Liberty Medical Supply, a home delivery health care products provider, filed Chapter 11 bankruptcy a midst pressure from creditors. The company is known for providing diabetes supplies and products for a variety of medical aliments. According to the company’s website, over 1 million Americans use their medical supplies on a daily basis. Liberty Medical is said to have 9 affiliate companies that have also filed for bankruptcy protection.The company President, Frank Harvey, confirmed the filing on Feb. 15. He says the company is using the filing to help them work through issues while day-to-day operations continue. Documents related to the filing claim Liberty Medical has between $100 million and $500 million in liabilities. Several creditors are disputing claims against the home delivery health care provider with close to $140 million being owed to CGS Administrators, and $14 million being owed to Medico Health Solutions.
Harvey feels that Chapter 11 is a useful business tool. He noted that some of the most successful businesses in the world have used it to sort out financial issues while helping improve future profit potential. The filing will help give the company more time to deal with their outstanding debt, lessen pressure felt from creditors and restructure the business to improve financial growth.
Other issues have led to the filing including tax liability issues with its former parent company and overpayment liabilities by CMS (Center for Medicare and Medicaid Services). The company noted in bankruptcy documents it has up to 5,000 employees.
Reference: http://www.reuters.com/article/2013/02/15/libertymedicalsupply-bankruptcy-idUSL1N0BF60V20130215
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