American HomePatient tick toc tick toc

It appears there are only 15 days left for the company to cut a deal with the banks for the huge debt they owe.

 

what is the status of this deadline?

 

HomePatient holds off the hangman again
By Geert De Lombaerde

Posted on September 1, 2009 at 6:51 am
Home health care provider American HomePatient (Ticker: AHOM) has extended until Oct. 1 a forbearance agreement with its largest debt holders. The investors will hold off on exercising their option to take control of the company to see if CEO Joe Furlong and his team can come up with a way to repay more than $220 million in debt.

 

Unless they rob a really big bank, they're done...they're extending deadlines because there's nothing to take - what are they going to repossess? You think the bank wants to try and sell a bunch of used DME on the market to satisfy the debts?
This is classic dead man walking

 

Its a shame how they are keeping their people in the dark about this. I'm not sure any of the worker bees really understand what could happen. I'm sure some eleventh hour agreement will be reached, again, and that they will keep the doors open. The only satisfaction to come out of this will be that the "fat cats" will be gone and that some other company or bank will be calling the shots. They need to blow it up, fire the managemnet staff, keep most of the Tech's and get back to their old motto of " Personal, Caring Service ". It used to mean something.......!

 

Most AHOM employees do know what is going on, and do know what could happen. Although I must say it would not surprise me if some didn’t even know about the debt. These are known as “paycheck” workers. No passion in the work they do or the company they work for. The problem the company has is that it’s poorly run. If the right management got a hold of it then it could be just as good if not better than Lincare. The revenue is there and while Medicare cut backs were harsh this (in my opinion) is not the problem. I think a lot of DME companies got far too dependant on the amount they were getting from Medicare for Oxygen rentals. It’s like getting used to a certain life style and then next thing you know your income drops so dramatically you can’t afford that big house and sports car and summer home, you are forced to move into an apartment, trade that jag in for a tarus and your new vacation spot is the pool in your apartment complex. I have been in the DME field for over 7 years, I pay attention, and I read a lot. This company needs a complete overhaul. From start to finish; with processes and staff. The billing software is junked up, there so many “add on” programs. Dooming contracts with Insurance companies. I could go on an on. I will say that if another company did get a hold of AHOM they will be in for one hell of a surprise. But then again after reading other comments about other DME companies, seems to be common issues in all of them.

 

You are correct. I must say that what else is needed is "new" blood in the upper management group. AVP's who have been there for ever need to go. Most of them are not Marketing people, they are or were "bean counters" who have no real idea of today's type of market. Get GM's in there who have been on the streets, grinding to make a living. it would mean so much more to an AE to know that their boss can really understand what its been like to call on those 15-20 accounts daily.

Get rid of all the mundane paperwork and get back to really caring for the patients. Billing Centers, Support Centers, etc,. are all mucking up the works. Too many chiefs and not enough indians!!!

 

Must be blotech you are talking about.

 

No. Can't speak for them. Talking about AHP. While most DME's did, or may, have relied too much on reimbursement dollars from Medicare, AHP kept way too many upper level " fat cats " that sucked up too much money. They have so many VP's of this and that, you never knew who was in charge. Not alot of wealth being shared by this company and it is catching up with them. NexBank will have a field day trying to re-structure this mess. Its hard to imagine a company that will let a CEO keep his job after putting them in debt for the second time in a decade!

 

Absolutely agree. Pricing has now reduced margins such that HME organizations cannot afford a gang of highly compensated executives; especially after 10 years of scraping the company along the bottom and NEVER recovering. If they couldn't drive profits beyond making debt interest payments when the profit margins were higher, how in the world are they going to do it now? The CEO and his enabling Board of Directors have essentially plundered the company for OVER TEN YEARS.

The CEO has made many millions of dollars in compensation. Shareholders, lenders, employees have borne the brunt of the poor leadership.

This is MORALLY WRONG, AT LEAST. SOMEONE take this company over and fumigate the corporate office.

 

what is the most likely outcome of this mess? i know that texas group (highland) has almost 50% of the shares. Nexbank, the lender, is texas based and somehow connected to highland group...so what is really going on in these "talks/forbearance agreements"

 

Highland offered several years ago to buy AHP. AHP, in its small-minded thoughts, put a price on the company that was too expensive. As the debt has mounted, NexBank was " probably" called into action to get what ever they could, back from the company. At almost $250 million dollars, we all know AHP can't repay this. The month to month forebearence is just a " slow death " for a once proud company that knows what the end result is going to be.

