A Poughkeepsie physical therapy business has filed for bankruptcy protection, blaming financial difficulties on landlord-tenant issues and the Covid-19 pandemic.
New York Hand & Physical Therapy PLLC declared $30,000 in assets and $212,236 in liabilities, in a Chapter 11 petition filed last month in U.S. Bankruptcy Court, Poughkeepsie.
Patrick Clough, the president, did not explain how the landlord-tenant dispute or the pandemic impacted his business. Instead, he says in an affidavit that Mahopac Bank froze bank accounts, “which has caused the business to suffer from temporary but significant delays in its income and ability to pay its creditors.”
The bank is listed as New York Hand’s largest secured creditor, at $132,596. Poughkeepsie K Holdings, a Mount Vernon company that sued and won a default judgment after the business defaulted on a previous lease, is owed $77,780, according to the affidavit.
Mahopac, now part of Tompkins Community Bank, objected on Jan. 10 to New York Hand’s motion to continue using the bank accounts to operate the business.
Tompkins argues that the bank account funds are collateral for a $200,000 loan issued in 2015. The bank sued New York Hand in 2020 to recover the collateral, and last January won a $132,596 judgment that has since increased, with interest, to $143,777.
The bank claims that the bankruptcy code does not allow a debtor to use cash collateral, or requires the court to put conditions on the accounts to protect the bank.
Clough says in his affidavit that it is in the best interests of the business and its creditors to continue operating while a reorganization plan is negotiated.
New York Hand posted profits of $15,769 in 2020 and $44,078, according to tax records filed with the bankruptcy case.
Clough, of Gardiner, Ultster County, twice filed for personal Chapter 13 bankruptcy in 2019, with New York Hand as a co-debtor. The court dismissed both cases, first for failure to make payments to the trustee, and then for failure to provide tax returns or propose a feasible Chapter 13 plan.
New York Hand is represented by Hopewell Junction attorney Devon Salts.