prospective owner Sam Adams says about contract cancellations and club renovations http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-what-prospective-owner-sam-adams-says-about-contract-cancellations-and-club-renovations/ http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-what-prospective-owner-sam-adams-says-about-contract-cancellations-and-club-renovations/#comments Mon, 11 Mar 2013 03:30:24 +0000 WSB http://westseattleblog.com/?p=144366 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.)

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AllStar Fitness bankruptcy: Cancellation sought for 2,100 prepaid contracts http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-cancellation-sought-for-2100-prepaid-contracts/ http://westseattleblog.com/2013/03/allstar-fitness-bankruptcy-cancellation-sought-for-2100-prepaid-contracts/#comments Sun, 10 Mar 2013 06:54:35 +0000 WSB http://westseattleblog.com/?p=144295 By Tracy Record
West Seattle Blog editor

The newest development in the AllStar Fitness Chapter 11 bankruptcy and proposed sale: We heard today from multiple club members who reported receiving a copy of these court documents for a motion asking the federal bankruptcy judge to allow the cancellation of contracts purchased before the bankruptcy proceedings started last August.

Other court documents we have since obtained online say that would mean a cancellation of more than 2,100 contracts for the North Delridge club.

Those documents explain that Chapter 11 bankruptcy trustee Richard Hooper believes:

… the Club’s balance sheet has been hampered by the Debtor’s longstanding practice of selling long-term membership as significant discounts. A practice which the Trustee ceased in the interim period of his appointment. It was often the case that the Debtor would offer members reduced monthly rates in return for prepaying 6 or 12 months at a time. The Debtor would further discount these pre-paid memberships by offering an additional 6 or more months free of dues as an additional incentive for prepaying the already reduced rate. As sales of these prepaid membership slowed, the Debtor’s ability to meet its ongoing obligations suffered greatly. It appears from the Debtor’s financials that it relied heavily on these prepayment to meet operational and other needs…

The court documents say the trustee does want to:

(1) assume and assign to the buyer the contracts of those members on month-to-month contracts and those members on prepaid long term memberships who purchased those membership AFTER the start of this bankruptcy case on August 27, 2013, and (2) to reject and terminate the contracts of the remaining long term prepaid members upon the sale of the Club to the buyer. The Trustee believes that the proposed sale and assumption/assignment and rejection of contracts is in the best interests of the estate and its creditors because (i) this is the highest and best offer received by the Trustee to date, and (ii) the Club is currently unable to fund its ongoing operations and the costs of these proceedings.

2013 is what the document says, but the case actually started in August 2012. One member – who bought memberships just weeks before the bankruptcy filing – wrote, “A number of us will lose a substantial amount of money if existing prepaid memberships are terminated by the court. Longtime members of the gym, my partner and I purchased three-year membership renewals (the offer: pay for two years, get another one free). … Is it really too much to ask that the new owner honor existing memberships until they expire — if only as investment in future loyalty and to build goodwill and positive word of mouth in the West Seattle community?”

Meantime, the additional court document we downloaded tonight has details on proposed sale terms – including:

The Buyer proposes to purchase the Transferred Assets for a purchase price of $75,000 pursuant to the terms of the Agreement. Title to the Transferred Assets shall be conveyed without warranty as to title after the Trustee obtains an order from this Court approving the sale free and clear of all liens. As part of the Agreement, the Buyer will assume all of the month-to-month memberships in good standing as of the entry of the Sale Order, as well as all post-petition prepaid Club memberships listed on Schedule 1.1(b) (the “Assigned Contracts”). The Buyer will not be assuming the pre-petition long term member contracts and the Trustee will be rejecting these contracts (the “Rejected Contracts”).

It is pointed out in that document that the current club owners do not own the real estate, so in addition to the expense of buying the assets, the new owner has to negotiate a lease.

The documents say a hearing is planned at the federal courthouse before Judge Karen Overstreet at 9:30 am March 22nd; the sale, to a company owned by former Seahawks player Sam Adams, will be approved, the documents say, if nobody challenges it.

Another hearing set for April 5th – mentioned in the document members just received – is aimed at seeking permission to limit hearing notices from hereon out:

The Trustee is also seeking an Order from the Court to limit his obligation to provide all members and creditors notice of future motions and hearings in this case because of the significant expense of such notices, the Club’s inability to fund its ongoing operations and the cost of these proceedings, and the high likelihood that unsecured creditors will not receive distribution from this case. The Trustee is proposing that he only be required to provide future notices to: (1) all creditors appearing on the Debtor’s schedules; (2) those persons filing proofs of claim on or before April 5, 2013, and (3) those persons filing requests for special notice on or before April 5, 2013.

The court documents include instructions on when and how to send letters challenging either of the above, if you are interested.

Meantime, we’ve been trying to reach prospective new owner Sam Adams for comment (even before this development) and will continue to follow up as the case, and sale, proceed.

SUNDAY, 10:30 AM: Just talked with Sam Adams. He says he expects to honor “99 percent” of the 2100 aforementioned contracts but not those he described as “illegal” – very-long-term contracts (3 or more years, he thought) including those that resulted from investment money given to the longtime owners as they proposed a new club on the Eastside. Separate story to come within a few hours with details from our conversation, including Adams’ plans to renovate what he confirms will be renamed West Seattle Athletic Club.

SUNDAY, 9:31 PM: Here’s the link to that story.

