Diabetes America Files For Chapter 11 Protection in Texas

Diabetes America, Inc., which operates a network of 17 centrally-managed medical clinics that provide comprehensive outpatient medical care, primarily to patients with Type 1, Type 2 and Gestational Diabetes, filed for bankruptcy protection on Tuesday in Houston. The company's clinics are located in Texas and Houston and generate 51,000 patient visits per year. The clinics have generated average monthly revenues of almost $1.3 million to date in 2010.

The company blamed Tuesday's bankruptcy filing on "several financial set-backs, the impact of which still continue to strain the Debtor’s cash flow." These financial problems include long-term lease commitments, including one for a clinic location that the company has failed to open, and an inability to adjust operating expenses at underperforming centers. The company also suffered from billing issues with Medicare, Medicaid, and Aetna. The company filed for bankruptcy protection in hopes of effectuating a plan developed with the assistance of Healthcare Markets Group intended to "restructure its obligations, improve its revenue, discontinue underperforming operations and continue as a going concern."

Key court filings to date include (click on the title of any document for more information or to purchase):

• Chapter 11 Voluntary Petition. Fee Amount $1039. Filed by Diabetes America, Inc.. Appointment of health care ombudsman due by 01/20/2011
• Unsworn Declaration of Bonita L. Groesser (Filed By Diabetes America, Inc. ).(Related document(s): 2 Motion to Extend Time, 4 Motion Re: Chapter 11 First Day Motions, Emergency Motion, Motion to Pay, 5 Motion Re: Chapter 11 First Day Motions, Emergency Motion, Motion for Continuation of Utility Service, 6 Motion to Use Cash Collateral, Motion Re: Chapter 11 First Day Motions, Emergency Motion, 7 Designation of Complex Chapter 11 Bankruptcy Case, 8 Motion Re: Chapter 11 First Day Motions, Emergency Motion, Motion to Pay, 9 Request for Hearing)
• Emergency Motion of the Debtor for Interim and Final Order Authorizing Use of Cash Collateral and Granting Related Relief Filed by Debtor Diabetes America, Inc. Hearing scheduled for 12/22/2010 at 02:15 PM at Houston, Courtroom 404 (MI). (Attachments: # 1 Exhibit A# 2 Exhibit B (Proposed Order))
• Motion to Pay Emergency Motion of Debtor for an Order Authorizing (I) the Debtor to Pay Pre-Petition Wages, Salaries and Employee Benefits and (II) Banks to Honor and Pay Checks Issued to Pay Pre-Petition Wages, Deductions, Withholdings, and Benefits. Objections/Request for Hearing Due in 21 days. Filed by Debtor Diabetes America, Inc. Hearing scheduled for 12/22/2010 at 02:15 PM at Houston, Courtroom 404 (MI). (Attachments: # 1 Exhibit A# 2 Exhibit B (Proposed Order))
• Motion for Continuation of Utility Service and Approval of Adequate Assurance of Payment to Utility Company Under Section 366(b) Emergency Motion for Interim and Final Orders (I) Prohibiting Utilities from Altering, Refusing or Discontinuing Service, (II) Deeming the Utility Companies Adequately Assured of Future Performance; and (III) Establishing Procedures for Determining Requests for Additional Adequate Assurance Filed by Debtor Diabetes America, Inc. Hearing scheduled for 12/22/2010 at 02:15 PM at Houston, Courtroom 404 (MI). (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C (Proposed Order))

For access to all major pleadings filed in this case, please visit http://www.chapter11cases.com/Diabetes-America-Inc_c_13874.html