Rural/Metro officially files Chapter 11 bankruptcy

[SandpitMedic]

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!?

 

[Aidey]

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

 

[PotatoMedic]

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

 

[djarmpit]

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?

 

[Handsome Robb]

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.

 

[MrJones]

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.

....

Rural/Metro reached an agreement with both its senior secured and unsecured debt holders to reduce its debt and interest payments by nearly 50 percent.

Bondholders have also agreed to infuse $135 million in new equity financing once Rural/Metro emerges from Chapter 11, according to a filing.

....

"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," Chief Executive Scott Bartos said.

Rural/Metro anticipates completing its restructuring in the fourth quarter of 2013.

source

 

[Wes]

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.

 

[dhump4free]

Time to beef up the ole resume.

 

[Farmer2DO]

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.

 

[socalmedic]

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.

 

[bbmtnbb]

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??

 

[Amberlamps916]

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.

 

[DPM]

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.

 

[Wes]

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.

 

[dhump4free]

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.

 

[DPM]

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.

 

[Monkey]

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.

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.

 

[DPM]

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.

 

[Monkey]

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.

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.

 

[chaz90]

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.