# Rural/Metro officially files Chapter 11 bankruptcy



## SandpitMedic (Aug 5, 2013)

Rural/Metro officially files For Chapter 11 bankruptcy in Delaware. 
Anyone on the front lines know much about this?

Perhaps Envision(AMR) will buy them up!?


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## Aidey (Aug 5, 2013)

Just to clarify, the whole company filed for bankruptcy protection, not just the Delaware division. They just happened to file the paperwork in Delaware.


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## PotatoMedic (Aug 5, 2013)

Will be quite interesting to see what happens across the country.  And locally since RM is around where I live.


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## djarmpit (Aug 5, 2013)

soo.....I'm not too knowledgeable about this stuff...what's likely going to happen? Will employees lose their jobs? Will R/M vanish or will they be able to stay a business?


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## Handsome Robb (Aug 5, 2013)

djarmpit said:


> soo.....I'm not too knowledgeable about this stuff...what's likely going to happen? Will employees lose their jobs? Will R/M vanish or will they be able to stay a business?



I don't understand it very well either but from my very basic knowledge a chapter 11 filing is to reorganize things and negotiate new terms with lenders rather than selling off the corporation to pay off the debt which would be a filing under chapter 7. 

With that said I may have it totally wrong.


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## MrJones (Aug 5, 2013)

> Ambulance operator Rural/Metro Corp, owned by private equity firm Warburg Pincus, filed for Chapter 11 bankruptcy with the aim of cutting its debts after it missed an interest payment in July, according to court filings.
> 
> The Scottsdale, Arizona-based company also intends to renegotiate unprofitable contracts and free up capital for investments through the bankruptcy process, according to the filings.
> 
> ...


source


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## Wes (Aug 5, 2013)

Chapter 11 is for the reorganization of debt.   Entering Chapter 11 of the Bankruptcy Code allows for R/M to renegotiate debt, exit contracts, etc. 

In other words, they can do almost anything, with the blessing of the bankruptcy trustee and judge, to become solvent.


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## dhump4free (Aug 5, 2013)

Time to beef up the ole resume.


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## Farmer2DO (Aug 5, 2013)

Wes said:


> Chapter 11 is for the reorganization of debt.   Entering Chapter 11 of the Bankruptcy Code allows for R/M to renegotiate debt, exit contracts, etc.
> 
> In other words, they can do almost anything, with the blessing of the bankruptcy trustee and judge, to become solvent.



Yup.

Which translates into screwing their creditors.

My opinion is, Warburg Pincus, the investment firm that bought them (purely to make money), pushed for this to happen. That way, they can get rid of debt they don't want to pay, and become more profitable. Which means the investment firm makes more money.

I have a problem with the way that works. Why should people and businesses who are owed money have to settle for less of it, when it was Rural/Metro's business decisions that have landed them there.

I'm glad I'm not working there anymore.


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## socalmedic (Aug 5, 2013)

djarmpit said:


> soo.....I'm not too knowledgeable about this stuff...what's likely going to happen? Will employees lose their jobs? Will R/M vanish or will they be able to stay a business?



most employees with stay employed. however this will allow them to exit all union CBA's resulting in less pay, less retirement benefits, and less healthcare coverage. they can also leave any municipal contracts which may not be profitable without paying the termination fees. basically its a get out of jail free card for the execs who will most likely still get their full salary and bonus or a golden severance package.

the investors and lenders will also loose A LOT of money.


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## bbmtnbb (Aug 6, 2013)

I'm not really sure how this works but, won't contracted entities think twice about re-contracting with R/M since the bids for service were obviously understated? They could not remain solvent at the bid prices and thereby are an unreliable company? Am I missing a business move here or??


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## Amberlamps916 (Aug 6, 2013)

bbmtnbb said:


> I'm not really sure how this works but, won't contracted entities think twice about re-contracting with R/M since the bids for service were obviously understated? They could not remain solvent at the bid prices and thereby are an unreliable company? Am I missing a business move here or??



In a sense, they should. Although for Rural Metro, this is like a get out of jail free card. Either they wise up and reduce losing endeavors or they keep doing what they've been doing, continuing the cycle of bad decisions.


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## DPM (Aug 13, 2013)

I'm interested to see where this all goes. In my 'region' R/M has a 911 county contract (Santa Clara County, which has been having some serious issues recently) as well as a contract with Kaiser Permanente to cover their IFT needs in a three county area. From all accounts the IFT guys have been profitable, the 911 division not so. If they end their 911 contract (which is something the Santa Clara County EMS is worried about) I'd like to see what repercussions there would be, if any.


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## Wes (Aug 13, 2013)

Generally speaking, none. Bankruptcy proceedings allow the debtor, with approval of the bankruptcy trustee and court, to shed or renegotiate almost any agreement.  And the other party to the contract has few, if any, remedies if the debtor is given permission from the court to terminate a contract.


