Showing posts with label Small Smiles Dental Centers Chapter 11 Bankruptcy. Show all posts
Showing posts with label Small Smiles Dental Centers Chapter 11 Bankruptcy. Show all posts

Saturday, March 02, 2013

Small Smiles Dental Centers Bankruptcy–It’s complicated

It’s complicated to liquidate a company operating illegal dental clinics.  As of February 21,2013 there have been 630 various pleadings filed in the bankruptcy case of Small Smiles Dental Centers. The Docket report is dang near 70 pages.  Even it is an interesting read. Hot smile

If you currently work for Small Smiles Dental Centers or have EVER worked for Small Smiles Dental Centers you need to read this carefully. I realized they mass mailed a “Summary” of the Liquidation and Trust Agreement, as well as a “Ballot” but the key word is “summary”. 

This junk company is an albatross that will forever more hang around the neck of every executive, every regional or sub-regional manager and every dentist who ever worked there. You will constantly be looking over your shoulder for the next 10 years or longer. 

The last time I took the bar exam was…  uh… NEVER, so read it and draw your own conclusions.  

This the the current PROPOSED Plan of Reorganization and not approved by any means as of yet.  There are objections by their malpractice carrier on file, and that’s where the dentists come into play even more I suspect.

[Now, if I found myself in the middle of a malpractice lawsuit and being represented by an attorney assigned to me by a malpractice insurance company who didn’t want to cover claims because they got hoodwinked by some slick willy system scammers, I’m not sure I’d feel that particular attorney had my best interest in mind.  Think about it.]

Proposed Second Amended Joint Plan of Reorganization Doc 594 01-11-2013

I particularly enjoyed this section on page 17.

4.17(h) Claims Against Former Affiliates. Each holder of a Class 5(a) Claim will retain any and all claims and legal rights such holder may have against any of Danny DeRose, Edward DeRose, Michael DeRose, William Mueller, or Adolph Padula. All holder of Class 5(a) Claims will be entitled to initiate and prosecute any such claim against any or all of Danny DeRose, Edward DeRose, Michael DeRose, William Mueller, or Adolph Padula without restriction in the tort system. To the extent the automatic stay in these Chapter 11 Cases or any other limitation imposed by these Chapter 11 Cases would limit any such action, such automatic stay or limitation will be lifted thirty (30) days after the Effective Date of the Plan

Summary of Liquidation and Trust Agreement

Church Street Health Management Court Docket, February 21,2013

Saturday, February 23, 2013

Oh where, oh where has Small Smiles gone, oh where, oh where can it be…

smallsmilesFebruary is “National Children’s Oral Health Month”. Normally Small Smiles Dental Centers lead dentists (or fake owner dentists) slither from under their rock and hit local morning TV talk shows, claiming they are having free services that very morning for a couple of hours. So far, I’ve not seen hide nor hair of them in 2013. Kool Smiles Dental centers at least announced they gave away toothbrushes this year. (Geez, I hope they weren’t those chemical-laden ones from China that leave blisters in your mouth.)

Small Smiles “free services day” were a sneaky ploy. The dentists would appear on local talk shows about 6 AM announcing they were having free services that morning; from 9AM-11AM for example. They would invite the public, telling them they needed to call for an appointment; failing to mentioning the schedule was already packed tight as sardines – as they were everyday.

It was last year about this time they were preparing documents to file bankruptcy in Nashville’s Federal Court and closing several clinics (updates on that coming soon). By June the OIG forced them to divest in at least one clinic; personally I think it was more than one, Manassas, Virginia clinic for sure. (Let’s just say, whoever took over Manassas, also took the Pueblo, Colorado clinic as well. See: Violations of Corporate Integrity Agreement Triggers Divestiture Action by HHS OIG.

“It is clear that the defendants’ actions constituted more than just malpractice.” –Judge John Cherundo, Onondaga County Superior Court

By August 2012, Small Smiles Dental Centers were taking serious hits in the malpractice cases file against them. In 2011, families of at least 75 children had filed lawsuits in New York against the Small Smiles Dental Centers. Judge John C. Cherundo denied the companies request to dismiss the cases saying, “This intentional misconduct was part of the of the alleged scheme to generate revenue as quickly as possible”. 

Tuesday, February 21, 2012

Documents Related to Small Smiles Dental Center’s Chapter 11 Bankruptcy

 

Some of the highlights of the Top 20 Creditors are:

Creditor Amount Owed
US Govt toward $24 settlement $10,714,233.36

Michael G. Lindley

$859,955.27
Alfred J. Smith $674,545.81
Henry Schein, Inc $568,478.11
Shary Retail, Inc, $542,125.00
Seeway Asst Mngt $326,162.00
Shearman and Sterling, LLP $310,700.20
   
   
   

So, has this captured the attention of the other Interstate children Medicaid dental mills?  You bet!  Visitors to this site today come from several other corporate mills, including Ocean Dental out of Stillwater, OK. 

Comment MDavis:

Yes, the Affidavit of Martin McGahan is particularly troubling in its veracity, or lack there of.

