Santa Clara County (Calif.) executives are concerned about emergency medical services provider Rural/Metro Corp.'s recent filing for Chapter 11 bankruptcy protection. Santa Clara County has a contract with the ambulance company for its crucial services, whose quality the county has increasingly called into question. The county is concerned about the large debt ratio incurred after the company was bought out by private equity firm Warburg Pincus, and has experienced a decrease in performance and emergency response times.

The City of Syracuse (N.Y.) also contracts with Rural/Metro and has sought assurance that emergency services will be unaffected by the restructuring of the debt. Bankruptcy "gives the company the upper hand in dealing with anxious customers" such as Syracuse and Santa Clara County.

"Bankruptcy probably staves off any immediate termination of an agreement. It gives them a little bit of breathing room," said David L. Pollack, a Philadelphia-based partner in Ballard Spahr's Bankruptcy, Reorganization and Capital Recovery Group. He added, "If there are in fact some dire needs, the cities may be able to get relief from the bankruptcy court. Generally, the health of the public is paramount in a bankruptcy."

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Bankruptcy, Reorganization and Capital Recovery