American Medi-Dent Inc. Seeks Bankruptcy Status
Citing rising costs and declining profits, American Medi-Dent Inc., the Anaheim-based dental care provider, and its two wholly owned subsidiaries have filed for reorganization in U.S. Bankruptcy Court.
The former medical-equipment manufacturer manages 13 dental clinics in Orange, Los Angeles and Riverside counties and sells pre-paid dental plans.
The firm, which went public in 1982, is a holding company for the office-management subsidiary American Dental Centers and Associated Dentists Inc., the prepaid dental care service.
“The bankruptcy won’t affect operations,” said Jeffrey P. Berg, of Los Angeles, attorney for the companies. “The dental practices remain unchanged.”
In last Friday’s petition, filed under Chapter 11 of the federal Bankruptcy Code, Medi-Dent and its subsidiaries claimed assets of $10.3 million and liabilities of $9.3 million.
Since 1982, American Medi-Dent has had quarterly losses that it blamed on the costs of opening new clinics, acquisitions and continued losses from discontinued operations. The company lost $1.7 million in the first nine months of its fiscal 1984, ended March 31, 1984, the latest period for which figures are available.
In the quarter ending last March 31, it disposed of money-losing dental laboratory divisions and a money-losing dental instruments manufacturing division. It also closed its equipment and supply company to concentrate on the dental clinics, and on sales of prepaid dental plans.
Berg said one of the more recent problems is that American Medi-Dent’s malpractice insurance carrier went bankrupt, and the centers, although they do not practice dentistry, have been named in about a dozen million-dollar lawsuits.
Facilities Subletted
The management subsidiary owns or leases buildings and equipment and sublets the facilities to dentists, whose practices it manages.
The prepaid dental plan subsidiary is one of 33 such companies statewide. It is regulated by the state Department of Corporations, Berg said.
The largest of the 706 shareholders is Garden Grove dentist Howard Morgan, who is president of all three companies and owns about 25% of the 3.5 million shares in Medi-Dent, according to the bankruptcy petition and Berg.
