Alabama prison healthcare company says it cannot pay employees for work done before bankruptcy
“Because the company is in Chapter 11, it can only spend cash as authorized by the bankruptcy court under an approved budget."
Mason Reed 
The former healthcare provider for the Alabama Department of Corrections has delivered difficult news to its workforce. In a memo sent on Monday, the Tennessee-based company YesCare announced that it lacks the necessary liquidity to compensate staff for hours worked prior to the company's May 8 bankruptcy filing.
Bankruptcy Constraints
David Goldwasser, the chief restructuring officer for YesCare, explained that the company is currently operating under strict bankruptcy court oversight. Because the company is in Chapter 11, it can only spend cash as authorized by the bankruptcy court under an approved budget. While the firm is actively working to issue payments for work performed after May 8 by collecting on outstanding receivables, pre-petition wages remain tied up in the court process.
Path to Payment
According to the memo, the company plans to pay employees for pre-May 8 hours only if those individuals remained with YesCare following the bankruptcy filing. Staff seeking to recover these unpaid wages will eventually need to file a claim within the bankruptcy case, though a specific deadline and procedural details have not yet been released.
Contractual Turmoil
This latest financial strain follows a rocky conclusion to the firm's tenure in Alabama. In April, the Alabama Department of Corrections terminated a five-year healthcare services contract valued at approximately $1 billion with YesCare, citing a failure to meet contractual obligations. YesCare has faced numerous lawsuits since taking over healthcare services for the department.
Problems were evident earlier this spring when employees reported delayed paychecks in April, a situation that led the Department of Corrections to strike an emergency deal with the Birmingham-based firm NaphCare. Although YesCare employees were eventually paid during that April incident, the current situation marks a second instance of unpaid wages in June, and affected staff are still awaiting their compensation. A request for comment was placed with the Alabama Department of Corrections on Tuesday.
