An Emporia bank has filed suit against AirMD, the operating partner for Midwest LifeTeam, an air ambulance company that operates a service in Emporia under a contract with Newman Regional Health.
The suit, filed by ESB Financial, formerly Emporia State Bank and Trust, alleges a default on an accounts receivable funding program.
Ken Buchele, ESB senior vice president, said that he could not comment on the suit.
“It’s a simple thing; it’s just a contract dispute,” said Melissa Knott, chief operating officer for Midwest LifeTeam. “Sometimes it comes to this part before it gets resolved.”
Knott said Wednesday afternoon that her company and the bank had been working on the dispute for about six months before the lawsuit was filed.
“We will respond to it next week, and feel very comfortable that everything will be resolved very soon, favorable for both parties,” she said.
The Wichita Eagle reported Wednesday that the lawsuit, filed in September in Sedgwick County District Court, concerned an agreement that required AirMD “to deposit accounts receivable in a designated ‘lock box’ at the bank ... (and) to maintain a reserve account established and controlled by the bank.
The Eagle reported that ESB alleges that AirMD collected accounts receivable but failed to deliver them to the bank, and also failed to maintain the reserve account at the level required by the bank.
The suit alleges that the ambulance service is in default on the accounts receivable in the amount of $375,421. ESB also is asking for $75,000 in additional damages, plus interest, costs and expenses, including attorney fees.
Knott said that the lawsuit will not affect Midwest LifeTeam’s air ambulance service in Emporia.
“We plan to be there for a very, very long time,” Knott said.