MIDDLETOWN, N.Y. - Mark Manchester can't believe it.
Before going bankrupt in 1999, Coram Resource Network, a managed care administrator that sub contracted with HMEs, paid Manchester $6,880 of $22,000 owed. Better than nothing, thought the owner of Manchester Orthopedics. After all, when Manchester stopped doing business with Legend Health-care, another managed care administrator, that troubledcompany owned him about $25,000.
Now bankruptcy attorneys in the Coram case have contacted the Manchester, saying he may have to return that $6,000 as part of Coram's bankruptcy proceedings.
"It's just another one of those things that you can't believe is happening to you but it is," said Manchester. "This stuff comes in and you get so depressed about it that you just say, 'Throw it in the file.' I get to the point where I don't want to look at it."
When a company goes into Chapter 11, creditors generally ask attorney's to review all bills paid within in 90 days of the bankruptcy filing. They do so to determine if the company gave preferential treatment to some creditors and paid them - creditors they liked, for example - and stiffed others. Most likely, if Coram paid Manchester and other HMEs in the normal course of business during that 90-day window, they won't have to repay the money.
"All the creditors are going to ask for an exploration of who you paid, and they are going to look for every check cut and date it was cut, looking for any shenanigans, any preferential treatment of one creditor over another in that 90 days before filing," said an industry financial expert.
For Manchester, that means that he's had to turn over those files to his attorney, adding more legal expenses to the ones he's already accrued trying unsuccessfully to get his money from Legend.
"It's sad," he said of his collection efforts. "The only ones making any money are my attorneys." HME