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PALM DESERT- It's a $100,000 business dispute that's leaving members of a Coachella Valley gym paying the price.

 

Members of the gym formerly know as the Palm Desert Athletic Club, are calling our station saying their pre-paid gym memberships aren't being accepted. The problem started back in October when a new company--Athletic Inc.-- took over the gym. Now the former owners and the new owners are battling it out over who's financially responsible for the memberships.

 

"If someone comes in and walks off the street and says I have a gym membership....we don't know whether they do or not," Daniel Martorella, attorney for Athletic Inc.

 

Martorella says his clients were not provided a list of the members. He also says Palm Desert Athletic Club should have taken care of prior members. He also says his company didn't buy out the old company, and therefor not the entire financial liabilities.

 

"What we agreed to do is buy some of their assets, which is mostly the equipment, and we agreed to pay for some of the difficulties up to $15,000. Clearly their difficulties range in excess of $100,000. That was a mess they got into and that was a mess they have to get themselves out of," said Martorella.

 

But the lawyer for Palm Desert Athletic Club tells a different story. The attorney declined to give an interview on camera, but over the phone she called the situation a sloppy backdoor business deal. She blames the new company, Athletic Inc.

 

She says the new company agreed to take over the financial liabilities, including all existing members.

 

Now both sides are gearing up for a legal battle with tens of thousand of dollars at stake. As each tries to muscle their way to a win, some gym members are stuck with a several hundred dollar membership that doesn't do any good.

 

However, Martorella says Athletic Inc. wants to honor the old contracts. If you have a receipt or contract with the club, you can reach Martorello at 760-776-6666.

 

-Jessica Flores, KMIR6 News.