Bloomberg.com is reporting that the Scooter Store, troubled New Braunfels-based company that laid off the bulk of its entire workforce in the wake of a federal investigation into alleged Medicaire fraud, has filed for bankruptcy with "a plan to sell virtually all of its assets."
In a statement obtained by Bloomberg, Scooter Store CEO Martin Landon said, “Historical overhangs coupled with an increasingly complex regulatory environment and mounting economic pressure in the health-care sector have significantly impacted the company’s ability to operate under its current model."
Bloomberg reports that Scooter Store Holdings Inc. has listed assets of less than $10 million and debt of more than $50 million in Chapter 11 documents filed in U.S. Bankruptcy Court in Wilmington, Del.
Scooter Store will use Chapter 11 “to seek to create a new, financially healthy provider that operates in strict accordance with all legal, contractual and regulatory requirements,” Landon said in the statement.
The store owes the Centers for Medicare and Medicaid Services, administrators of two government programs, more than $19 million, according to court papers obtained by Bloomberg.
Morgan, Lewis & Bockius LLP and Young Conway Stargatt & Taylor LLP are serving as Scooter Store’s bankruptcy lawyers, Bloomberg reports. Morgan Joseph TriArtisan was hired to help with the asset sales and Lawrence Young of AlixPartners LLP was named chief restructuring officer.