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West Seattle’s Allstar Fitness has a buyer: Ex-Seahawk Sam Adams http://westseattleblog.com/2013/02/west-seattles-allstar-fitness-has-a-buyer-ex-seahawk-sam-adams/ http://westseattleblog.com/2013/02/west-seattles-allstar-fitness-has-a-buyer-ex-seahawk-sam-adams/#comments Fri, 22 Feb 2013 22:50:38 +0000 WSB http://westseattleblog.com/?p=142391 WSB has just confirmed that Allstar Fitness, put up for sale as part of its Chapter 11 bankruptcy (as first reported here February 5th), has a buyer – a company owned by former Seahawks player Sam Adams, who already owns other former Allstar locations.

Allstar’s staff received word of the sale this morning, and a handout about the announcement is available at the club’s front desk, Allstar’s Chapter 11 trustee Richard Hooper tells WSB. Hooper confirms that the prospective ownership company is West Seattle Athletic Club LLC, which state records verify is owned by Adams, who was a Seahawk for six seasons and was then part of the Super Bowl-winning Baltimore team in 2000. The former player owns five fitness clubs under the umbrella of Oregon Athletic Clubs, four including former Allstar locations in southwest Portland and in Tacoma. According to the Portland Oregonian, Adams bought the other three Oregon clubs last fall. (He also was reported in 2011 to have owned a downtown Seattle club that moved into a former Allstar space, though we haven’t been able to verify its current ownership.) Adams is a Kirkland resident, according to this recent story on the Seahawks website. Trustee Hooper tells WSB that nothing will change with West Seattle Allstar – “it’s status quo … a great place to work out” – until and unless the bankruptcy court approves the sale, although he doesn’t expect that to take more than a few weeks.

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Followup: West Seattle’s Allstar Fitness put up for bankruptcy-prompted sale http://westseattleblog.com/2013/02/followup-west-seattles-allstar-fitness-put-up-for-bankruptcy-prompted-sale/ http://westseattleblog.com/2013/02/followup-west-seattles-allstar-fitness-put-up-for-bankruptcy-prompted-sale/#comments Tue, 05 Feb 2013 23:09:33 +0000 WSB http://westseattleblog.com/?p=139915 Three weeks ago, we reported on the court-appointed Chapter 11 bankruptcy trustee for West Seattle Fitness, the official name of the company operating West Seattle’s popular Allstar Fitness, and the likelihood he would be preparing the club for a potential sale. This week, trustee Richard A. Hooper is telling members that the club is indeed up for sale; he announced it via a letter available at the club’s counter. A member scanned the letter and sent it to us. At the heart of the letter (here’s the full scan):

… West Seattle Fitness has only one mission and that is to providea safe, clean, and enjoyable facility for use by its members and guests. Since the club opened, the staff has worked hard to make sure that this standard was met.

I have met with the management team of the club and we have discussed the mission as stated above and they have all assured me that they will continue to work to this end.

The facility is suffering from economic stress due to a number of factors that are complicated and will be difficult to sort out in the short term. As a result of this economic stress the only solution is to place the club for sale to another operator at the earliest possible date.

I am currently meeting with prospective buyers who would operate the club and who would bring funds necessary to repair and upgrade as needed for equipment and facilities. I think the process of locating a buyer, obtaining the necessary court approvals, and closing will take 60 days or perhaps slightly more, depending on hearings and legal issues. …

The letter says future updates will be available as “handouts” at the front counter. After we received the scanned copy of this one, WSB’s Katie Meyer spoke again with club manager Ramon Velasquez, who confirmed the letter’s distribution and the sale plans, saying there are at least three “very interested parties.” We first reported about Allstar’s bankruptcy filing back in October.

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Followup: Bankruptcy trustee appointed for Allstar Fitness http://westseattleblog.com/2013/01/followup-bankruptcy-trustee-appointed-for-allstar-fitness/ http://westseattleblog.com/2013/01/followup-bankruptcy-trustee-appointed-for-allstar-fitness/#comments Tue, 15 Jan 2013 06:33:11 +0000 WSB http://westseattleblog.com/?p=136957 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

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West Seattle businesses: Allstar Fitness says operations ‘strong,’ unchanged by Chapter 11 filing http://westseattleblog.com/2012/10/west-seattle-businesses-allstar-fitness-says-operations-strong-unchanged-by-chapter-11-filing/ http://westseattleblog.com/2012/10/west-seattle-businesses-allstar-fitness-says-operations-strong-unchanged-by-chapter-11-filing/#comments Mon, 22 Oct 2012 08:30:34 +0000 WSB http://westseattleblog.com/?p=127164 Management at Allstar Fitness says it plans to send a letter to its members explaining that its recent Chapter 11 filing is not affecting and will not change membership services and operations. We sought out Allstar management/ownership after receiving inquiries from members who said the filing was the subject of rumors; we also have reviewed court documents. The filing in the Western Washington division of United States Bankruptcy Court, under the company’s official name West Seattle Fitness LLC, actually happened in late August, as Allstar general manager Ramon Velasquez pointed out in a conversation with WSB researcher/editorial assistant Katie Meyer. He says the club’s daily operations, including hours, classes, and staff, have not and will not be affected by the proceedings, and that the forthcoming letter to members will include that information. Velasquez told WSB that memberships will not be affected and that there has been no interruption in employee wages, health coverage, vacations, etc. He says the club’s operations are strong and that last month was their best September ever for memberships. (Chapter 11 is a bankruptcy filing for reorganization, as explained on this federal-government page.) Photo: King County Assessor website

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