March 24, 2013

AllStar Fitness - West Seattle - Bankrupt - Sold to Sam Adams

It's official, multiple news outlets are reporting that the last remaining Allstar Fitness location, in West Seattle, owned by Bob Padgett, is bankrupt. After a federal bankruptcy court hearing in late March 2013, the West Seattle AllStar Fitness location has been sold to a company called Oregon Athletic Clubs. The announcement was made officially in a notice posted at the door fo the West Seattle AllStar Fitness club on March 22, 2013. At least temporarily the facility was closed and no members were allowed access. The West Seattle facility will apparently be renamed West Seattle Athletic Club, under the Oregon Athletic Clubs ownership. 

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It turns out that the owner of Oregon Athletic Clubs is none other than Sam Adams. If that name sounds familiar, its because Sam Adams is the same former Seahawk player who started Epicenter Fitness with Merle Gregg in Seattle sometime during 2004 or 2005. Early in its history, Epicenter Fitness grew into a multiple location company, and then shrank back into its single downtown Seattle location until Epicenter bought the two downtown Seattle AllStar Fitness locations from Bob Padgett and transformed them into Epicenter Fitness. Within a few months of that buyout some sort of disagreement occurred between Merle Gregg and Sam Adams that ended with Merle Gregg buying out Sam Adams. Merle Gregg then reincorporated the two downtown Seattle facilities into what is currently the two Seattle Executive Fitness in downtown Seattle. 

Meanwhile, there are various news media reports about the details of what will happen at the location that will now become West Seattle Athletic Club. Apparently the new owners are going to honor long term prepaid memberships from the club's previous members. According to various news reports, the company has been under the control of a Chapter 10 bankruptcy trustee since August 2012. That is Chapter 10, not Chapter 11, bankruptcy. In a Chapter 10 bankruptcy, a trustee takes over control of the company and negotiates its final disposition with creditors. Apparently federal bankruptcy judge Karen Overstreet is also ordering further investigation of Bob Padgett by the U.S. Attorney's Office (the federal prosecutor), regarding Padgett's activities and handling of his business and its bankruptcy. 

Although the bankruptcy sale was approved, numerous creditors made a variety of objections. The company that is apparently the owner of the Medical Dental building at 509 Olive Way, where one of the current Seattle Executive Fitness locations exists, filed one of the most adamant objections. Apparently, West Seattle Fitness, LLC, the real corporate owner of the West Seattle AllStar Fitness location, owes the Olive Way company $2.5 million dollars! The writers at have been following this story and publishing minute details about the proceedings on their blog (follow this link).

One can only hope that members of what will become West Seattle Athletic Club will have a reasonable experience under the new owners. It seems like there should be some doubt, since the new owner Sam Adams, is part of the same long history of dubious gym ownership in Washington State that is central to numerous related gym ownership changes and gym closures.

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