Neuragenex’s Chapter 11 case should be converted, U.S. trustee says

By Sarah Lizee

Olympia, Wash., April 8 – Neuragenex Treatment Centers, LLC is facing a motion for conversion of its Chapter 11 case to Chapter 7 from U.S. trustee Ilene J. Lashinsky, according to documents filed Friday with the U.S. Bankruptcy Court for the District of Arizona.

Lashinsky said that from the outset of the case it appeared there may have been mismanagement issues that brought about the bankruptcy.

The U.S. trustee said the disorder in the debtor’s business has not been fixed and those issues continue to arise, demonstrating that current management is not equipped to navigate the case to a successful conclusion.

“Creditors, particularly unsecured creditors including priority wage claimants who have not been paid prepetition wages, are at great risk of receiving no distribution whatsoever while the landlords with whom the debtor entered into questionable agreements walk away with the entirety of debtor’s assets,” Lashinsky said in the motion.

The U.S. trustee said the case should be converted to ensure that a proper accounting and thorough review and resolution of all issues and claims occurs in an efficient manner.

The Mesa, Ariz.-based company owns and operates medical pain treatment centers in several states. The company filed bankruptcy on Jan. 26 under Chapter 11 case number 24-00631.

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