Daily Business Review
January 04, 2011
Banks have not been the most popular of institutions over the past three years, but Bankruptcy Judge A. Jay Cristol recently had some words of praise for a South Miami bank and the role it played in confirming a Chapter 11 reorganization plan for Premier Diagnostic Imaging Services.
“It’s unfortunate that we don’t have a large press contingent here to celebrate the grand hero in this case … the bank,” Cristol said of the First National Bank of South Miami. “We have a need for local banks to do what this bank has done, resulting in reorganizing a debtor, saving 33 jobs, and helping the economy in every way.”
Luis Vanegas, a senior vice president and commercial lender with the bank, said the diagnostic company, through no fault of its own, had lost 60 percent of its cash flow when Medicare placed the company in pre-payment review.
“Essentially it put all the Medicare receivables on hold for an indeterminate period of time,” said Leyza Blanco, a bankruptcy attorney at GrayRobinson who represented the bank. “When the case was filed they had about $800,000 in Medicare receivables that remained unpaid.”
Although the company’s bank loan is guaranteed by the Small Business Administration, leaving the bank on the hook for only 10 percent, Vanegas said the bank had a lot of faith in the company. “We wanted to help save all those high paying jobs in Hialeah,” he said. “We gave them debtor-in-posession financing. We provided occasional overdrafts and helped in restructuring the company.”
Cristol contrasted the bank’s efforts with that of “large national banks,” whose actions he described as “tragic,” excoriating them for “keeping their hands in their pockets and not lending money and causing 363 sales when there could be reorganizations — and that’s what is wrong with our national banking industry at the present time, it’s too big and too greedy.”