California Bankruptcy Lawyer Blog

According to court records filed last month, one reason that the town of Moffett, Oklahoma filed for Chapter 9 bankruptcy protection was that their town’s former mayor, Billy Yandell, had acquired way too much debt for the town while in office. Yandell passed away last December from heart failure. He had served as town mayor for about a decade.

Recent reports indicate that Yandell accrued more debt than the board had been aware of and without its authority or approval. The town's debts include a number of credit purchases, including more than $4,900 in Lowe’s Commercial Services, $95, 208 for two vehicles, and over $3,200 in Dell Computers. Collection agencies are also owed money by Moffett, including $16,183.18 to AWA Collections.

An audit of the Moffett Police Department may have contributed to the town's lack of funds. It was discovered that more than half of the department's operating budget in 2003 and 2004 came from traffic tickets. The Oklahoma Department of Public Safety has indefinitely banned Moffett Police from engaging in any traffic enforcement over a four-mile strip on U.S. Highway 64.

The town filed their bankruptcy petition on December 20, 2006, and creditors are currently prevented from collecting debts owed by the town. According to court filings, Moffett has $199,396.28 in liabilities and $43,033 in assets.

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In San Pablo, California, Doctors Medical Center has been saved by a $20 million bailout plan that was approved by the California Medical Assistance Commission board last week. Under the details of the financial plan, the hospital, which had filed for bankruptcy, will receive a cash infusion this month and stay open for the near future. The money will be funneled in stages through the state to the West Contra Costa Healthcare District, which owns the hospital. Contra Costa County plans on later getting its money back through the district’s property tax revenue.

The county plans to later get its money back through the district's property tax revenue. The county and healthcare district will work together to set a contract that will delineate management responsibilities for a joint board.

Operating at a $1 million/month loss, the hospital has been forced to cut back on services, reduce pay, and lay off 300 employees. Under the new plan, the hospital is expected to start making a profit by mid-2007.

Doctors Medical Center and the West Contra County Healthcare District had filed for Chapter 9 Bankruptcy at the US Bankruptcy Court in Oakland in October 1, citing $50-$100 million in debts as well as assets.

Continue reading "In California, Bankrupt Doctors Medical Center Is Saved—For Now—With $20 Million Dollar Bailout Plan" »