Judge Issues Order in Seven Counties Services Bankruptcy Proceedings

United States Bankruptcy Judge Joan A. Lloyd, presiding Judge in the Seven Counties Services Chapter 11 Bankruptcy filing, ruled that Seven Counties Services is eligible to file Chapter 11 bankruptcy. And; in fact, Seven Counties is a non-governmental unit.

Seven Counties Services filed for Chapter 11 protection with the United State Bankruptcy Court, Western District of Kentucky on April 4, 2013. Seven Counties initiated the Chapter 11 proceedings to protect the services and interests of Seven Counties consumers by relieving the nonprofit of the wholly unrealistic financial burden of the Kentucky Employees Retirement System. In just eight years, the contribution rate for Seven Counties to participate in the KERS has increased almost 33%. And while the 2014 General Assembly approved a an allocation of funds for Community Mental Health Centers to subsidize the increase from the current July 2013 rate of 26.79% to the July 2014 rate of 38.6%, Seven Counties simply cannot sustain this financial burden and continue to provide adequate services to our consumers.

Prior to stopping the employer contribution to KERS, Seven Counties contributed over $360,000 bi-weekly. These are dollars that are desperately needed to maintain and expand the services our 31,000 clients need to live to their fullest potentials. “$360,000 could provide a road to recovery for 514 more children and adults living with serious and persistent mental illness. $360,000 would give 100 more individuals with developmental disabilities the supports they need to gain and hold a job for a year; it could get 89 women with a substance abuse problems into evidence-based, proven therapies that would lead to addiction recovery, family reunification and sustained employment,” says Dr. Anthony Zipple, President & CEO of Seven Counties. “Serving our consumers is our most important priorities and we must take this action to protect them,” says Zipple.

Seven Counties did transfer all employees into a more traditional 4013B retirement plan allowing employees to continue planning their financial futures.

This decision by Judge Lloyd allows Seven Counties to remain in bankruptcy court and to pursue a reorganization plan to protect the business operations, including discharging any past or future obligations to the Kentucky Retirement System.