According to documents filed with the U.S. Bankruptcy Court, privately-held Capstone Pediatrics, PLLC (pka Centennial Pediatrics) filed for Chapter 11 protection in the Middle District of Tennessee. The healthcare Company, based in Nashville, TN, is a pediatric and adolescent center offering comprehensive and family-friendly preventative and primary care at 11 locations throughout Middle Tennessee. The Company employs 25 board certified pediatricians and 25 certified nurse practitioners and has between 40,000 and 50,000 patients. In 2014, it experienced gross revenues of $24,858,435.
On October 31, 2013, the Company acquired the assets of a pediatric practice that was being dissolved after its owner was convicted of health care fraud. Upon acquisition the Company realized it paid much above market value for the assets it received in exchange. According to Court-filed documents, what it did receive was “fraught with compliance issues, IT issues, manpower issues, and oppressive contracts with rental rates in excess of fair market value.”
Furthermore the Company engaged in a vaccine purchase program that resulted in overpaying for the supplies. The Company concluded that its profitability and sustainability require it to reduce its number of operating locations. This is expected to reduce revenue, but the accompanying reduction in expenses will result in a financially stronger and more viable business. The Company has been working for a number of months to streamline its operations and prepare for a restructuring.
The Company’s Chapter 11 petition, submitted by C.F.O. Gary G. Griffieth, indicates total assets between $1 and $10 million and liabilities in the $10 and $50 million range. The list of creditors holding the largest unsecured claims includes Eddie Hamilton: $3,357,178 (for the purchase of the practice), the IRS: $1,277,270 and PSS Physician Sales & Service Inc.: $304,517.
The Company will be represented by Griffin S. Dunham and Elliott Warner Jones of Emerge Law PLC throughout the bankruptcy proceedings.
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