Hidalgo County EMS received a bid Monday from a prospective buyer, a major development in the company’s long-running bankruptcy case.
Chief Restructuring Officer Richard S. Schmidt confirmed that Hidalgo County EMS received a bid, but he couldn’t publicly identify the prospective buyer or provide any details about the offer.
With just a single bid on the table, the bankruptcy court may truncate an auction scheduled for Friday.
“It looks like everything’s going smoothly. It looks like someone’s going to take over and we’re going to have everything bought — in total,” Schmidt said. “It’s from a reputable organization and it looks like we’re moving forward.”
The bankruptcy court, attorneys for the government and Hidalgo County EMS wanted to find a buyer willing to acquire all company assets. Selling ambulances and equipment piecemeal risked disrupting emergency services.
“The judge is really on top of this case,” Schmidt said. “He understands it’s about more than just money.”
Hidalgo County EMS — a privately owned ambulance company that responds to emergency calls in Pharr, Edinburg and rural parts of South Texas — filed for bankruptcy in October 2019.
The company hadn’t filed tax returns in 2017, 2018 or 2019. It owed $2.6 million to the IRS. And cash flow problems made payroll a major challenge.
Problems with the government didn’t stop when Hidalgo County EMS filed for bankruptcy.
The U.S. Attorney’s Office for the Southern District of Texas accused Hidalgo County EMS of fraudulently obtaining a Paycheck Protection Program loan. The Office of the United States Trustee, which monitors bankruptcy cases, warned that Hidalgo County EMS was hemorrhaging cash and had failed to pay bankruptcy fees.
CEO Kenneth B. Ponce, meanwhile, pleaded guilty to bankruptcy fraud on March 17.
Ponce confessed to concealing assets from the bankruptcy court, falsifying documents and participating in schemes to siphon assets from the struggling company.
Hidalgo County EMS fired Ponce after he pleaded guilty. Ponce, though, still owns the company.
Schmidt and the Hidalgo County EMS management team spent the past month searching for a buyer. They also worked closely with the state to prepare a backup plan, which would prevent any disruption in ambulance service.
Monday was the deadline to submit bids. An auction is tentatively scheduled for Friday.
With a single bid in-hand, however, Schmidt said they may file a motion asking U.S. Bankruptcy Judge David R. Jones to simply approve the sale.