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## dhump4free (Aug 13, 2013)

DPM, how did the whole strike thing go? They were asking a bunch of us down in SoCal if we would be willing to go up and cover shifts.


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## DPM (Aug 13, 2013)

They haven't gone on strike yet. I know that many people around here aren't interested in crossing the picket line. With the company's current issues I'm interested to see how a strike would affect the financially. They are offering $500 on top of the regular hourly wage... though many here are skeptical that it would materialize. 

"Well, it's was $500 for a 24hr shift, but you were put out of service at 23 hours and 20 minutes so you don't get it."

And beyond that, it's a close community up here. We're not interested in f***ing over our friends in Santa Clara when all they want is a fair deal.


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## Monkey (Aug 13, 2013)

Fair deal?  When they took over up there the union got them one HELL of a deal, now they want more?  When I heard what the wages were they got up there,  I was stunned.  

To me from the numbers and such I've heard, it's a tad over the top and I can't blame ANY company for balking at the demands, but again, it's here-say so...

I'd normally never cross a  picket line, but if they demands are truly that far out, and I get a couple weeks pay at their current wage, I just may take it.















DPM said:


> They haven't gone on strike yet. I know that many people around here aren't interested in crossing the picket line. With the company's current issues I'm interested to see how a strike would affect the financially. They are offering $500 on top of the regular hourly wage... though many here are skeptical that it would materialize.
> 
> "Well, it's was $500 for a 24hr shift, but you were put out of service at 23 hours and 20 minutes so you don't get it."
> 
> And beyond that, it's a close community up here. We're not interested in f***ing over our friends in Santa Clara when all they want is a fair deal.


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## DPM (Aug 13, 2013)

Monkey said:


> Fair deal?  When they took over up there the union got them one HELL of a deal, now they want more?  When I heard what the wages were they got up there,  I was stunned.
> 
> To me from the numbers and such I've heard, it's a tad over the top and I can't blame ANY company for balking at the demands, but again, it's here-say so...
> 
> I'd normally never cross a  picket line, but if they demands are truly that far out, and I get a couple weeks pay at their current wage, I just may take it.



It's not just a case of pay and other benefits. It's the general working agreement. I don't want to say too much, but the union isn't striking for purely financial reasons. People being written up for not following the CAD when it directs you to take gridlocked rush hour traffic on the freeway, things like that. Their hourly pay is good, and so are all the surrounding counties. It's unrealistic to compare it to SoCal.


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## Monkey (Aug 14, 2013)

Ok.  That is a BS policy.  Is that in you CBA or policies?  We are not punished for not using the CAD to map every call, that's insane.  It's sad things are that petty up there. 






DPM said:


> It's not just a case of pay and other benefits. It's the general working agreement. I don't want to say too much, but the union isn't striking for purely financial reasons. People being written up for not following the CAD when it directs you to take gridlocked rush hour traffic on the freeway, things like that. Their hourly pay is good, and so are all the surrounding counties. It's unrealistic to compare it to SoCal.


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## chaz90 (Aug 14, 2013)

DPM said:


> People being written up for not following the CAD when it directs you to take gridlocked rush hour traffic on the freeway, things like that.



There are companies that write employees up for this nonsense? I'm ignorant of so many things. I can't even comprehend working somewhere with that kind of atmosphere.


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## Carlos Danger (Aug 14, 2013)

Farmer2DO said:


> Yup.
> 
> Which translates into screwing their creditors.
> 
> ...



Good question. 

In theory, bankruptcy judgements are supposed to take that into account and come up with a deal that is not-too-unfair to the creditors. It's not intended to be a "get out of jail free card" as much as it is a way to come up with a deal that causes everyone involved the least amount of pain. Losing money to a bad investment is a risk creditors accept when they decide to loan money, and an important part of a free market. The alternative could be that the creditors get nothing at all, if the company doesn't declare bankruptcy and then can't re-organize and eventually just goes completely under. 

In actual practice, you can unfortunately get situations like this, where powerful execs with knowledgeable legal staffs exploit the law for personal benefit.


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## dhump4free (Aug 14, 2013)

DPM said:


> They haven't gone on strike yet. I know that many people around here aren't interested in crossing the picket line. With the company's current issues I'm interested to see how a strike would affect the financially. They are offering $500 on top of the regular hourly wage... though many here are skeptical that it would materialize.
> 
> "Well, it's was $500 for a 24hr shift, but you were put out of service at 23 hours and 20 minutes so you don't get it."
> 
> And beyond that, it's a close community up here. We're not interested in f***ing over our friends in Santa Clara when all they want is a fair deal.



Last I heard one guy had signed up to help out up there. For me I'm not crossing the picket line because it's your business and it's your right to strike. I wouldn't want the same happening to me down here when I'm trying to change something.

And I understand the skepticism about the extra pay. I can't tell you the number of times I haven't gotten a C7 and was never compensated for it.


