H E A L T H L A W Bankruptcy: When BK Doesn’t Mean You Can Have It Your Way ■ JOHN SHUFELDT, MD, JD, MBA, FACEP M y favorite movie—other than Wedding Crashers, of course—is It’s a Wonderful Life. I watch it every Christ- mas. One of the most memorable scenes is where Un- cle Billy misplaces the envelope containing the deposits. Once George realizes the gravity of the situation, he con- fronts Uncle Billy: “Where’s that money, you stupid old fool? Where’s that money? Do you realize what this means? It means bank- ruptcy and scandal and prison, that’s what it means! One of us is going to jail, and, well, it’s not gonna be me!” Many providers believe the most common reason a healthcare professional is forced into bankruptcy is an ad- verse malpractice event. However, there are many more common reasons which can result in physicians finding themselves before a probate judge. They include, among others: Ⅲ uninsured or underinsured casualty losses Ⅲ ill-advised investments Ⅲ willingness of banks to loan money to providers who may not be good “risks” Ⅲ personal guarantees of business obligations Ⅲ alimony and property payments that could have been minimized with a prenuptial agreement Ⅲ inability or unwillingness to pay back student loans Ⅲ uninsured sexual harassment claims Ⅲ estate taxes caused by inadequate estate planning Ⅲ income tax Ⅲ cash flow issues during practice start-up Ⅲ victimization by fraud John Shufeldt is the founder of the Shufeldt Law Firm, as well as the chief executive officer of NextCare, Inc., and sits on the Editorial Board of JUCM. He may be contacted at JJS@shufeldtlaw.com. 32 Ⅲ liability for breach of fiduciary duty (e.g., ERISA claims, director or officer liability) Ⅲ real estate investments before a market downturn Ⅲ indemnification obligations. Did you read this list of potential causes of bankruptcy and say to yourself, “Those could never happen to me?” Sadly, everyone believes that “it will never happen to me.” I know some very bright business people who have been caught up in one or more of these circumstances and have either lost it all or have came close to losing it all because of some seemingly very innocuous mistakes. My advice is to keep your guard up. These days, it is not difficult to go from financial solvency to insolvency within a few months. With the proliferation of—and subsequent, high-visibility failures of some—urgent care centers and retail clinics, it seems like a good time to discuss bankruptcy. This article and the one in the September issue of JUCM will review the personal and legal implications of filing for bankruptcy. Although statistics on physician bankruptcy proceedings are scarce, suffice it to say that the numbers of JUCM T h e J o u r n a l o f U r g e n t C a r e M e d i c i n e | J u l y/A u g u s t 2 0 0 8 w w w. j u c m . c o m