May 24–31, 2001

pretzel logic

Messing With Texas

by Howard Altman

Looking back, Allan Jackson says the lack of a lunch offer should have set off alarm bells about the people to whom he was about to sell his company.

Jackson, who lives in Colleyville, TX, says things pretty much went south when he got back down South and sold Trinity Home Medical Equipment to Beckett HealthCare, a Philadelphia-based company that was, at the time, a powerhouse in the home medical supply business.

Beckett has since gone belly-up and is now in the middle of legal disputes over how to divvy up its assets and pay off creditors. And Allan Jackson is caught in an endgame he just can’t seem to escape.

"The only time I have ever been to Philadelphia was when I flew up there to see Beckett’s operation," says Jackson, who is fighting to get back what he says is money and equipment owed to him by Beckett. "They didn’t even feed me lunch. They just put me on a plane back to Texas. That should have been an indication that there would be trouble."

Jackson’s trouble actually started before he’d ever heard of Beckett or even contemplated a trip to Philadelphia.

Trinity Home Medical Equipment, which supplied wheelchairs, respirators and the like to sick folk, was among many companies nationwide hit hard in 1997 by changes in how Medicare reimbursed durable medical equipment providers.

"They gave us a 35 percent decrease in payments," laments Jackson. Those losses, says Jackson, were made even more painful when the large nationwide HMOs stepped in to cherry-pick clients from smaller companies like his.

By 1998, Jackson says he saw the proverbial writing on the wall and began looking for a buyer.

Jackson wound up selling Trinity — which had more than a half million dollars in billing even after the devastating cuts in Medicare payments — to Beckett for $300,000 plus an 18-month, $35,000 consulting contract.

At first, the Colleyville-Philadelphia union was a happy corporate marriage, with the new Beckett-owned company taking in more than $1 million in business in the first 13 months.

But getting business proved to be the easy part.

Getting paid for it became a nightmare, says Jackson, adding that poor record-keeping on Beckett’s part cost the company hundreds of thousands of dollars.

And it wasn’t just the company not getting paid, says Jackson.

"They weren’t paying me," he says, adding that phone calls and e-mails to Philadelphia were going unreturned.

Finally, Jackson says he did get a response from Beckett. In March 2000, when Beckett officials told him that they no longer wanted to be in Texas and did he want to buy his company back?

By this time, Jackson says Beckett owed him about $158,000. Buying back his company from a company that owed him so much seemed a little strange, so Jackson says he was hesitant to do anything without consulting with his lawyer and CPA.

A few days later, Beckett officials flew down to Texas and, not only did they not offer Jackson any lunch, they in effect decided to have him for lunch, telling him they were shutting down the company.

But for Jackson, the worst was yet to come.

Beckett, says Jackson, "decided to pick up all the equipment and have us ship it back to them in Philadelphia. We had to find companies to replace our equipment and start taking care of the patients."

Jackson says he filled two semis which, once loaded, lumbered the 1,489.9 miles to Philadelphia, where the stuff, he would later learn, sat in a warehouse, unused.

The medical equipment may be gathering dust, but it will come in handy. In December 2000, Beckett, which had once amassed more than $35 million annually in sales, filed for Chapter 11 protection from its creditors.

A list that includes Allan Jackson of Colleyville, TX, who wants his medical equipment back so he can get on with his life, which now consists of paying his mortgage with credit cards because his new venture, ironically enough selling insurance to the self-employed, failed to take off.

Unfortunately for Jackson, he is an unsecured creditor. Meaning he, like hundreds of other people owed money by Beckett, have to take a seat at the end of the line, behind secured creditors like First Union.

Jackson says that is outrageously unfair.

Beckett officials are refusing to comment, other than to say that a judge failed to find in Jackson’s favor when he sued the company.

Charles Golden, an attorney with Philadelphia firm Obermayer Rebmann Maxwell & Hippel who is representing the entire group of unsecured creditors, says, in essence, that Jackson is scat out of luck.

"Mr. Jackson’s problem, in my opinion, was that he failed to protect himself," Golden says. Golden says he does not know how much any settlement might mean to people like Jackson.

For his part, Jackson is resigned to being on the receiving end of the big shaft. Though he recently wrote a passionate plea for justice to U.S. Bankruptcy Court Judge Diane Sigmund, who is presiding over the Beckett case, Jackson is taking courses so he can return to his original field — respiratory therapy.

Allan Jackson learned a hard lesson in Philadelphia. If you want to do business here, at least make them buy you lunch.