"In many cases, SSHC or CSHM has guaranteed the dental centers’ performance under those leases or assumed obligations under existing guarantees." That is the action of an OWNER, not a distanced management service organization (MSO).


On page 2, "The dental centers are owned by licensed dentists." Sorry, that simply doesn't pass the smell test either. These bogus figurehead dentists were paid an addition sum, to pose as "Owners" for State Regulatory Boards. We also realize from Case Law in Orthodontic Centers of America, Inc No. 07-30430 (Fifth Circuit (Texas) 12-30-2008) that the Court found these typical management services (from MSOs) constituted the practice of dentistry.


On page 3, "The Debtors do not own any real property." Even if the real estate is leased, the dental equipment has a tangible value, and dental equipment doesn't come cheap. This dental equipment is no longer owned by the former owner "Old FORBA" (the DeRose, et.al. group). The bogus "Lead Dentists" don't own it. It's an asset of value to Creditors.


On page 4, there is mention of Shari'ah Law. This was to conform w/ the investment of Arcapita Bank. Well guess what? Under Shari'ah Codes one can't make loans, and generate profits though interest payments. An investment banking firm, i.e. Arcapita Bank, may buy into a business, then later sell off the business, hopefully generating a profit. This makes the Party buying in, a Partner in the business. They share risks, liabilities, & potential profits. So, we're now talking about potential fiscal liabilities of Partner, Arcapita Bank, and not simply CSHM.

Page 4 & 5 get more into the "dance" of compliance w/ Shari'ah Codes. Ever read the Annual Report of Arcapita Bank, & the pages directed to their strict compliance w/ Shari'ah Codes? It certainly looks like they go to lengths, to avoid issues which they seemingly hold highly ethical. Does it break w/ Shari'ah Code to be involved in business, which harms small children & defrauds the taxpayer? Heck, just read the Release of the US Justice Department, w/ the $24 Mil Settlement.

Page 7 gets into who they want to establish as First Lien. In other words, CSHM goes bankrupt, and the real owners, the investment bankers of Arcapita Bank, The Carlyle Group, and American Capital are first in line to collect. That doesn't pass the smell test either. Do you believe a Bankruptcy Court would buy into that? Representatives of these Investment Companies openly sat & served on the Board of CSHM. They were involved in business decision making, or were positioned to do so, even if they attempt to pass the responsibility.


Page 10 "The Company is party to a Management Services Agreement (“MSA”) with each dental center for which the Company provides management services (collectively the“Dental Centers”). Pursuant to each MSA, the Company provides the Dental Centers with management services such as billing and collection, bookkeeping, accounting and tax services,dentist and staff recruitment, payroll services, human resources, information technology support,equipment and supplies procurement, leasing, repairs and capital improvements, and assistance with compliance, legal issues, governmental affairs, and licensing and permitting. In exchange for providing these services to the Dental Centers, the Company receives a management fee from which it funds its operations." This is all the activity of Practice of Dentistry, and OWNER of a Dental Practice. “Dental Centers”). Pursuant to each MSA, the Company provides the Dental Centers with management services such as billing and collection, bookkeeping, accounting and tax services, dentist and staff recruitment, payroll services, human resources, information technology support,equipment and supplies procurement, leasing, repairs and capital improvements, and assistance with compliance, legal issues, governmental affairs, and licensing and permitting. In exchange f r providing these services to the Dental Centers, the Company receives a management fee from which it funds its operations." This is all the activity of Practice of Dentistry, and OWNER of a Dental Practice. They spell it out, in attempt to circumvent reality.
More later.

The attorneys will have fun over this nonsense.
Michael W Davis, DDS

 

Comment Debbie:

Just think, there is 35 more pages of this BS for this document. Ole Martin failed to mention, at least so far as I’ve gotten through this, that it’s management services are in exchange for 100% of the profits, and we give the owners of the clinics a flat fee of $1250 for each clinic!  It’s that just a upside down and backassward way of saying, we own and operate dental centers and the dentists are our employees! Guess, the word management has taken on an all new meaning….  No, I just mange that car in the driveway for the bank.  Yep, that works for me if any liability issues were to come up.  LOL

Comment: MDavis

If I were a Creditor, I'd also do serious background check into real estate assets, especially the early clinics established in CO, NM, & AZ, by the DeRoses. I would not assume, at face value, all the real estate is leased. It may be leased through yet another dummy corporation, of The Carlyle Group, Arcapita Bank, & American Capital.

Yes, this takes the effort of going to County Records & Deeds. Anyone familiar w/ this blog will soon recognize certain names & titles, to have an eye open for.
In my time, I've met certain Judges, who've presided over Federal Bankruptcy Court. IMHO- they won't broker liars or BS. And, they've seen every scheme in the book. They've got a HUGE case workload, and have no time for manipulators & cheats.

The Martin McGahan Affidavit is a HUGE risk, by The Carlyle Group, Arcapita Group, & American Capital. If right from the get-go, these parties appear the schemers, which they are, the Judge is likely to get POed. And believe me, one doesn't want to be on the wrong side of a POed Federal Judge.
Michael W Davis, DDS