Rural/Metro files Chapter 11

Jerome Stocks Jerome Stocks 4 Comments

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(Reuters) – Ambulance operator Rural/Metro Corp… 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.

So, this is the same company who currently provides ambulance / paramedic service to the city of San Diego as well as the CSA-17, serving a lot of North County. The CSA-17 contract is up for bid now, and no doubt this bankrupt vendor will attempt to keep its contract by bidding for it. Interestingly, the City of San Diego contract should’ve already gone out for bid, but earlier this year embattled Mayor Bob Filner gave a no-bid extension of up to 2 years to Rural/Metro for service to the city. That extension must’ve been worth millions of dollars, but there has been little investigation re the negotiations that brought that to fruition.

Is it prudent for the County of San Diego be entertaining a potential contract bid from their current vendor who is now in Chapter 11 Bankruptcy? Inquiring minds want to know!

See the Chicago Tribune article link below for further details:

http://www.chicagotribune.com/business/sns-rt-us-ruralmetro-bankruptcy-20130804,0,7128679.story

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Comments 4

  1. If they were to win the CSA 17 contract extension, would it be subject to being renegotiated in bankruptcy in a couple months?
    Is the city of San Diego contract extension at risk similarly?
    Lawyers? Opine please!

  2. MAYOR BOB FILNER

    CITY OF SAN DIEGO
     
    Mayor Bob Filner responds to Rural Metro’s filing for bankruptcy on

    Sunday, August 4, 2013.

    (San Diego) – “The contract with Rural Metro is intended to provide San Diegans with the safety and security they expect and deserve when faced with medical emergencies.  Rural Metro’s recently filed bankruptcy petition has raised in the minds of many the question of whether Rural Metro can or will provide the level of emergency services San Diegans deserve and expect.

     “I asked that same question.  Consequently, I have directed our Chief Operating Officer to once again communicate the exact terms of our agreement with Rural Metro to the firm’s owners and managers. I have also directed our lead contract manager and my senior staff to meet with Rural Metro representatives this week to thoroughly review the company’s plan for meeting our contract terms as they undergo their financial reorganization.  To date, the company has provided all appropriate assurances that it is prepared to meet and fulfill the contract terms.

     “As always, I am committed to ensuring that San Diegans continue to receive the highest level of emergency services possible. My staff will continue to monitor and manage the Rural Metro contract to the benefit of all our citizens.”

  3. Dear T.A.
    While I appreciate the Mayor’s missive, especially given that he’s not in his office this week or next, it really avoids confronting the essence of bankruptcy, which is renegotiating or eviscerating existing contracts and other long term or past due obligations.

    It’s my fervent hope that any needed emergency response services will not be degraded, but in reality I doubt any assurances received from the local Rural/Metro folks to the local city staff will weigh heavily on the mind of the bankruptcy judge, or the decisions they make.
    But it’s nice to know the Mayor is a Rostra reader!

  4. Of course, don’t mistake T.A.’s posting of the Mayor’s release as an opinion from the Rostra admin team as to whether his statement confronts the essence of bankruptcy. But, it is additional information on the matter. As to whether he reads Rostra or not, his counselors may not allow it in the next couple of weeks (he does need to get better, after all), so Mr. Stocks may want to express his opinion to his nanny and erstwhile attorney while he’s away, Lee Burdick.

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