Indiana, Quest Accuse Breached Agency Of Not Cooperating, Seek Liquidation

As the Attorney General of Indiana seeks to force the parent company of American Medical Collection Agency into liquidation, one of the agency’s former clients is accusing the bankrupt company of an “inability or unwillingness to provide the cooperation and transparency” it needs to fully investigate what happened.

Curtis Hill, Indiana’s Attorney General, filed a motion last week to convert the Chapter 11 bankruptcy filing of Retrieval-Masters Credit Bureau into a Chapter 7 filing, which would force the company to liquidate its assets to pay off its current creditors. A Chapter 11 filing allows the company to try and reorganize itself to settle its unpaid debts with the company’s creditors.

The company, which was “grossly mismanaged” prior to its filing, is not capable of reorganizing itself and re-emerging from bankruptcy protection, the state of Indiana argued in its motion, which makes a Chapter 7 filing more practical.

“Given the cost of continued operation, the basic expenses associated with continued security needs, the concern about the loss of data, and the unwillingness of Debtor to turn over even the most basic of documentation, it is in the best interests of creditors, the estate, and all governmental agencies seeking information from Debtor, that this case be converted to a Chapter 7, to allow a liquidating trustee to be appointed to collect and/or sell the remaining accounts receivable and tangible assets in Debtor’s possession, and secure the data for all investigating states to review,” the state wrote in its filing.

A copy of that motion can be accessed by clicking here.

At the same time, Optum360, which worked as a middleman between Quest Diagnostics and AMCA has been trying to recover its data from the collection agency and make sure that the data the agency does have will be “maintained securely on an ongoing basis,” Quest said in its filing, which can be accessed by clicking here. The agency has also collected, but not yet remitted, $500,000 of Quest’s receivables, the company alleges.

“Unfortunately, Optum has informed Quest that the response from the Debtor’s current management has been inadequate. Optum reports that the Debtor 1) refuses to permit Optum’s experts to conduct an on-site data security inspection, 2) refuses to transfer a complete copy of the Data in a usable format to Optum and 3) agreed to provide but then failed to complete notice to the U.S. Department of Health and Human Service’s Office for Civil Rights,” the company wrote in its filing.

Retrieval-Masters Credit Bureau filed for bankruptcy protection last month, after notifying its clients that the personal and financial records of their patients had been compromised, after unauthorized access to the agency’s web payments portal was detected. To date, the personal and financial information of more than 22 million individuals has been compromised.

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