Impairment Resources LLC, a California-based, national medical records company, has filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Wilmington, Delaware. The bankruptcy came on the heels of a break-in at its San Diego headquarters that precipitated an electronic breach of detailed medical information for approximately 14,000 people.
Company executives were required by law to report the breach to state attorneys general as well as the Department of Labor’s Office of Inspector General. To-date, the investigation is ongoing and no one has been arrested for the crime.
According to an article by Katy Stech on www.wsj.com (The Wall Street Journal), a company spokesman explained the reason for the bankruptcy filing, stating, “The cost of dealing with the breach was prohibitive”. Impairment Resources listed its assets at approximately $226,000, an amount that, even after money comes in from liquidating sales, “likely won’t be enough to pay lender Insurance Recovery Group and its $583,000 loan.”
The company also faced the threat of even more debt with customers and individuals threatening to sue over the privacy breach.
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