Promises Malibu Bankruptcy Leaves Law Firm in the Lurch
In a recent move that is going to be characterized by massive restructuring within the entire company, Elements Behavioural Health filed for Chapter 11 bankruptcy. EBH's Promise Malibu Treatment Centre is famous for its celebrity clientele.
Some of the largest legal firms have also been left with huge unpaid bills as a result of this unprecedented move. From their declaration, the company that owns several addiction treatment centres declared that they only have $49.4 million in assets compared to the $207.3 that they have in liabilities. They also reportedly owe four legal firms to the tune of $2.47 million or more. In filing for bankruptcy, the company states that it lost $51.2 million in 2017 and posted revenue of $129.6 million.
Some of these firms include Goodwin Procter, owed the largest piece of this pie at $2.045 million, while the rest, Baker &Hostetler, Wilson Elser Moskowitz Edelman &Dicker and Butler Snow are owed $246,001,$96,586 and $86, 183 respectively.
While it is unclear what each of these firms specifically did for company, they are listed as some of EBHs largest unsecured creditors. Baker & Hostetler and Wilson Elser have previously represented EBH in litigation as is indicated in court filings.
EBH have engaged the services of fast growing Am Law 100 firm and healthcare practice power house, Polsinelli, in advising the company in Chapter 11alongside its partners Shanti Katona and Jeremy Jackson. Billing statements from the firm are yet to be filed with the bankruptcy court.
As part of the Chapter 11 process, EBH intends to sell itself for $65 million to Project Build Behavioural Health Inc. Which is an investment medium with the backing of a New York based hedge-fund; BlueMountain Capital Management and Platinum Health Care LLC co-founder Benjamin Klein.
EBH's case is however not isolated as CTMG Inc.,from Raleigh, North Carolina has also listed law firm creditors in a bankruptcy court before. The clinical trials company filed for Chapter 7 protection last month owing $20, 797.94 to Ballard Spahr. Currently advising CTMG in the bankruptcy court is Gerald "Jeb" Jeutter Jr who is also a former partner and member of the management committee at Kilpatrick Townsend &Stockton.
For more information on Promises Malibu Bankruptcy Leaves Law Firm in the Lurch, contact us at the Segaul Law Firm today.