Allied Health Care Service Chapter 7 BK
Key Equipment Finance, Superior, Colorado, Kingsbridge Holding, Lake Forest, Illinois, Republic Bank, Oakbrook, Illinois filed Involuntary Bankruptcy Chapter 7 against Allied Health Care Services, Orange, New Jersey for 7,911,744. A hearing is scheduled for September 28, 2010, Courtroom 3A, MLK, Jr. Federal Building, Newark, New Jersey at 10:00.
All creditors should get their claims in. Allied will be listing all its debts. Those not on the list of claims will be joining, and the FDIC will be visiting more small banks with bad news to raise more capital.
Due to this filing, Leasing News can now bring forth information that the FBI is looking into Medicaid and Insurance alleged aspect, and as important, Sun National Bank, Vineland, New Jersey knew about the Allied and George K. Schwartz "problem" in September, 2009, as important, they have allegedly been waiting for 90 days to pass to hopefully circumvent the preference issue. Looks like they didn’t make it.
The following has been obtained from several bank credit officers who were referred the $14 million ($15 million today) loan from Sun National and others who were contacted. Neither Thomas X. Geisel, president/ceo of the bank has responded, nor Noel R. Devine, Director of Marketing nor those directly involved in the bank loan have spoken to Leasing News. The information has come from reliable and highly reliable sources over the last several months, which Leasing News has verified.
Thomas X. Geisel
Sun lost $17.1 million in 2009, compared to a $14.9 million profit in 2008. In April 2010, the bank signed an agreement with the OCC committing it to boost its capital base and revise its commercial credit, which it did, announcing an infusion of $100 million July 7th. The money came from billionaire Wilbur Ross, who now owns a 25 percent interest in the bank, as he invested $50 million, and the majority stock holders of the bank, the Brown family who contributed $30 million; other investors contributed $20 million.
Allegedly Charles K. Schwartz came to Sun National for a $6 million loan last August. He had the $14 million loan from the bank on the books for over five years, had made payments on time, and each review was approved. Due to the new amount, the senior credit officer got involved. Sun National at the time was approaching a loss for the year, fearful of the FDIC, and good reason as they eventually got a cease and desist order.
Last September, the senior credit officer allegedly hit the roof, turned the deal down for $6 million, seeing all the UCC's, no audited statements, questioned the equipment, the vendor, the entire situation. Reportedly people were fired. Later he was allegedly fired, too. The bank then secured a lien on all Schwartz personal property, except his personal residence, Leasing News was told. The bank eventually put the loan in "work out" and had surrounding banks looking at the credit package.
According to the bank credit officers who saw the package, they were told about the "workout" and liens, but nothing else. Several figured out the equipment suspected ruse, one actually pulling all ( he told me “all”) the UCC’s and called the manufacturer to match serial numbers from many of the UCC’s (none matched, he said.)
Leasing company credit checks with Sun National Bank reportedly did not disclose the "work out" or turn down of additional credit or security held by Sun National Bank. None of those who granted credit after September that Leasing News spoke to mentioned the “work out” or security held by Sun National. Later banks holding leases were told by Charles K. Schwartz the reason for slowness was the changing of banks, as well as late payments from Medicare, Leasing News was told. The personal financial statements Schwartz was using was before the liens, so they were not noted, nor all the real estate he owned, it appears. The lease holders were evidently oblivious to what was occurring, even despite stories in Leasing News.
Schwartz is a thoroughbred horse aficionado, active in it, and his goal was to buy a new stable, which he finally did in April, 2010 for almost $14 million. During this period, he had at least six brokerage companies sending out his package to lease more LifeCare LPV 120 from Donner Medical equipment. Leasing News had noted in earlier stories the $6 million total, information from several brokers, who had complete packages, including the vendor personal financial statements and tax returns.
Federal Bank Filings (from Pacer)
August 19---Stonebridge Bank, Exton, Pennsylvania sues Allied Health Care Services for $235,610 plus interest, late fees, attorney, and court costs.
August 18---First Premier Bank, Sioux City, South Dakota sues Allied Health Care Services, Orange, New Jersey and Charles K. Schwartz for $1,023,225 plus interest, late fees, attorney, and court costs. Contract discounted by First Premier, Edina, Minnesota, one of many in these cases.
August 14---De Lage Landen Financial Services, Wayne, Pennsylvania, sues Allied Health Care Services, Orange, New Jersey and Charles K. Schwartz $1,425,000 plus interest, late fees, attorney fees, court costs and applicable taxes in Pennsylvania. This is the first thorough complaint, in my opinion, as it brings up the serial numbers of the equipment, plus adds the vendor Donner Medical and its owner Bruce Donner to the complaint. Note: no personal guarantee, therefore Charles K. Schwartz not named.