One thought on this is that Joe Furlong is owed $3 million in a buy-out clause. This stands in good times or bad. I can't fathom any lender, shareholder or other company wanting to pay this, on top of aquiring all the debt he has driven them in to. The extensions they are getting are probably management related, i.e., what do we give these people to get rid of them, once and for all. The saddest part of this is that they will probably be purchased, allowed to keep their name, keep the GM's ( most of whom are worthless ) and keep working in the local markets.

If Doctors were any better educated on the companies that they deal with, AHP would get no business. They can't manage themselves, how do they expect to manage COPD and OSA?

 

Can someone tell me why the AHOM board thought Joe Furlong was so valuable that he deserved a $3 million buyout clause? What did Furlong do BEFORE AHOM that made him so valuable?

On a related note, I once worked for a now-defunct healthcare firm whose C-levels has badly mismanaged it and led us into debt we couldn't repay. Years later, while the company was limping along, barely alive like AHOM, I ran into one of the culprits at the Atlanta Show. Surprised that the board hadn't fired him, I asked how he still had his job. He told me they would have fired him but couldn't afford his buyout.

 

This is part of the problem. The Board, for the most part, has remained the same. Most have been there way too long and are riding Furlong's coat tails, good or bad. From Brentwood all the way down to the Area VP's, there is a corrupt sense of entitlement that is not willing to let go of the control.

How can some of their people, who are most educated, keep allowing this to happen? The old saying of " money is the root of all evil ", surely rings true with this group. Furlong, Powers, Reichmann and the rest all need to go.

The positive to all of this is that Reps. from other DME's are reaping the rewards of this pitiful company. The referral coordinators are smarter than you think and are keenly aware of the issues with this group.

 

Very True. The truth about the poorly run company (ahp) is spreading like wildfire throughout the marketplace/territories. No exaggeration.

Here is a good article to show doctor's offices: (not good for american homepatient, but good if you compete with them like I do)

You can make copies and put a note on it that says "american homepatient really takes care of the patient" (lol) I found that most doctors, nurses, and referral coordinators value this kind of info.

http://wearecentralpa.com/content/fulltext/news?cid=116192&shr=addthis

 

supposedly everything is fine. i heard that the assets etc. are not worth 230 million or whatever the amount due was. Therefore, the managers believe that the bank truly wants to "work out a deal so they won't lose money if they had to liquidate us." and "as long as we make payments towards the amt. due, then everything will be fine." Besides..."every company has debt." Everyone keeps acting like nothing is wrong. Weird. Either they are way to optimistic or just plain dumb. Maybe i am over reacting, but it seems like a serious situation. So, has anyone been in this boat before. Do you job search or hold out til the end for unemployment or possible merger and restructuring with better company?

 

Mr. Furlong received a $3.3 million lump sum payment on January 4, 2008 to induce him to continue his employment with the Company. This payment was made from the irrevocable trust and reduced the Company’s change of control liability. The payment was in lieu of certain amounts Mr. Furlong would otherwise be entitled to under the amended employment agreement if his employment with the Company had terminated. From:
http://www.sec.gov/Archives/edgar/data/879181/000095012309033041/g20126e10vq.htm

I think I would have gladly let him go.

 

Question: Why do these Boards (AHOM, ROTC, etc) continue to pay huge "retention bonuses" to keep these guys? Retain them for what? Hell, let's throw a performance bonus in as well!! There has to be more to the story. If my performance at my little job looked like these guys, I wouldn't have my little job!! What gives?

 

In regards to everything is fine......, which AVP to do you work for?? They are doing a wonderful job of keeping you in the dark, as usual. Did they tell you this on your Monday morning phone conference after you were humiliated, again ,by having to read your numbers for the previous week. Come on!!!! Not everyone is in debt! Many companies, mostly smaller independents, put money away just for these types of situations ( downward market trends ) and are working just fine.

I'm sure you are an educated person, so think of it this way......, how mad do you get at yourself when you forget to record a check into your checkbook and it doesn't balance correctly? Or, you pull $$ from the ATM and forget to record it.....!

These people have been doing this for 10 years!!!! TWICE, under Joe Furlong's watch, they have gone belly-up!!!

Now, being the educated person that you are, are you still sure everything is going to be fine.......???

 

They received another extension on the balloon payment on the debt; this time until Oct 1st. For the banks to extend this yet another 30 days, means that there is something clearly in the works. They wouldn't extend otherwise, just call it and get it done with. My guess is that there is some kind of deal that reworks the debt, but gets control away from the robber baron CEO. There is NO way the banks would allow this incompetent fool to stick around. He is the only one I know of who got rich on American Homepatient over the last 10 years.