WESTMONT, Ill. - Equiguard Inc. has sought bankruptcy protection in filing for Chapter 11 reorganization. The announcement came from Peter Dikeos, vice president of operations at Equiguard, in late August. The company has assured its customers that the extended service agreements currently in the market are insured by Assurant Solutions Inc.
“We expect that all eligible claims will be paid by Assurant Solutions,” said Dikeos in a letter announcing the company’s decision. “The Chapter 11 filing is a result of an impasse between Equiguard and Assurant pursuant to the terms and conditions of various agreements between the two companies.”
Equiguard is currently reorganizing and plans to continue to be in the business of selling fully insured extended service agreements.
“We understand that this situation has caused some of our customers and business associates concerns and challenges,” said Dikeos. “We are hopeful that you will allow us the time and opportunity to restructure and emerge from bankruptcy as a stronger company. We are evaluating our restructuring options and will keep you apprised of our progress.”
As the Chapter 11 legal wheels began to turn, some claim checks were returned marked as nonsufficient funds (NSF). According to the company, the checks should have been marked account frozen and not as NSF.
“Equiguard had sufficient funds in its accounts to cover all checks written,” explained Dikeos. “However, the rules under Chapter 11 filing prevent Equiguard from paying any of its pre-bankruptcy obligations without Bankruptcy Court approval.”
With counsel, the company is reissuing the checks, issuing Visa debit cards in the sum amount of $15 for each returned check, and has provided new instructions for future claims.
“We want to reemphasize that all extended service agreements in effect at the time of the filing are fully insured and remain insured through their expiration date,” said Bill Kuchan, claims supervisor at Equiguard, in a letter to Equiguard service contractors. “As a result of the filing and at the direction of our insurance carrier, we have been instructed to return all unpaid claims to the service contractor for resubmission to Assurant Solutions Inc. for their approval and payment.”
The company instructed service contractors to contact Assurant Solutions by phone, e-mail, or fax for procedures on submitting all returned claims and all future claims which arise from extended service agreements sold prior to Oct. 1, 2004.
For more information, visit www.equiguard.com or contact Kuchan at 800-886-9363.