Meridian health files Chapter 7 bankruptcy: liabilities exceed $3m.

Less than a year after it was acquired, once high-flying administrative outsourcing company Meridian Health Care Management Inc. has gone belly up.

The Chap. 7 filing will allow the company to liquidate its assets to pay past debts. Court documents show that Meridian's assets are worth $1.5 million and listed $3.2 million liabilities to 81 creditors, 62 of which are former employees, including former president Michael Alper.

Telephone calls and e-mails to the company's offices last week went unanswered and the Meridian website was offline.

Founded in 1982, the privately-held company provided third-party administrative assistance and technology to hospitals, employee benefit providers, healthcare providers and Independent Practice Associations. It helped with data gathering, claims processing, negotiating rates, eligibility verification and other business processes. As of 2003, it had 500,000 members, covered six states and worked with 13 healthcare providers.

Santa Mafia-based administrative services company e4e acquired Meridian in August 2005 and made it the centerpiece of the company's healthcare division. Founded in 2000, e4e had been providing a variety of administrative services mostly in the financial and technology sectors.

The bankruptcy consent form was signed by e4e CEO and President Somshankar Das and Chief Operating Office Murrali Rangarajan. Calls and e-mails to Das and Rangarajan seeking comment were not returned.

Chap. 7 bankruptcy is generally used by companies that are in debt and cannot repay creditors. Under the terms of the bankruptcy, the company ceases operations, sells all of its assets and uses the proceeds to pay back creditors and investors.

In 2005, more than 1.3 million Chap. 7 bankruptcy proceedings were filed, according to U.S. Bankruptcy Courts.

Until recently, Meridian appeared poised for expansion. In 2001, the 240-employee company signed a $17-million, eight-year lease for 80,000 square feet of office space at 6200 Canoga Ave. in Warner Center.

A company news release from 2002 said that Meridian had grown 20 percent from 1997, increasing from eight clients and 45,000 members to 20 clients with 500,000 members.

In recent months, however, the tide apparently shifted.

In April, Northridge Medical Group, an Independent Practice Association healthcare services group with more than 100 doctors, switched from Meridian to another provider.

The company has also moved out of its offices at 6200 Canoga Ave., where it was the structure's largest tenant and had naming rights. (The property, in turn, is being sold by owner the Morgan Group. Steve Algermissen, a broker with Cushman & Wakefield, confirmed that he and Cushman's David Hasbrouck are marketing the complex.)

Meridian owes $91,736 to creditors, the most--more than $52,800--to vendor Key Information Systems, a Woodland Hills-based technology and software firm.

But Pete Elliot, marketing director for Key Information, said Chap. 7 bankruptcy is not unusual among these types of companies. "We deal with businesses on a day-to-day basis that have these issues," he said. "We'll sit tight and see what happens."

CHRIS COATES Staff Reporter