Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Baltimore Behavioral Health Files For Bankruptcy Protection
Author: Joel R. Glucksman
Date: January 17, 2013
Key Contacts
Back
Filing for Bankruptcy Protection
A mental health rehabilitation and addiction facility in Baltimore has filed for Chapter 11 bankruptcy protection under bankruptcy law as a result of heavy debt to creditors and to the Internal Revenue Service.
Baltimore Behavioral Health listed more than $5.5 million in liabilities during its filing, noting that it also owed roughly $4 million in payroll taxes to the IRS. Failure to turn over payroll taxes withheld from employees’ wages can generate significant personal liability for the controlling principals of a business.
The debtor listed assets of less than $500,000 in its filing. The bankruptcy filing comes after years of both legal and financial issues, ranging from investigations into payroll taxes to questionable treatment practices. Shortfalls in its retirement plan also led to a federal investigation in 2011, especially after the high salaries of top executives were exposed.
The group’s CEO, Terry Brown, said the center will remain open and functional during its bankruptcy proceedings, telling the Baltimore Sun that “there’s a need for us to be here.”
Brown also noted that issues with management have largely contributed to the center’s financial woes. A 2010 investigation and testimony from patients, doctors and employees found that the nonprofit was diagnosing some patient with mental illness, rather than legitimate issues. The misdiagnoses allowed the center to provide unnecessary care which resulted in higher and more steady profits for the company.
As a result, many of the family members that founded the organization and sat on the board of directors saw their voting privileges taken away, and many were removed altogether from management. Although the group is now under new management, it is still suffering from financial disputes, lawsuits brought on my employees and negative stigma. While Brown says bankruptcy will allow the BBH to get back on track and improve its finances, he has not given a timeline of when it expects to emerge from proceedings.
If you face bankruptcy issues in your business or would like to discuss the topic above, please call me, Joel Glucksman.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Dissolving Your Business: Essential Legal Steps to Protect Your Interests
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
The Role of Corporate Restructuring in Mergers & Acquisitions
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
Crypto Compliance: A Comprehensive Guide
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.