Failed NY dental chain lists no assets, $3.6M debt

AP News
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Posted: Nov 29, 2011 5:54 PM
Failed NY dental chain lists no assets, $3.6M debt

A New York dental chain that closed offices in 13 states without warning late last year listed no assets and liabilities of $3.6 million in a bankruptcy filing posted online Tuesday.

Allcare Dental Management Inc. filed for Chapter 7 liquidation this month in U.S. Bankruptcy Court in Buffalo. The filing shows the suburban Buffalo-based company owns no real estate and has no cash on hand.

A notice to former patients said Allcare and 14 related companies have been liquidating assets since going out of business and attempting to collect money owed to them from patients and insurance companies. That will continue in Chapter 7, the notice said.

Allcare abruptly shut down all its offices at the end of 2010, saying it had run out of money and was unable to obtain enough new financing or equity investments to stay in business.

The closing stunned patients who learned of the situation from notices posted on the doors when they arrived for appointments. Dental records and unfinished work, some of which patients had paid for in advance, eventually were transferred to other dentists.

Allcare said at the time it couldn't warn patients of the closing because its phone and computer service had been shut down.

Patients in several states have sued. The affected states include Illinois, Iowa, Massachusetts, Michigan, New Hampshire, New York, North Dakota, Nebraska, Ohio, Pennsylvania, Tennessee, West Virginia and Wisconsin.

Chief U.S. Bankruptcy Judge Carl Bucki has instructed potential creditors in the bankruptcy case to refrain for the time being from filing claims, Allcare said.

"He has directed that if it is determined at some future date that sufficient assets have been collected to permit a distribution to creditors, then notice will be sent" to creditors, the posting to patients said.

Additional details about the bankruptcy filing are expected at a creditors' meeting scheduled for Dec. 12.

Incorporated in 2001, Allcare at one time had 58 locations but had closed some before going out of business. At the time of the final shutdown, it was believed that 38 offices were operating.

Among the largest creditors listed in the initial filing is Velocity Network Inc. of Erie, Pa., which provided Internet services to Allcare. The company in March was awarded a $1.3 million default judgment after suing Allcare in Erie County, Pa., in January for unpaid services. Velocity had claimed that Allcare stopped making timely payments after reaching a three-year agreement with the service provider in July 2009.

Smaller creditors include several former landlords.