Attorney Matthew Faranda-Diedrich , in the addition to Allied and August 13--M&L Marshal & Isley Bank, Milwaukee, Wisconsin sues Allied Health Care Services, Orange, New Jersey and Charles K. Schwartz for $642,969.42 plus all expenses including interest, late fees, attorney fees, court costs. Contract discounted by First Premier, Edina, Minnesota, one of many in these cases.
August 12---First Security Bank, Canby Minnesota sues Allied Health Care Services, Orange, New Jersey and Charles K. Schwartz for $241,240 plus interest, late fees, attorney fees, court costs and applicable taxes. Contract discounted by First Premier, Edina, Minnesota, one of many in these cases.
August 12--Drake Bank, St. Paul, Minnesota sues Allied Health Care Services, Orange, New Jersey and Charles K. Schwartz $270,053.79 plus interest, late fees, attorney fees, court costs and applicable taxes. Contract discounted by First Premier, Edina, Minnesota, one of many in these cases.
August 10---United Western Bank, Denver, Colorado sues Allied Health Care Services, Orange, New Jersey and Charles K. Schwartz for $167,146. Contract discounted by Global Vantage, Newport Beach, California.
August 4-- Texas Capital Bank, Dallas, Texas, filed in the District of New Jersey, Newark, a complaint for $608,602. Asks for Replevin. Not served.
August 2-- Franklin National Bank of Minneapolis, 525 Washington Avenue North, Minneapolis, Minnesota (First Premier Capital lease) for $216,000. First Premier discounted lease. ---Not served
July 30-- AEL Financial et. al. for $661,000 ( AEL Financial, 600 North Buffalo Grove Road, Buffalo Grove, Illinois; M2Lease Funds, 175 N. Patrick Boulevard, Brookfield, Wisconsin; Cedar Rapids Bank, 500 1st Avenue NE, Cedar Rapids, Iowa---not served
July 19th-- National Bank, Bettendorf, Iowa as the holder of three leases by First Premier Capital, Edina, Minnesota for 50 LifeCare Respirators costing $250,000 each. The demand is for $800,000, First Premier Bank discount. Attorney Dennis Lenard responded August 10th, denying charges.
July 13th-- ABCO Leasing, Bothell, Washington filed against Allied Health Care Services, Orange, New Jersey as well as the guarantor Charles K. Schwartz. It regards two leases for a total of $400,000. Attorney Dennis Lenard responded August 4th, denying charges
July 12th-- Onset Financial, South Jordan, Utah and CW Onset, a Utah limited company, on July 12, 2010 filed a $9,798,000. Allied & Schwartz served, filed August 16, restricted.
July 9th-- Crossroad Bank, Wabash, Indiana, formerly known as First Federal Savings Bank of Wabash filed for $144,788.20 plus attorney and court costs regarding respirators. Charles K. Schwartz served July 27, 2010. Asks for a Replevin. First Federal discount lease. No response to date from attorney.
June 18th-- Commonwealth Capital Corporation filed 18 for $4,224,543.02 against the corporation and $1,792,893.82 against the personal guarantee of Charles K. Schwartz, "plus attorneys fees, costs, and interest, as well as all other relieve which this court deems just;" ACC Capital discount. July 27, Scheduling Conference for 8/31/2010
May 18-- MinnWest Capital Corporation, Minnetonka, Minnesota, (subsidiary of MinnWest Bank Metro) $2,070,690 suit against Allied as well as the Charles Schwartz, president of the company, as personal guarantor to the corporation. August 5: CLERK'S QUALITY CONTROL MESSAGE - Please disregard Doc. #'s 13 & 14 [ANSWER TO CMP.] fld. by D. LENARD on 8/4/10. They were inadvertently fld. in wrong case. [SEE CIV. 10-3558] (DD, ) (Entered: 08/05/2010) ORDER ON ORAL MOTION: indicating a schedule for filing dispositive motions shall be addressed at the initial scheduling conference on 10/26/10 at 12:00 p.m. Signed by Magistrate Judge Claire C. Cecchi on 7/30/10. (sr, ) (Entered: 07/30/2010)
May 3-- Kingsbridge Holding, LLC, Lake Forrest, Illinois, was first with a suit against Allied Health Care Services for $1,051,207.74 plus attorney and court fees. ACC Capital discounted lease.--joint discovery plan prior to joint conference September 8th, Newark.
(Information from PACER.)
$15 million line plus reportedly in “work out” at Sun National Bank, Vineland, New Jersey
(Municipal actions, four to date):
American Bank FSB, Bethesda, MD
Allied Chapter 7 certificate of notice:
Allied Chapter 7 filing record:
Previous Stories (also contain the complaints and exhibits):
Archive, August 20, 2007
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