Gordian Medical Confirms Chapter 11 Plan

May 2015

On May 6, 2015, the United States Bankruptcy Court in Santa Ana, California, confirmed the chapter 11 plan of reorganization for Gordian Medical, dba American Medical Technologies. This was a true reorganization funded by a new-value contribution by the principal of the company. The case was filed in January 2012 because the Medicare program had placed Gordian on recoupment of all payments. As part of the plan confirmation process, the bankruptcy court approved a settlement between Gordian and Medicare that resolved Medicare’s prepetition claim and two years of postpetition claims. Under the settlement, (a) Gordian was required to pay CMS a significant amount at confirmation, (b) CMS can recoup funds owed to Gordian by CMS but that CMS had previously frozen, and (c) CMS can reduce amounts paid to Gordian monthly for a significant period of time. 

Additionally, the case resolved significant tax claims asserted by the IRS and the California Franchise Tax Board. Jeff Kandel, Malhar Pagay, Teddy Kapur, Felice Harrison, Beth Dassa and Myra Kulick all contributed to this very good result. 

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