The sudden shutdown in March of plastic surgery chain Lifestyle Lift has created confusion for patients looking for refunds on scheduled services that never happened. The company’s 400 laid-off employees, meanwhile, have been scrambling to find answers to questions about incomplete final paychecks and how to access retirement benefits.
Now, with Lifestyle Lift under the protection of a Detroit bankruptcy court, clarity over what happens next is slowly coming into focus.
This week, a bankruptcy judge put the company’s wind-down into the hands of a court-appointed chapter 11 trustee, Detroit-based Basil Simon. The judge also appointed a patient care ombudsman, Deborah Fish, to ensure patient files are safeguarded and privacy issues are addressed.
“My phone’s been ringing off the hook from doctors, lawyers, patients, and creditors,” Mr. Simon told Bankruptcy Beat on Thursday. “I’m trying to filter through everything.”
Mr. Simon said that patients looking for information should contact Ms. Fish but that other questions should go to him.
At the time of its bankruptcy filing, Lifestyle Lift said it was working with a new management company on a revival of the company. That’s no longer the case. “There’s not going to be a restructuring,” William Blasses, an attorney for Lifestyle Lift, recently said in court.
Mr. Basil said Thursday that if he can’t find a buyer willing to buy the name and relaunch offices, he’ll sell the company’s remaining equipment and intellectual property piecemeal.
The shuttered chain, which had as many as 54 surgery centers at its peak, owes $17.4 million to J.P. Morgan Chase & Co. and $5.5 million to a former investor, court filings show.
An attorney for J.P. Morgan expressed concern in court that the value of Lifestyle Lift’s assets “is significantly less than that owed to the bank.” Mr. Basil said there likely won’t be much money, if any, left for former employees, customers, vendors, and others further down the pecking order. (Creditors interested in filing a claim can find information here.)
A group of doctors who worked for the chain say in court documents that they’re owed $3 million in unpaid salaries. The doctors are also concerned that customers will come to them looking for an estimated $8 million in deposits that should be refunded by the company.
“They want to move on,” an attorney for Lifestyle Lift physicians said in court. “It’s been impossible for them to do that as they’ve been evicted from places where they practiced medicine.” (Some of the doctors have banded together to provide new contact information to patients.)
The abruptness of Lifestyle Lift’s closure meant many of the surgery centers were left in a state of disarray. Mr. Blasses said there are still files and medical waste in some locations, and the company thinks some equipment was improperly removed. “We’re simply trying to clamp down on what is there and make sure nothing else walks out,” he said.
Founded in Michigan in 2001 by Dr. David Kent, Lifestyle Lift pioneered the mass marketing of plastic surgery through its nationwide chain of surgery centers. Its marketing touted face-lift procedures that, unlike most cosmetic surgery, required only local anesthesia.
A major expansion funded by debt contributed to the company’s money woes, and management failed for years to turn things around, Mr. Blasses said.
“There were a lot of little Band-Aids that were being put on,” Mr. Blasses said, adding that “the model itself could make a significant amount of money, absent the debt service.”
Lifestyle Lift is currently tied up in at least 30 lawsuits, court filings show, some of them brought by former employees and patients. Typically, a bankruptcy filing will temporarily halt active litigation.
The chain came under fire over the years from regulators that questioned the company’s advertising practices, and from consumers who were unhappy with procedures. A representative for Lifestyle Lift has said that the number of complaints against the company from patients was “extremely modest” given the high volume of surgeries.
Write to Sara Randazzo at [email protected]. Follow her on Twitter at @sara_randazzo