Bankrupt Retrieval-Masters Credit Bureau, which operated under the name of American Medical Collection Agency and was the victim of a massive data breach last year, has asked a judge to dismiss its bankruptcy because it does not have enough money to continue paying what it owes.
A copy of the motion to dismiss can be accessed by clicking here.
The saga began about a year ago, when the agency noticed that an unauthorized user had gained access to its online payment portal. The user had been accessing the agency’s network for more than six months when the breach was discovered. Ultimately, the personal information of more than 25 million individuals was compromised as a result of the intrusion.
The agency filed for bankruptcy protection last June, seeking to liquidate its assets to repay all of its creditors. But now, the company is “administratively insolvent,” it said in the filing. The only thing keeping the company going is the “willingness” of its owner, Russell Fuchs, “to compromise a portion of his claims against the Debtor’s estate and provide further funding necessary to satisfy administrative expense claims.” Fuchs, according to the filing, is still owed as much as $3 million, most of which came in the form of a loan to cover the cost of printing and mailing notifications that were sent to victims of the breach.
To unwind itself and progress through the bankruptcy process, the bankrupt company has been accumulating expenses, mainly in the form of attorney’s fees. Lawyers have not been paid since last October and the balance on what is owed them is $500,000, along with hundreds of thousands of dollars in other costs. The estate currently has about $720,00 in liquid assets, according to the filing.