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## DrankTheKoolaid (Aug 14, 2013)

Patients still deserve to be taken care of and any true health care provider will realize that, and would never look down on a "scab" coming on to cover the units.

I think EMS should follow what Canada did last year when they went on strike. Continue doing patient care and not do a single bit of billing paper work or anything else


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## RocketMedic (Aug 15, 2013)

My dad and I were talking about strikes today, in particular the Gold Cross strike. Our consensus was that even if they win...they lose. I don't see R/M NY or Gold Cross keeping their contracts after these troubles.


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## DPM (Aug 20, 2013)

RocketMedic said:


> My dad and I were talking about strikes today, in particular the Gold Cross strike. Our consensus was that even if they win...they lose. I don't see R/M NY or Gold Cross keeping their contracts after these troubles.



This^

R/M in Santa Clara county is already having trouble. Before they filed chapter 11 the county was worried about them just upping sticks and leaving the county so I'm sure recent events haven't made them feel any better. And as a company that's already in financial difficulty, what would the monetary knock on be if they were to strike?  Can Rural / Metro Santa Clara, or Rural / Metro West afford it?

I can see a lot of people losing their jobs if R/M forfeits their Santa Clara contract. I think the likelihood of this happening would be greatly increased if the worker's strike and the company has to try and provide coverage from other agencies. Industrial action could be the straw that breaks the camel's back, leaving a lot of these guys unemployed.


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## Pavehawk (Aug 21, 2013)

Just to keep things in perspective, RM in Orlando is hiring a bunch of EMTs and medics. Like many companies that file a Chap 11, RM stands to come out of the reorganization stronger and in better financial health.

After the recent events in OK, the company that might need to worry is PP. With AMR expanding into that market, and a stronger RM coming out of a BK in a year or so they could find themselves facing even more competition... and that's not even factoring in Falack.

Should be interesting!!


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## Aprz (Aug 21, 2013)

DPM said:


> This^
> 
> R/M in Santa Clara county is already having trouble. Before they filed chapter 11 the county was worried about them just upping sticks and leaving the county so I'm sure recent events haven't made them feel any better. And as a company that's already in financial difficulty, what would the monetary knock on be if they were to strike?  Can Rural / Metro Santa Clara, or Rural / Metro West afford it?
> 
> I can see a lot of people losing their jobs if R/M forfeits their Santa Clara contract. I think the likelihood of this happening would be greatly increased if the worker's strike and the company has to try and provide coverage from other agencies. Industrial action could be the straw that breaks the camel's back, leaving a lot of these guys unemployed.


Somebody has to do the job. I doubt they have to worry about being unemployed.


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## Aprz (Sep 7, 2013)

More news on Rural/Metro Santa Clara.



			
				San Jose Mercury News said:
			
		

> Already facing bankruptcy, Santa Clara County's troubled ambulance provider is preparing a plan to cut short its five-year contract, on which the company claims to be losing $5 million annually.


http://www.mercurynews.com/politics...-county-ambulance-providers-travails-may-open

I wonder if it's actually gonna happen, and if so, what changes will be made to the contract if Rural/Metro continues to be the exclusive operating agency.


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## terrible one (Sep 7, 2013)

Didn't R/M underbid that contract but quite a lot?


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## SandpitMedic (Oct 7, 2013)

Did Falck buy them yet?


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## PotatoMedic (Oct 7, 2013)

My understanding is they would rather watch them go under then take over.


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## PotatoMedic (Dec 17, 2013)

http://www.wbir.com/story/news/local/2013/12/17/rural-metro-emerge-from-bankruptcy/4071281/

They will emerge and we shall all see what is going to happen.


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## RocketMedic (Dec 17, 2013)

Pavehawk said:


> Just to keep things in perspective, RM in Orlando is hiring a bunch of EMTs and medics. Like many companies that file a Chap 11, RM stands to come out of the reorganization stronger and in better financial health.
> 
> After the recent events in OK, the company that might need to worry is PP. With AMR expanding into that market, and a stronger RM coming out of a BK in a year or so they could find themselves facing even more competition... and that's not even factoring in Falack.
> 
> Should be interesting!!



^ This: Paramedics Plus is a vestigial organ on the body of the juggernaut that is ETMC. Even a regional operator like Acadian could seriously outbid them, to say nothing of AMR.


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## lightsandsirens5 (Dec 17, 2013)

RocketMedic said:


> ^ This: Paramedics Plus is a vestigial organ on the body of the juggernaut that is ETMC. Even a regional operator like Acadian could seriously outbid them, to say nothing of AMR.



That is one way of putting it.

I do know that around HQ, in East Texas, ETMC has shut down a ton of stations and reassigned or let go some employees. I wonder what the national picture looks like for them.

Anyhow, as some have stated, I would not be surprised to see RM come out of this much better than how they went in.


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## gclol (Dec 19, 2013)

If that's the case I don't see them staying in alco county if they are trimming fat in there own state, they budgeting so much in alco county since there is no money here in this county without a IFT side.


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