Posted at: 08/04/2013 8:42 PM
Updated at: 08/04/2013 11:34 PM
By: Joangel Concepcion
Ambulance provider Rural/Metro filed bankruptcy Sunday night.
The company says it has a new agreement with its lenders that will keep the company afloat while it reorganizes.
Rural/Metro says it has filed for Chapter 11 bankruptcy protection and has a plan to cut its expenses in half over the next quarter.
This announcement comes just days after the Wall Street Journal reported the Arizona based company had missed an interest payment on a bond.
So what does this all mean for the city of Rochester?
It's important to note right away the company is saying it expects operations to continue normally throughout this process.
This development is a big deal for our area because Rural/Metro has a contract with the city of Rochester to provide ambulance services for the next 20 years.
Just hours ago News10NBC received the news directly from the company, saying it filed for Chapter 11 Bankruptcy reorganization after reaching a deal with its lenders to cut its debt in half.
Officials say it will also receive a cash infusion of $135-million as part of its agreement with lenders and bond holders, which will be filed in U.S. Bankruptcy Court for the District of Delaware.
The company, which is based in Scottsdale, Arizona and owned by private equity firm Warburg Pincus, expects to complete its restructuring by the fourth quarter of this year.
Officials say the process will help ensure that Rural/Metro can continue to invest in its business, meet the needs of customers, patients and communities and further improve service.
The company vows to continue to serve its patients through out 21 states with the highest quality of services.
Rochester Mayor Tom Richards spoke about the potential bankruptcy filing and how Rochester is prepared to deal with this bankruptcy just days ago.
“The good news is we have not seen a degradation in level of service locally. We haven't seen that show up and they assure us that it won't, but I'm not necessarily taking their word for it. We are monitoring very carefully the service level to make sure it doesn't change and we do that anyway. We have good statistics on that, so we have the capacity to monitor it. Our contract with them has some options about things we can do if this became a serious issue, that we can intervene in certain ways to make sure there is no impact on service,” said Mayor Richards.
Scott Bartos, Rural/Metro's new president and CEO, released this statement Sunday night:
This agreement is good news for Rural/Metro and for the clients and communities we serve. We have a solution that keeps our operations moving forward while cutting our debt in half. The significant infusion of new capital by our lenders underscores their confidence in the value of our business, and will help ensure that we have a strong financial footing to resume growth and investment while honoring our agreements and continuing to provide outstanding service and patient care.”
Bartos also said the company expects to move through this process quickly and to be a stronger, more competitive and more profitable organization.
Mayor Richards did tell News10NBC he would be meeting with company officials in less than a week.
News10NBC will continue to follow this story and bring you any updates.