Rural/Metro files for bankruptcy

Rural/Metro files for bankruptcy, says emergency services will not be affected

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"Their contract with Knox County contains provisions in the event they are unable to fulfill their obligations," said Knox County mayor Burchett. "If their obligations are not met, Knox County will take appropriate action." "Their contract with Knox County contains provisions in the event they are unable to fulfill their obligations," said Knox County mayor Burchett. "If their obligations are not met, Knox County will take appropriate action."
"We had no idea at all," said Knox County Commissioner Dr. Richard Briggs. "We had no idea at all," said Knox County Commissioner Dr. Richard Briggs.

KNOXVILLE (WATE) - Rural/Metro Corp., which provides ambulance, fire and other emergency services for several counties in East Tennessee, announced Monday it has filed for bankruptcy.

The debt restructuring under a Chapter 11 reorganization is not expected to affect services provided by Rural/Metro of East Tennessee, the company said.

The bankruptcy petitions were filed Sunday in the U.S. Bankruptcy Court for the District of Delaware.

The company provides firefighters, paramedics, and related 911 support services in Knox, Blount, Loudon, Franklin and Polk counties of East and Middle Tennessee.

Knox County commissioners approved in December a five-year contract with Rural/Metro.

The contract includes two, five-year optional extensions.

Knox County mayor Tim Burchett says Rural/Metro has assured him that services in Knox County will continue as normal.

"All operations in East Tennessee will continue as usual," said Rural/Metro of East Tennessee Division General Manager Rob Webb in a quote provided Monday. "Rural/Metro will continue to meet all of our contractual obligations, including maintaining excellent medical and fire protection services to the citizens we serve here."

"Their contract with Knox County contains provisions in the event they are unable to fulfill their obligations," said Burchett. "If their obligations are not met, Knox County will take appropriate action."

Knox County Commissioners who approved that new Rural/Metro contract say they were unaware the company was in debt.

"We had no idea at all," said Knox County Commissioner Dr. Richard Briggs.

Briggs says while the company has provided exemplary emergency service to Knox county for more than 25 years, this bankruptcy is cause for concern.

"In spite of the reassurances Rural/Metro has given us, we're obviously very concerned about public safety aspect of this. Are the ambulances going to be able to provide the same services they have always done in a very excellent way in the past," said Briggs.

He says the county is going to be closely watching Rural/Metro's debt restructuring process to ensure the safety of local citizens stays protected.

"It'll be a watch and wait and monitor to be sure our citizens are getting the services and protection they need from Rural Metro according to the contract that we have with them," said Briggs.

In the filing for Chapter 11 restricting the company said it has received a commitment for $75 million in debtor-in-possession financing from some of the company's secured lenders to maintain ongoing operations, and meet operational and restructuring needs.

Bondholders have committed to invest another $135 million in new equity in the fourth quarter of this year.

The company also provides services in 20 other states.

According to a statement released Monday by Rural/Metro, the financial restructuring "will help ensure that Rural/Metro can continue to invest in its business, meet the needs of customers, patients and communities and further improve service. Operations are expected to continue as normal throughout the process."

Rural/Metro is based in Scottsdale, Ariz.

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