Chapter 7 Bankruptcy for Allcare Dental Management
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Chapter 7 Bankruptcy for Allcare Dental Management

December 7, 2011

By: Brenna Working

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Reports from the Associated Press say that New York-based chain Allcare Dental Management has listed debts of $3.6 million and $0 in assets in its Chapter 7 bankruptcy papers. After unexpectedly closing its 13 chain locations last year, Allcare reportedly announced that it would enter bankruptcy protection.

It plans to liquidate its operations, sources note, though that might prove unfruitful to creditors and jilted patients alike. Apparently, the company’s closure was so unexpected in part because it failed to warn its clients about its imminent bankruptcy—because its phone and Internet service had already been pulled for failure to pay bills.

In addition to its inability to pay its utilities, it seems Allcare owns no real estate and has no cash on hand. In response to the group’s abrupt cessation of service, a number of patients have reportedly sued Allcare.

Reports indicate that Allcare’s 341 Meeting (also called the Meeting of the Creditors) will take place on December 12, 2011. At this meeting, creditors may attend and question Allcare representatives about the state of the company’s finances and about any claims it made on its bankruptcy filing papers.

Because it filed its case under Chapter 7 of the U.S. Bankruptcy Code, Allcare Dental Management will be liquidating, rather than reorganizing its dental operations. Proceeds from the liquidation of Allcare’s assets will be distributed among creditors, according to a priority schedule determined by the bankruptcy court.

However, it is unclear at this time whether or not Allcare will be able to collect sufficient assets to repay creditors at all. Sources note that Allcare representatives are currently in the process of collecting and attempting to collect payments due from patients and insurance companies.

During bankruptcy proceedings earlier this month, it seems that the judge overseeing the case instructed creditors not to submit any claims, as the Allcare estate includes $0 in assets. Any claims would thus be irrelevant. The judge has not yet set a deadline for claims to be submitted; such a date will likely depend on Allcare’s ability to collect money from those who owe it.

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