Reports: Rural Metro Prepares to File for Bankruptcy

3:54 PM, Aug 2, 2013   |    comments
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BUFFALO, NY - Several financial publications, including The Wall Street Journal, are reporting that Rural Metro, the nation's largest provider of ambulance service, is preparing to file for bankruptcy.

The ambulance company provides service to several Western New York communities and employs over 500 workers in the area. 

While bankruptcy is not a certainty at this point, elected officials are keeping a close eye on any developments.

Even if Rural Metro files for bankruptcy, a leading Buffalo bankruptcy attorney expects it would be under Chapter 11, which would allow it to continue to operate, while it re-organizes its finances with protection from creditors.

"My expectation is you'd probably see service continue, at least in most communities," said William J. Brown, a partner with Phillips Lytle LLP.

Rural metro, which provides service in 22 states, has 90 emergency vehicles which respond to more than 120,000 calls a year in Erie and Niagara counties.

About a quarter of those calls are in the city of Buffalo, where the Common Council just granted an extension to Rural Metro's contract with the city, until the end of the year.

"Questions are going to be raised when you hear they might be filing bankruptcy," said South District Councilmember Christopher Scanlon. "You're going to start to concern yourself with the fact of whether they're able to meet the obligations and the criteria of the contract," Scanlon said.

"From everything that we've heard and seen we don't think that it will impact service ," Mayor Byron Brown told WGRZ-TV. "But obviously we're going to watch it very closely."

Under bankruptcy, Rural Metro could move to reduce its workforce, change existing labor agreements (including one just signed with EMT's in Western New York after a brief strike), or even cancel existing contracts with municipalities.

However, under bankruptcy, any move the company might make would have to be approved by a bankruptcy judge.

In the case of an emergency services provider, any proposal to jettison existing service contracts, would be viewed with extreme caution according to attorney Brown.

"I would think that any judge would be very concerned about the health and safety of those people in the community with respect to ambulance service...the courts have been slow to terminate service because they want to make sure that people have the ability to have their medical situations attended to," he said.

Click on the video player to watch our story from 2 On Your Side Reporter Dave McKinley and Photojournalist Norm Fisher from Eden. Follow Dave on Twitter: @DaveMcKinley2


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