lawyer girls

i'm not sure if i have a case or if it is even worth pursuing, but DH was living in an apartment with a friend leading up to the wedding and us buying a house... he needed to get out of the lease early because we bought a house, and the leasing office stated that if he found someone else to take over the lease he could transfer it. so he found two people that signed a contract (DH didn't think to get something signed by the office stating we were no longer responsible because he doesn't think ahead like that) but turns out the two people left the apartment a month early and didn't pay the rent for that last month so now the place will not return our security deposit of $1300 (which we owe to my in laws because they laid out the money)- we are still strapped for cash and are trying to get the money from the apartment. They were by the lease supposed to send a notarized letter 2 months after the end of the lease with explanation of charges to be taken out of the security. we got no letter and assumed we are not responsible as other tenants were to sign a lease. the apartment complex conveniently 'can't find' any trace of a lease with the people that took over the apartment and on the phone said that the security is to cover the missed rent. We tried negotiating asking for only $650 back and we would each share a loss- they refuse.. the current leasing agent says since he only recently took over we would need to call the prior owner in israel to be helped.... so is it worth going to small claims court or would it not be in our best interest?

TIA