Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Scooter Store Seeks Bankruptcy Protection After Federal Raid Uncovers Fraud
Author: Joel R. Glucksman
Date: April 30, 2013
Key Contacts
Back
The Scooter Store Holdings, a popular company that sells motorized scooters and wheelchairs throughout the U.S., was forced to file for bankruptcy protection under Chapter 11 of the Bankruptcy Code after a federal raid proved the company was guilty of fraud.
In March, the Federal Bureau of Investigation, the Office of the Inspector General, the U.S. Department of Health and the Texas Attorney General’s office raided the company’s Texas headquarters and discovered that thousands of seniors who lacked a medical need for the company’s products had obtained a motorized scooter or wheelchair, in part due to the company’s aggressive harassment of medical clinics to prescribe its products, according to ABC World News.
In addition to the raid, which prompted the company to suspend its operations, the Scooter Store is also facing claims from Centers for Medicare and Medicaid Services (CMS). The agency is seeking to collect $19.5 million, an amount the company agreed to pay following another investigation that revealed Scooter Store overbilled Medicare and Medicaid by tens of millions of dollars between 2009 and 2011.
“Historical overhangs coupled with an increasingly complex regulatory environment and mounting economic pressure in the health-care sector have significantly impacted the company’s ability to operate under its current model,” said CEO Martin Landon, according to Bloomberg.
The company listed assets between $1 million and $10 million and liabilities of between $50 million and $100 million. Following the government raid and its decision to file for bankruptcy protection, the Scooter Store has been forced to reduce its workforce from 2,400 to 300 employees. While the company acknowledges that a series of federal investigations have “imposed significant financial burdens” and damaged its reputation, it said it is fully cooperating with authorities in both criminal and civil lawsuits.
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
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Author: Donald M. Pepe
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
Author: Jay McDaniel
The Legal Implications of Signing a Triple Net Lease
A triple net lease is a commercial lease in which the tenant pays the property’s real estate taxes, insurance, and maintenance costs, known as the three nets, in addition to base rent. They are most often used in freestanding retail and office buildings and in large single-tenant industrial properties, with terms that typically run 10 […]
Author: Donald M. Pepe
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
Types of Business Law Services Companies Actually Use
Business law services are legal services that help companies form, operate, transact, protect assets, manage risk, and resolve disputes. The phrase can sound broad because it is broad. A company may need help with entity formation one month, contract review the next, a commercial lease after that, and a business dispute later in the year. […]
Author: Scarinci Hollenbeck, LLC
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.