Less than six months after acquiring nine money-losing urgent-care clinics in the Dallas metropolitan area, a group of 16 doctors filed for bankruptcy protection last week, asking for more time to turn the struggling venture around.
Primary Care Management Corp., Dallas, which operates the nine PrimaCare Medical Centers serving some 200,000 patients annually, filed a Chapter 11 petition in U.S. Bankruptcy Court in Dallas to avoid eviction after it failed to pay the past six months' rent to its landlord and former owner, Texas Health Resources.
The doctors' group, which needs a quick infusion of about $2 million to pay its bills, hopes to continue to operate the clinics under bankruptcy protection. A hearing on Primary Care's petition has not been scheduled.
"Our intent is to remain open and to continue to lease the center facilities in order to preserve continuity of patient care in the communities we serve," said Don Dillahunty, D.O., company president. "The filing is our best option to prevent these centers from closing."
The 16 doctors, all longtime former employees of the PrimaCare clinic system, purchased the urgent-care centers last September from THR, a 13-hospital not-for-profit system.
THR said in a written statement that it has "worked closely" with Primary Care during the past six months to try to close the sale, extending terms of a promissory note three times. Still, Primary Care has been unable to meet the terms of the deal, according to the statement, including securing financing for the promissory note and paying fees, interest and lease costs. Primary Care is six months in arrears on rent payments and six months in arrears on lease payments.
Under the agreement, THR sold the clinic operations to Primary Care but retained ownership of the buildings through a leasing arrangement.
Excluding the obligations to THR, Dillahunty said, his group has managed to turn a modest profit since the acquisition by reducing expenses and cutting hours.