Four counties around Chattanooga watching ambulance provider's bankruptcy

Four counties around Chattanooga watching ambulance provider's bankruptcy

August 22nd, 2013 by Ben Benton in Local Regional News

Ambulance tile

Ambulance tile

Photo by WRCB-TV Channel 3 /Times Free Press.

Rural/Metro Corp., an Arizona-based ambulance service provider in four Southeast Tennessee counties, has filed for Chapter 11 bankruptcy protection, leaving some county officials concerned about future services.

Of the four, Franklin County has been the most affected. County Mayor Richard Stewart said the move triggered an exodus of eight local ambulance service workers. The other counties are Loudon, McMinn and Polk.

When Rural/Metro announced the bankruptcy, eight ambulance squad members resigned last week and weren't allowed to work out notices, according to reports in the Tullahoma News.

"They've hired more people for those positions," Stewart said on Wednesday. "They assured me they were going to be able to provide services."

Stewart added that he got that promise in writing.

Another ambulance service could ask the Franklin County Commission's standing legislative committee to be placed on the agenda in an upcoming meeting, Stewart said.

Officials with Rural/Metro earlier this month announced that the U.S. Bankruptcy Court for the District of Delaware granted interim approval of motions seeking to use $40 million of the company's $75 million Debtor-in-Possession financing to help support operations "throughout the financial restructuring process," a release from the company states. Rural/Metro "is authorized to pay for all going-forward goods and services."

The company's bondholders also have committed to invest an additional $135 million in the company. Officials say that will position Rural/Metro for new growth.

"This agreement is good news for Rural/Metro and for the clients and communities we serve," company President and CEO Scott A. Bartos said.

Bartos said the agreement will keep operations "moving forward" and cut the company's debt by half.

Polk County Executive Hoyt Firestone said Metro/Rural's bankruptcy hasn't had an effect there yet.

"To this point, there has been no change in the operation here in Polk County," Firestone said. "We really don't anticipate it causing any disruptions."

The county hasn't established a "contractual" backup plan, but officials have talked with other service providers just in case, he said.

In McMinn County, county mayor's assistant Mark Cochran said Rural/Metro is a secondary provider, usually as a nonemergency patient transporter.

There have been no problems with that service, Cochran said and American Medical Response provides primary services.

Neighboring Loudon County Mayor Estelle Herron said she is not worried at all.

"I think the bankruptcy is a cleanup act for them," Herron said, noting that the company debt was in high-interest bonds.

"I don't look for any issues," she said.

Contract staff writer Ben Benton at or 423-757-6569.