Earlier this week the Rural/Metro Corporation (a large provider of private ambulance in Arizona) announced that it had filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of Delaware. The Company announced that the bankruptcy action will allow the company to… “significantly reduce its debt, renegotiate unprofitable contracts and free up capital for investments to strengthen its business and further improve patient care”. The statement prepared by Rural Metro said that the “agreement reached includes a significant cash investment from the Company’s bondholders to comprehensively address the Company’s capital expenditure needs and ensure the Company continues to provide industry-leading emergency services to its customers. Rural/Metro anticipates completing its restructuring in the fourth quarter of 2013”.
The week before last, when Rural Metro announced that they would suspend payment of a Bond, I sent them a detailed letter asking for a host of financial and operational information about the company in order to determine whether the company still meets our statutory mandate (ARS 36-2201) and rules requirement (AAC R9-25-912(A)) that they be “Fit and Proper” to run an ambulance service in Arizona… which means that they must have the expertise, integrity, fiscal competence and resources to provide ambulance service. I gave the company until the end of August to provide us with the required information. I can assure you that we’ll be going over the fine details in their response- as the particulars will be a big factor in what we decide to do next.