Rural/Metro ambulance co. files for bankruptcy
The company, which provides services in 21 states, expects to continue its operations throughout the reorganization process
The Buffalo News
NEW YORK — "There should be no impact to local operations," a source at Rural/Metro Medical Services said Sunday. A spokesman for the parent company, Rural/Metro Corp., could not be immediately reached.
Planning had begun to provide fill-in ambulance coverage in anticipation of the bankruptcy filing in case Rural/Metro's services were cut back.
Daniel J. Neaverth Jr., Erie County commissioner of emergency services, said Friday, "We would help coordinate with the communities to make sure the calls were covered."
The county geared up for a loss of ambulance service last month when local Rural/Metro emergency medical technicians and paramedics went on strike for eight hours.
At that time, Neaverth noted, the county activated its emergency operations center and notified volunteer fire companies and other ambulance services when coverage was needed.
Rural/Metro, which answers 120,000 calls per year locally, provides ambulance service in Buffalo, Alden, Arcade, Cheektowaga, Concord, East Aurora, Evans, Hamburg, Lackawanna, Lewiston, Lockport, Niagara Falls, Town of Niagara, Springville, West Seneca and Wyoming County, according to its website.
The Associated Press reported Sunday that Rural/Metro Corp. filed for bankruptcy reorganization after reaching a deal with its lenders to cut its debt by about half.
The company, which provides services in 21 states, expects to continue its operations throughout the reorganization process. Lenders have agreed to provide the company $75 million in debtor-in-possession financing to meet its operational needs.
Rural/Metro said it will also receive a cash infusion of $135 million as part of its agreement with lenders and bondholders, which will be filed in U.S. Bankruptcy Court for the District of Delaware.
The company noted that its capital structure was created "under different economic circumstances, and making interest payments on the debt while at the same time investing in operations was more than the company's earnings could support."
Rural/Metro, which is based in Scottsdale, Ariz., expects to complete its restructuring by the fourth quarter of this year. It plans to renegotiate unprofitable contracts and to free up capital to invest in its business.
Private equity firm Warburg Pincus bought Rural/Metro in 2011 for about $438 million.
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